China will continue offering trade-in subsidies for passenger vehicles in 2026, adjusting the program’s structure while keeping overall subsidy caps unchanged, according to a joint notice released by the National Development and Reform Commission and the Ministry of Finance.
Under the revised policy, fixed-amount subsidies will be replaced by percentage-based incentives tied to vehicle prices. Consumers scrapping older passenger vehicles and purchasing new energy vehicles (NEVs) will be eligible for subsidies equal to 12 percent of the purchase price, capped at 20,000 yuan ($2,860). Buyers of gasoline-powered passenger vehicles with engine displacements of 2.0 liters or less will qualify for subsidies of 10 percent, capped at 15,000 yuan.
The policy also covers vehicle trade-ins. Consumers transferring ownership of an existing passenger vehicle and purchasing a new NEV will receive subsidies equivalent to 8 percent of the vehicle price, capped at 15,000 yuan. Those purchasing gasoline vehicles with engines of 2.0 liters or below will receive subsidies of 6 percent, capped at 13,000 yuan.
The measures form part of China’s broader effort to stabilize consumption through its consumer goods replacement program. Authorities have allocated 62.5 billion yuan ($8.9 billion) from ultra-long-term government bonds to support the initiative in 2026, according to state broadcaster CCTV. The program covers multiple sectors, including automobiles, home appliances, and digital products.
The continuation of subsidies follows a period of weaker auto demand after several local governments suspended incentive programs in recent months due to funding constraints. Industry groups, including the China Passenger Car Association, have said the earlier pause in subsidies dampened consumer sentiment and weighed on vehicle sales, prompting policymakers to recalibrate support measures for the coming year.