China will continue offering car trade-in subsidies in 2026

China will continue offering trade-in subsidies in 2026 to support auto consumption, with adjustments to the implementation details compared to 2025. The National Development and Reform Commission and Ministry of Finance announced this decision in a joint notice today. While maintaining the subsidy caps, the fixed-amount subsidies will be replaced with percentage-based subsidies relative to the vehicle price. 

Individual consumers scrapping their passenger vehicles and purchasing new energy passenger vehicles or gasoline passenger vehicles with 2.0-liter or smaller displacement will qualify for subsidies. 

For new energy passenger vehicles, the scrapping subsidy amounts to 12 percent of the purchase price, capped at 20,000 yuan ($2,860). 

For gasoline passenger vehicles with 2.0-liter or smaller engines, the subsidy is 10 percent of the purchase price, capped at 15,000 yuan ($2,141). 

Individual consumers who transfer a passenger vehicle registered under their name and purchase a new energy passenger vehicle or a gasoline-powered passenger vehicle with an engine displacement of 2.0 liters or less are eligible for a trade-in subsidy. 

For new energy passenger vehicles, the trade-in subsidy is 8 percent of the vehicle price, capped at 15,000 yuan ($2,141); For the purchase of a gasoline-powered passenger vehicle with an engine displacement of 2.0 liters or less, the subsidy is 6 percent of the vehicle price, capped at 13,000 yuan ($1,860). 

This is part of China's comprehensive consumer support initiative. The country has allocated 62.5 billion yuan ($8.9 billion) in special funds from ultra-long-term government bonds in advance to support the 2026 consumer goods replacement program, according to a report by state broadcaster CCTV. Supported sectors include automobiles, home appliances, and digital products. 

China continued its vehicle trade-in subsidies this year, serving as a key driver supporting auto consumption. Starting in September, some local governments suspended these subsidies as fiscal funds were exhausted. 

By mid-November, most cities had halted the subsidies, beginning to impact China's auto sales. Earlier this month, the China Passenger Car Association (CPCA) said in a report that adjustments to trade-in subsidies in most provinces have heightened consumer wait-and-see sentiment, delivering a significant blow to the November auto market.