More subsidies, simpler process for car trade-ins

China's Ministry of Commerce and six other government departments announced Friday that higher subsidies and a simpler application process are introduced to encourage car owners to scrap their old vehicles and buy new ones, Xinhua reported.

Those purchasing a new energy vehicle (NEV) will enjoy a subsidy of 20,000 yuan (US$2,800) and those buying a fuel vehicle with a 2.0-liter or below engine will be given 15,000 yuan respectively, the report said. The new subsidies doubled previous standards of 10,000 yuan for NEVs and 7,000 yuan for fuel vehicles. The subsidies apply to car owners who scrap their old cars and purchase new vehicles between April 24 and the end of 2024.

The AITO booth attracts visitors at the Beijing auto show in April 2024. China Daily

The review and subsidy allocation process for scrapping cars and trade-in has also been optimized, with online application available at the national vehicle transaction administration website.

China launched the car trade-in campaign in April to boost domestic consumption. The subsidies will be allocated by the Central Government and funded by a special treasury bond with extremely long maturity.

Xu Xingfeng, an official with the Ministry of Commerce, said that as of June 25, the ministry has received about 113,000 applications for car trade-in subsidies, with the numbers growing.

Data from the China Association of Automobile Manufacturers showed that in July, NEV production stood at 984,000 units, up 22.3% year-on-year, while sales of NEVs totaled 991,000 units, up 27% on a yearly basis.

The domestic monthly retail penetration rate of NEVs reached 51.1% in July, which means that in China, the majority of consumers opted for NEVs when purchasing passenger cars, according to statistics released by the China Passenger Car Association on Aug. 8.