CHINA has decided to guillotine sales tax on electric and fuel cell cars made by domestic firms like SAIC motors and BYD. With the green automobile market growing fragile, the Finance Ministry of China has pitched in to save the industry by exempting 49 domestically made electric cars from sales tax. The exempted models include the Sale electric automobile grown by SAIC's automobile try with General Motors and Volkswagen's dual Chinese automobile ventures. Imported models such as GM's Chevy Volt are excluded from this policy.

Beijing has declared the electric vehicle industry a top priority, earmarking $1.5 billion a year for the next 10 years to transform the country into one of the leading producers of clean vehicles. Buyers of locally made electric cars are also eligible for government subsidies of up to 120,000 yuan ($19,100) per vehicle. Still however the demand for electric cars in China remains weak due to high cost, limited range and the lack of charging facilities.