Core Viewpoint - The recent adjustment of the consumption tax on ultra-luxury cars by the Ministry of Finance and the State Taxation Administration has raised significant industry attention, with changes effective from July 20, 2025. The new regulations lower the tax threshold and include new energy vehicles, impacting pricing and market dynamics [3][5][9]. Group 1: Tax Adjustments - The consumption tax threshold has been significantly lowered from 1.3 million to 900,000 (excluding VAT), expanding the range of vehicles subject to taxation [3][4]. - New energy vehicles, previously exempt due to their environmental benefits, will now be taxed if priced above 900,000 (excluding VAT), reflecting a principle of tax equity between fuel and electric vehicles [3][4]. - The taxation process for new energy vehicles will only apply at the retail stage, with a 10% consumption tax, while traditional fuel vehicles will continue to be taxed at both production/import and retail stages [3][4]. Group 2: Market Impact - The new policy is expected to increase costs for consumers purchasing vehicles priced between 900,000 and 1.3 million, potentially leading to price adjustments by luxury brands [4][9]. - The second-hand ultra-luxury car market will benefit from tax exemptions on transactions, likely enhancing liquidity and improving the resale value of these vehicles [4][9]. - The expanded tax base aims to prevent tax evasion by including all related costs in the retail sales figure, ensuring a more comprehensive taxation approach [4][6]. Group 3: Industry Reactions - Industry experts have mixed views on the impact of the new tax policy, with some suggesting it may further compress the sales space for luxury vehicles, while others believe it reflects reasonable adjustments to market conditions [5][9]. - Data indicates a decline in the import of ultra-luxury vehicles, with a 10% drop in 2023 and a projected 12% decrease in 2024, highlighting ongoing challenges in the luxury car market [6][8]. - The luxury car market is expected to see price increases as manufacturers adjust to the new tax structure, with some predicting a rise in the prices of both new and second-hand luxury vehicles [9][10].