Analysis of the Impact of Local Vehicle Trade-In Subsidy Policies

Based on collected data and materials, I systematically analyze the impact of local vehicle trade-in subsidy policies for you.

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Item	Details
Subsidy Standard	New energy passenger vehicles: RMB 15,000/unit; Fuel passenger vehicles: RMB 13,000/unit
Eligibility	Sell or transfer old vehicles registered before January 8, 2025, and purchase new vehicles in Chongqing
Time Frame	January 1 to December 31, 2025 (or until funds are exhausted)
2025 Remaining Quota	RMB 59.6 million (applications accepted until January 10, 2026)

This policy is a local implementation detail of the national “Two Renewals” policy (equipment renewal and consumer goods trade-in), and is implemented under the principle of

[1].

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According to data from the Ministry of Commerce, the 2024 vehicle trade-in policy achieved remarkable results [2][3]:

Indicator	2024 Data	Year-on-Year Growth
Vehicle Scrap and Renewal	Over 2.9 million units	-
Trade-In and Renewal	Over 3.7 million units	-
Automobile Sales Driven by Trade-In	Over RMB 920 billion	-
2025 Trade-In Market Scale	Expected to exceed RMB 180 billion	-

: The national total passenger vehicle trade-in market reached 2.793 million units, with a year-on-year increase of 1.002 million units, representing a 100% year-on-year growth [4].

According to research analysis from Ping An Securities [5]:

• In 2024, the number of vehicles eligible for scrap subsidies was approximately 6.6 million, with actual scrap and renewal reaching approximately 1.5 million, representing a scrap and renewal rate of
  23%
• Assuming that
  20% of automobile consumption in 2025 is policy-driven
  , the scrap, renewal, and trade-in policies will drive approximately
  3.5 million vehicle sales
• Based on this calculation, the average sales price driven by trade-in is approximately
  RMB 139,000/unit

Cui Dongshu, Secretary-General of the China Passenger Car Association (CPCA), stated [6]:

“The trade-in policy stimulates replacement demand, and this consumer group is highly sensitive to policies, leading to significant fluctuations in market demand.”

• Policy Covers the Entire Year
  : The scale of vehicle demand benefiting from the trade-in policy in 2025 is expected to reach
  10 million units
• The 2025 “Two Renewals” policy is expected to drive 3.5 million vehicle sales
• CPCA Forecast
  : In 2025, domestic passenger vehicle retail sales will reach 23.4 million units (2% growth), and new energy passenger vehicle retail sales will reach 13.3 million units (20% growth)

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Based on 2024 financial report data of various automobile manufacturers [7]:

Automobile Manufacturer	Non-GAAP Net Profit (RMB 100 million)	Year-on-Year Growth Rate
BYD	370	+29.9%
Great Wall Motors	97	+101.4%
Geely Automobile	85	+51.5%
Seres	56	Turned profitable from loss

:

• Private automobile manufacturers have strong profit performance, and the trade-in policy has effectively boosted market sales
• From January to September 2025, the profit margin of the automobile industry recovered to a mid-to-low level of 4.5% (driven by increased scale and stabilized price promotions)

:

• BYD
  : As a leader in new energy vehicles, its non-GAAP net profit reached RMB 37 billion in 2024, with a year-on-year growth of 29.9%, directly benefiting from the high subsidy of RMB 15,000 for new energy vehicles
• Changan Automobile
  : A local Chongqing-based manufacturer, its non-GAAP net profit attributable to parent company shareholders reached RMB 1.477 billion, with a year-on-year growth of 26.36%, fully benefiting from the local trade-in subsidy policy
• Seres
  : Turned from a loss (RMB -4.8 billion) to a profit (RMB 5.6 billion), which is closely related to the hot sales of its AITO series models and policy stimulus

:

• New energy vehicle manufacturers benefit more than fuel vehicle manufacturers (RMB 2,000 subsidy difference)
• Mid-range models with price competitiveness (in the RMB 100,000-RMB 150,000 range) benefit the most from trade-in subsidies

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According to notices from the Chongqing Municipal Commission of Commerce [1][8]:

