China's Ministry of Commerce and 7 other departments issued the 2026 Vehicle Trade-In Subsidy Implementation Rules, setting maximum subsidies of ¥20,000 for NEV scrap-and-replace and ¥15,000 for ICE vehicles. Replacement subsidies cap at ¥15,000 for NEVs and ¥13,000 for ICE models. Funding comes from ultra-long-term special treasury bonds with central-local cost sharing.
Dual-Track Subsidy Structure
The 2026 policy maintains both scrap-and-replace and trade-in replacement tracks, with refined subsidy ratios and expanded eligibility.
Scrap-and-Replace Subsidies:
- Scrap eligible old vehicle and purchase NEV: 12% of new car price, max ¥20,000
- Scrap eligible old vehicle and purchase ICE (2.0L or below): 10% of new car price, max ¥15,000
Trade-In Replacement Subsidies:
- Purchase NEV: 8% of new car price, max ¥15,000
- Purchase ICE (2.0L or below): 6% of new car price, max ¥13,000
| Subsidy Type | NEV | ICE (2.0L and below) |
|---|---|---|
| Scrap-and-Replace | 12% of price, max ¥20,000 | 10% of price, max ¥15,000 |
| Trade-In Replacement | 8% of price, max ¥15,000 | 6% of price, max ¥13,000 |
Notably, scrapping an NEV to purchase an ICE vehicle receives zero subsidy, reflecting the policy's clear bias toward new energy consumption.
Eligibility and Application Process
Compared with 2025, the 2026 rules further relax eligibility timelines:
- Gasoline passenger vehicles registered before June 30, 2013
- Diesel and other fuel vehicles registered before June 30, 2015
- NEVs registered before December 31, 2019
Applicants can submit through the National Vehicle Circulation Information Management System website or the "Vehicle Trade-In" mini-program. Required documents include scrapping certificates, purchase invoices, vehicle registration certificates, and personal identification. The policy mandates subsidy disbursement within 30 working days for qualifying applications.
Funding and Market Impact
Subsidies are funded through ultra-long-term special treasury bonds with central-local cost sharing:
- Eastern regions: central government covers 85%
- Central regions: central government covers 90%
- Western regions: central government covers 95%
In 2025, the trade-in program drove over 11.5 million new vehicle sales, generating more than ¥1.6 trillion in sales revenue. Over half of China's domestic passenger vehicle retail volume participated in the program. The enhanced 2026 policy is expected to sustain this significant consumption stimulus.
For international automotive market observers, China's continued domestic consumption support strengthens local automakers' cash flows, providing a solid foundation for overseas expansion and R&D investment. For more in-depth industry analysis, visit EX1000.COM.
