Overview

• China lowered its luxury-car tax threshold to €108,000 and introduced a 10 percent levy on new vehicles priced above that mark.
• For the first time, the surcharge applies to electric and fuel-cell vehicles alongside traditional combustion-engine cars.
• Chinese automakers such as BYD, Nio and Geely gain a price advantage as most of their models fall below the new cutoff.
• Mercedes-Benz reported a nearly 20 percent drop in Q2 2025 China sales to 293,000 vehicles and sold about 16,000 cars in the taxed segment during the first half of the year.
• Imported top-tier models now face an additional 15 percent tariff and up to 40 percent consumption tax, compounding costs for foreign brands.