Excessive emissions of plug-in fuel tanks violate the purchase tax reduction policy, or face supplementary taxes and right-of-way redetermination

Since the fermentation of the suspected pollutant emission exceeding the standard of plug-in hybrid fuel tanks equipped with atmospheric pressure fuel tanks on May 25, public opinion has continued to pay attention to the trend of the incident. At present, no institution has expressed its attitude on this incident. On May 29, Dong Yang, chairman of the Power Semiconductor Branch of the China Automotive Chip Industry Innovation Strategic Alliance, wrote an article revealing that the government department has intervened in the investigation on the compliance of fuel tanks, and I believe that things will be clarified soon.

Within a week of the incident, public opinion raised many new questions: Is the high-pressure fuel tank the determining factor in judging the excessive emission of oil and gas pollutants in the blending product? Why do people cling to the problem of plugging in atmospheric pressure fuel tanks, but ignore fuel vehicles that also use atmospheric fuel tanks? Once the test results of excessive evaporated emissions are true, in addition to the three fields of ecological environment, automobile product quality and automobile production, what other issues are involved in the main enterprise responsible for the incident? If there is no formal outcome on this matter, what will be the impact on the next step in the implementation of Continental's vehicle emission standards?

As of June 1, a number of vehicle and parts companies have stated that plug-in blending does not use high-pressure fuel tanks, and it is impossible for oil and gas evaporation pollutant emissions to meet the standard. In addition, in addition to the three emissions incidents mentioned earlier, the Ministry of Ecology and Environment, the General Administration of Quality Supervision, Inspection and Quarantine and the Ministry of Industry and Information Technology, relevant people raised new questions on the issue of vehicle purchase tax exemption and right of way enjoyed by hybrid vehicles, and if the result is determined that the emission exceeds the standard, whether the responsible entity needs to return the purchase tax reduction amount and re-delineate the right of way of the next model. New information and analysis will bring the incident of excessive emissions of plug-in fuel tanks into a new direction.

A number of automobile companies have stated that it is impossible to meet the emission standard without high-pressure fuel tanks

With the fermentation of the atmospheric pressure fuel tank incident, many automobile companies such as Lantu, Zerorun, and Li have successively expressed their position that plug-in hybrid products must use high-pressure fuel tanks.

On May 31, Yi Xinyu, president of Geely Brand Research Institute, clearly stated that if it wants to meet the regulatory requirements, the pressure resistance value of the high-pressure fuel tank of the plug-in hybrid model must be above 30kpa, and the general atmospheric pressure fuel tank cannot meet this standard. In layman's terms, the high-pressure fuel tank is like a pressure cooker holding the steam, while the atmospheric pressure oil tank is a hot water kettle, and the steam will open the lid. Therefore, it is impossible for plug-in hybrid models to use atmospheric pressure fuel tanks to meet environmental protection requirements, and no matter how it is explained, it is logically unworkable.

It is reported that less than a month after the debut of the Geely Galaxy series, Geely's related high-pressure fuel tank matching has entered the production state. On March 6, Geely Automobile Group's parts production company announced that the new energy high-pressure fuel tank project was officially put into operation in Taizhou Bay New Area. The plant plans to produce 600,000 high-pressure fuel tanks per year, and according to the production capacity plan, the plant can cover 50% of Geely Automobile's current annual sales in the future.

On the question of whether plug-in hybrid models must use high-voltage fuel tanks, Yap Shares, the largest fuel tank supplier in mainland China, said in a summary of investor relations activities in April 2023 that plug-in hybrid models and extended-range electric vehicles must use high-voltage systems. The data shows that Yap shares supply more than 50% of the high-pressure fuel tanks on the market.

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Or face tax catch-up and right-of-way reassessment

Regarding the responsibility of the plug-in hybrid model equipped with atmospheric fuel tanks, relevant laws and circulation sources believe that in addition to the intervention of the three competent departments of the Ministry of Ecology and Environment, the General Administration of Quality Supervision, Inspection and Quarantine and the Ministry of Industry and Information Technology, it may also be suspected of violating the mainland tax collection and management law.

