Quick Takeaways
- China’s trade-in incentives are rapidly accelerating NEV adoption while reshaping vehicle demand patterns.
- The policy also strengthens circular economy outcomes through large-scale scrappage and materials recycling.
On January 1, China’s Ministry of Commerce announced that consumer goods sales under the national trade-in program crossed CNY 2.6 trillion in 2025, highlighting the growing influence of the China automobile trade-in policy on domestic demand. Within this total, automobile purchases exceeded 11.5 million units, pushing new vehicle transaction value beyond CNY 1.6 trillion.
New Energy Vehicles represented close to 60 percent of all automobile trade-ins, reinforcing the shift toward electrification. This momentum lifted the retail market share of new energy passenger vehicles above 50 percent for nine consecutive months, reaching 59.4 percent in November. The program has emerged as a key demand-side lever supporting China’s passenger vehicle electrification strategy.
Beyond sales growth, the trade-in initiative has delivered measurable sustainability gains. The volume of scrapped vehicles increased by 24.5 percent year over year, enabling the recycling of approximately 9.6 million tons of steel and 1.3 million tons of non-ferrous metals such as copper, aluminum, and lithium. These efforts are estimated to have reduced carbon emissions by nearly 24.5 million tons.
China Automobile Trade-In Policy Framework for 2026
Building on the 2025 results, the Ministry of Commerce has drafted and issued detailed 2026 implementation rules for automobile trade-in subsidies. The framework outlines 24 targeted measures across six chapters, coordinated with relevant government bodies, and places strong emphasis on vehicle scrapping and replacement mechanisms.
Scrapping Incentives Under the China Automobile Trade-In Policy
In 2026, individual consumers scrapping eligible old passenger vehicles and purchasing qualifying new vehicles will be entitled to a one-time subsidy.
Key provisions include:
Replacement Subsidies Supporting Market Renewal
Consumers opting to sell existing passenger vehicles and replace them with eligible new models will also receive a one-off subsidy in 2026.
The replacement mechanism offers:
Together, these measures reinforce the China automobile trade-in policy as a strategic tool to stimulate vehicle demand, accelerate fleet electrification, and strengthen circular economy practices across the automotive value chain.
New Energy Vehicles represented close to 60 percent of all automobile trade-ins, reinforcing the shift toward electrification. This momentum lifted the retail market share of new energy passenger vehicles above 50 percent for nine consecutive months, reaching 59.4 percent in November. The program has emerged as a key demand-side lever supporting China’s passenger vehicle electrification strategy.
Beyond sales growth, the trade-in initiative has delivered measurable sustainability gains. The volume of scrapped vehicles increased by 24.5 percent year over year, enabling the recycling of approximately 9.6 million tons of steel and 1.3 million tons of non-ferrous metals such as copper, aluminum, and lithium. These efforts are estimated to have reduced carbon emissions by nearly 24.5 million tons.
China Automobile Trade-In Policy Framework for 2026
Building on the 2025 results, the Ministry of Commerce has drafted and issued detailed 2026 implementation rules for automobile trade-in subsidies. The framework outlines 24 targeted measures across six chapters, coordinated with relevant government bodies, and places strong emphasis on vehicle scrapping and replacement mechanisms.
Scrapping Incentives Under the China Automobile Trade-In Policy
In 2026, individual consumers scrapping eligible old passenger vehicles and purchasing qualifying new vehicles will be entitled to a one-time subsidy.
Key provisions include:
- A subsidy equal to 12 percent of the new vehicle’s selling price for scrapping New Energy Vehicles, capped at CNY 20,000
- A subsidy equal to 10 percent of the new vehicle’s selling price for scrapping fuel-powered passenger vehicles, capped at CNY 15,000
- Both the scrapped vehicle and the newly purchased vehicle must be registered under the same consumer’s name
Replacement Subsidies Supporting Market Renewal
Consumers opting to sell existing passenger vehicles and replace them with eligible new models will also receive a one-off subsidy in 2026.
The replacement mechanism offers:
- An 8 percent subsidy on the selling price for upgrading to New Energy Vehicles, capped at CNY 15,000
- A 6 percent subsidy on the selling price for purchasing fuel-powered passenger vehicles, capped at CNY 13,000
- Mandatory registration of both transferred and newly purchased vehicles under the same individual
Together, these measures reinforce the China automobile trade-in policy as a strategic tool to stimulate vehicle demand, accelerate fleet electrification, and strengthen circular economy practices across the automotive value chain.
Industry reports & Public disclosures | GAI Analysis
Click above to visit the official source.
Share: