(Bloomberg) -- China is poised to extend incentives for electric-vehicle purchases as part of broader efforts to shake off a sluggish post-pandemic period.

The foundation for China’s economic recovery is not yet solid, the nation’s state radio reported late Friday, citing a State Council meeting chaired by Premier Li Qiang. China will therefore extend and optimize new-energy vehicle purchase tax exemptions, the report said, without giving more detail.

People familiar with the matter said earlier on Friday an extension was being considered for some clean cars for another four years. One of those measures may be extending the purchase tax break for EVs and plug-in hybrids that cost less than 300,000 yuan ($42,400), one of the people said, asking not to be identified because the details are private.

Autos over that amount are broadly classed as luxury vehicles in China, so making it easier for people to buy more affordable clean cars would boost the nation’s EV adoption rate and further its goal of reaching net zero emissions by 2060.

China has been promoting its EV industry for more than a decade with generous incentives to consumers and subsidies to automakers. Buyers received discounts of as much as 60,000 yuan at one point for purchasing EVs, but those ended in 2022. While new cars generally are subject to a 10% purchase levy, this hasn’t applied to new-energy vehicles since 2014 and was recently extended through the end of 2023.

Read More: Tesla Started a China Price War That May Destroy Some Carmakers

Even so, lackluster consumer sentiment coming out of Covid has dragged on overall new-car sales in the country. Deliveries in the first four months of this year declined 1.4% from the same period in 2022.

Deliveries of EVs and plug-in hybrids rose about 36% from January through April, according to the China Passenger Car Association, though that’s a much slower pace than the 128% growth for the same four-month period last year.

Decelerating sales have contributed to the price war Tesla Inc. started in China. Most other major auto companies have discounted in response, dealing blows to many domestic companies’ earnings.

Read More: Price War Squeezes Chinese Carmakers With No Relief in Sight

--With assistance from Chunying Zhang.

©2023 Bloomberg L.P.