According to the regulations, plug-in (including range extender) hybrid vehicles listed in the "Catalogue of New Energy Vehicle Models Exempt from Vehicle Purchase Tax" issued by the Ministry of Industry and Information Technology and the State Administration of Taxation can enjoy exemption from vehicle purchase tax. Based on the 10% new vehicle purchase tax rate for passenger cars under 1.6 liters, plug-in hybrid products equipped with atmospheric fuel tanks are not subject to this tax. If the final inspection results prove that the emissions exceed the standard, it means that the company's products do not bear the corresponding responsibility for the new energy vehicle tax reduction requirements, and violate the relevant reduction policies.

Article 18 of the Vehicle Purchase Tax Law of the People's Republic of China stipulates that taxpayers, tax authorities and their staff who violate the provisions of this Law shall be investigated for legal responsibility in accordance with the Law of the People's Republic of China on the Administration of Tax Collection and other relevant laws and regulations. Article 61 of the Law of the People's Republic of China on the Administration of Tax Collection stipulates that if anyone fails to set up and keep tax withholding and payment account books or keep tax withholding and collection and payment accounting vouchers and relevant materials in accordance with the provisions, the tax authority shall order corrections within a time limit and may impose a fine of not more than 2,000 yuan; where the circumstances are serious, a fine of between 2,000 and 5,000 yuan is given.

Based on one of the models equipped with atmospheric pressure fuel tanks, the total sales volume of this product in 2022 will be about 300,000 units, which means that a single vehicle is exempt from purchase tax of 10,000 yuan based on the theoretical value of 100,000 yuan per vehicle. Legal sources believe that once the relevant departments disclose that the final test results are not up to standard, it means that the billions of yuan of taxes and fees reduced by the product in 2022 do not meet the regulations, and whether the national tax department initiates the corresponding tax supplementary payment collection also needs to give the outside world an answer.

In addition to tax issues, plug-in hybrids, as new energy vehicle products, enjoy the dividends of right of way and license plates in China's major cities with restrictions on driving and purchases. If the test results ultimately do not meet the emission standards, whether the traffic management department will re-delineate the right of way and license plate of its past products is also a new issue that needs to be discussed.

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If this matter is not investigated, China VIB may become a dead letter

Is it a big deal to exceed the emission of pollutants from the fuel tank? Do you want to be so careful, grabbing the tank and not putting it away? What if the big thing turns into a small thing? For these three issues, you may wish to open the China VIB emission bill to take a look. The China VIB emission standard is 40% to 50% stricter than the limit of China V standard; Increased actual road driving emission control requirements; The evaporative emission control requirements are more stringent, the emission limit value is reduced by 65%, and the on-board refueling oil and gas recovery system (ORVR) needs to be installed to control the oil and gas emissions during the refueling process; At the same time, the requirements for emission warranty periods have been added, the carbon monoxide (CO) and hydrocarbon (HC) limits for low-temperature emission tests have been tightened by one-third, and strict on-board diagnostic system (OBD) control requirements have been introduced.

In the standard requirements, evaporate emission control is the most detailed content described in China VIB text, why is this standard described in such detail? The reason is that plug-in hybrids may soon completely replace purely internal combustion engine vehicles.

With the implementation of China VIB and the development stage of China VII, Zhu Xisan, a professor at the School of Automotive Engineering of Tongji University, predicted that once China VII landed, China would not have a pure internal combustion engine product to meet the standard. This means that cars will enter the new energy era, and hybrid and plug-in hybrid are the main choices to replace pure internal combustion engine vehicles.

If there is no result in this incident of plug-in and mixed use of atmospheric pressure fuel tanks, it means that the so-called most stringent China VIB vehicle emission regulations in history cannot make decisions on only one detail of evaporated emissions, let alone the regulatory implementation of other standards. Whether it will eventually become a dead letter depends on the final test results of the relevant departments of the atmospheric pressure fuel tank.

Fu Yuwu, honorary chairman of the Society of Automotive Engineers of China, said in an interview with Auto 13 that the current development of the mainland automobile industry has entered the stage of legalization, and car companies must strictly abide by relevant laws and standards. In addition, the mainland automotive industry has been upgraded from the rapid growth of the past to the new normal of high-quality green development, whether from the perspective of user needs or environmental friendliness, automotive enterprises must pay attention to environmental protection and fulfill social responsibilities, only in this way can they achieve healthier and more sustainable development.

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