Export Tax Rebate Rate Cut to 9%: Which Auto Manufacturer Can Still Earn Steadily in Overseas Markets?

China's car exports have ranked first globally for three consecutive years, with the full-year 2026 export volume expected to approach the 10 million unit milestone. Data shows that in the first three quarters of this year, China's car exports reached 8.205 million units, a year-on-year increase of 65.8%. In September alone, car exports exceeded 1.05 million units. Looking at this number alone, it is easy to assume that Chinese car globalization is surging forward.

Rapid growth in the scale of China's car exports does not equate to a synchronous increase in global competitiveness. Many sales increases stem from short-term expansion fueled by policy dividends. This model of low profits or even selling at a loss to gain market share has extremely fragile risk resistance. As long as there is significant fluctuation in the external environment, the inflated growth bubbles accumulated in the industry will be quickly cleared.

In fact, sales growth and profit growth are never the same thing. Latest data shows that the total profit of China's automotive manufacturing industry in the first three quarters fell by 22.8% year-on-year, and the profit margin on operating income was only 3.33%, far below the average level of industrial enterprises above designated size nationwide. Even many auto manufacturers are trapped in a vicious circle where "the more they sell overseas, the thinner the profits become".

Recently, the Ministry of Finance and the State Taxation Administration announced: Starting from April 1, 2027, the export tax rebate rate for Value-Added Tax on new energy vehicles will be reduced from 13% to 9%. This policy adjustment has thrown a "stone" into the already "involutionized" new energy vehicle industry. This not only concerns enterprise profits but may also reconstruct the game rules for Chinese new energy vehicles going "overseas".

As one of the "New Three Items" of exports, on the surface, after this adjustment, it is equivalent to an increase in export costs for auto manufacturers of about 4%, which will directly compress enterprise profit margins. But Gu Lu Ge believes that appropriately reducing the export tax rebate for new energy vehicle products will help Chinese cars break away from dependence on a single cost advantage, thereby establishing a brand image in the global market.

1

The export model relying on subsidies is over

In the past, the 13% export rebate rate helped Chinese new energy vehicles rapidly open up the market during the industry's start-up phase, but it also brought side effects during the industry's mature phase, such as increasingly obvious problems like involutionary competition and international trade friction. Long-term, this not only increased the burden on finances, but also was detrimental to the international market's influence status. Therefore, issuing a new export tax rebate policy at this time basically conforms to market expectations.

This adjustment is not an isolated action. Tracing the policy context, among the foreign trade "New Three Items", photovoltaics and batteries have successively experienced rebate rate reductions or even cancellations. The "tax rebate stronghold" that was the last one retained for new energy vehicles has officially entered a de-escalation channel. This announcement adjustment has a very wide coverage, covering 67 categories of products, including all categories such as pure electric, plug-in hybrid (including extended range), sedans, SUVs, commercial vehicles, etc.

As long as the rebate amount is reduced, the decline in profit is inevitable. Calculated based on a new energy vehicle with a customs declared price of 15,000 US dollars (about 107,000 yuan), 4% corresponds to about 600 US dollars, converting to 4,300 yuan. Without exaggeration, 4,300 yuan is roughly more than half of the gross profit of a 100,000 yuan class pure electric vehicle. Even for some models, the rebate reduction is not just "earning a little less", but exporting means losing money.

This policy adjustment adopted a parallel method of gradual de-escalation and buffer period to avoid a one-time significant increase in tax burden. Over the next few months, it is almost certain to trigger a wave of export grabbing, and the export data for the first quarter of 2027 may show inflated figures. However, after April 1 next year, the volume of car exports may face a short-term decline — this is a situation that may occur during the release of many policies, which can be viewed normally.

2

Rebate adjustment is about who can make overseas business last longer

The impact of the new policy landing always brings joy to some and sorrow to others. For example, auto manufacturers focusing on low prices and volume, relying on whole vehicle exports, face a sharp increase in pressure; top auto manufacturers with stronger brand awareness, product differentiation capabilities, and overseas channel systems have stronger risk resistance.

Especially for car manufacturers with localization layouts, they are likely to gain a larger market space. Moreover, the de-escalation will accelerate the switch from "whole vehicle export" to "local assembly". Previously, domestic car manufacturers setting up factories overseas were mostly based on trade policy considerations. However, overseas production costs are generally higher than domestic ones. With the weakening of cost advantages in directly exporting products from domestic, the competitiveness of car manufacturers with overseas capacity layouts may increase.

In fact, top car manufacturers have long been layoutting overseas local production. BYD is building its own factory in Hungary; Chery has three overseas production bases in Malaysia, Spain, and Thailand; Geely acquired 34% equity of Ford's Spanish subsidiary, and both parties will carry out joint operations relying on Ford's whole vehicle factory located in Valencia, Spain. It is reported that BYD, Geely and other auto manufacturers' proportion of overseas local production in 2027 will increase to more than 30%, and this part of the business is completely unaffected by export tax rebate policies.

From a broader perspective, the rebate reduction is less of a blow to auto manufacturers and more of a targeted optimization after the industry development reaches a specific mature stage — ending the old model of low-volume sales relying on tax rebate price differences, forcing competition back to the tracks of product power and system power. The underlying logic of going overseas is switching, but the dividends have not disappeared, and the long-term trend of export growth is still expected to continue.

However, from a national perspective, going overseas is no longer a scale game of "sell as much as you can", but to start paying "quality tax". Subsidies can buy market share, but cannot buy brand premium. This adjustment helps force car manufacturers to abandon low-price "involution", increase product value-added, accelerate overseas localization layouts, and promote the shift of car exports from scale expansion to high-quality globalization.

When the new energy vehicle industry development enters a new stage, the existing tax rebate policies and new development needs are no longer adaptive, thus triggering a series of new problems. Against this background, orderly promoting tax rebate "weaning off" is essentially guiding the entire industry to jump out of low-level competition and return to the rational track of high-quality development.