ABSTRACT Since the 2 1st century, the progress of China's automobile industry is obvious and the volume of both automobile production and sales have reached a record high According to statistics of the Automobile Industry Association, China's car ownership has reached 194 million and the annual production and sales scale have exceeded 28 million as of 2016. China has become a well-deserved automobile producing and selling country all over the world. However, the increasingly serious problem of energy and environment caused by the rapid development of automobile industry is not only affecting the sustainable development of the automobile industry, but also the construction of low-carbon society. Under this circumstance, the development of new energy vehicles has become the fundamental way of energy reform in the field of transportation and the inevitable requirement of ecological civilization construction Chinas government attaches great importance to the development of new energy vehicles industry and clearly puts forward the implementation of new energy vehicles strategy. In addition, the government also takes it as a strategic emerging industry and has carried out a series of industrial planning and supporting policies. Taxation policy as an important policy tool for the implementation of micro-market intervention in our country, which can involve in all aspects of industrial development, plays an important role in promoting the development of emerging industries. Therefore, study of taxation policy and its effect of new energy vehicles industry can help better serve the process of industrialization of new energy vehicles in China Based on the review of previous studies, this paper focuses on the taxation policy and its effect in promoting the development of new energy vehicles industry in China First of all, this paper illustrates the theoretical basis and tax incentive mechanism from the tax perspective. And then gives a brief introduction of the development of Chinas new energy vehicles industry, including analyzing its production and sales scale, technology level and taxation policy. On this basis, uses empirical means to espectively figure out the impact of vehicle purchase tax exemption policy on the ales market and corporate income tax preferential policy on the r&d investment of listed companies, which are on the new energy vehicles industry. At the end of this paper, the conclusions of the study are summarized. The results of policy analysis show that China is currently lacking the tax supporting policy for the new energy vehicles industry, and the supporting role of the state in the development of the newIII ABSTRACT Since the 21st century, the progress of China's automobile industry is obvious and the volume of both automobile production and sales have reached a record high. According to statistics of the Automobile Industry Association, China's car ownership has reached 194 million and the annual production and sales scale have exceeded 28 million as of 2016. China has become a well-deserved automobile producing and selling country all over the world. However, the increasingly serious problem of energy and environment caused by the rapid development of automobile industry is not only affecting the sustainable development of the automobile industry, but also the construction of low-carbon society. Under this circumstance, the development of new energy vehicles has become the fundamental way of energy reform in the field of transportation and the inevitable requirement of ecological civilization construction. China's government attaches great importance to the development of new energy vehicles industry and clearly puts forward the implementation of new energy vehicles strategy. In addition, the government also takes it as a strategic emerging industry and has carried out a series of industrial planning and supporting policies. Taxation policy as an important policy tool for the implementation of micro-market intervention in our country, which can involve in all aspects of industrial development, plays an important role in promoting the development of emerging industries. Therefore, study of taxation policy and its effect of new energy vehicles industry can help better serve the process of industrialization of new energy vehicles in China. Based on the review of previous studies, this paper focuses on the taxation policy and its effect in promoting the development of new energy vehicles industry in China. First of all, this paper illustrates the theoretical basis and tax incentive mechanism from the tax perspective. And then gives a brief introduction of the development of China's new energy vehicles industry, including analyzing its production and sales scale, technology level and taxation policy. On this basis, uses empirical means to respectively figure out the impact of vehicle purchase tax exemption policy on the sales market and corporate income tax preferential policy on the R&D investment of listed companies, which are on the new energy vehicles industry. At the end of this paper, the conclusions of the study are summarized. The results of policy analysis show that China is currently lacking the tax supporting policy for the new energy vehicles industry, and the supporting role of the state in the development of the new