• Subsidy intensity aligned with national policies
  : RMB 15,000 for new energy vehicles, RMB 13,000 for fuel vehicles
• Wide coverage
  : Covers 38 districts and counties in Chongqing
• Connection with national policies
  : Transactions from January 1 to January 8, 2025, can be executed in accordance with 2024 standards

Impact Dimension	Specific Performance
Local Sales	The remaining 59.6 million yuan in quota is expected to support the sales of about 4,000-4,500 new vehicles
Industrial Driving Effect	Drives approximately RMB 600 million-RMB 800 million in automobile sales and related service consumption in Chongqing
Brand Coverage	Mainstream brands such as Changan, Seres, and BYD have all benefited
Consumption Node	The concentrated application period before January 10, 2026, will form a short-term sales peak

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• Consumption Activation
  : The trade-in policy drives annual automobile sales of over RMB 920 billion [3]
• Industrial Stability
  : Effectively offset the pressure of a 17.3% decline in fuel vehicle sales in 2024 [9]
• Structural Optimization
  : Promoted the increase of new energy vehicle penetration rate (reached 50.2% in the first half of 2025) [10]
• Green Transformation
  : The ownership of new energy vehicles in 2024 increased by 5.4 times compared to 2020

Risk Point	Description
Policy Dependence	Replacement consumer groups are highly sensitive to policies, leading to significant demand fluctuations after policy withdrawal
Overdraft Effect	Year-end sales rush may lead to weak consumption in early 2026
Regional Differences	Variations in policy intensity across regions due to different fiscal pressures
Subsidy Funds	The CPCA estimates that the subsidy fund demand in 2025 will exceed RMB 200 billion, far exceeding historical peaks

• Cui Dongshu predicts that the automobile market will “
  stabilize and recover
  ” in 2026, achieving zero or slight positive growth
• With early policy launch and rapid implementation, the automobile market is expected to achieve a “good start” before the Spring Festival
• New energy vehicles will remain the main growth driver, with overall sales (including exports) expected to reach 20 million units

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:

1. Significant Policy Impact
   : The trade-in policy has become a core engine driving automobile consumption, and is expected to drive approximately 3.5 million vehicle sales in 2025, accounting for about 15% of annual sales

2. Differentiated Regional Effects
   : Local government subsidy policies have a significant boosting effect on regional sales, but the effect depends on subsidy intensity and implementation efficiency

3. Uneven Enterprise Benefits
   : New energy vehicle manufacturers and mid-range brands with price competitiveness benefit the most

4. Mainly Short-Term Stimulus
   : The policy mainly activates existing replacement demand, with limited effect on developing the incremental market

:

• Consumers
  : Pay attention to the policy window period (before January 10, 2026), especially the remaining 59.6 million yuan quota in Chongqing
• Automobile Manufacturers
  : Need to balance policy dividends and market competitiveness building, and avoid over-reliance on subsidies
• Investors
  : Focus on leading enterprises that benefit from the trade-in policy (such as BYD, Changan, and Seres)

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[1] Notice of the Chongqing Municipal Commission of Commerce on Implementing the 2025 Vehicle Trade-In Subsidy Policy (https://www.qianjiang.gov.cn/bmjd/xzfgzbm/qsww/zwgk_49161/gkml/zzcwj/qtwj/202502/W020250208574874575464.pdf)

[2] China’s New Energy Vehicles Exceed 12.8 Million Units in Both Production and Sales in 2024, Leading the World for 10 Consecutive Years - Securities Times (https://www.stcn.com/article/detail/1491990.html)

[3] Significant Results of Consumer Goods Trade-In in 2025 - Xinhua News (http://www.news.cn/politics/20260103/1e77211ba29341ffa1bad109c72ae046/c.html)

[4] Dongchedi and China Automotive Data Center Release Trade-In Analysis Report, Highlighting Policy Effects in 2025 (https://auto.youth.cn/xw/202506/t20250609_16048294.htm)

[5] Trade-In Policy Clarified, Stimulus Effect Will Exceed 2024 - Ping An Securities (https://pdf.dfcfw.com/pdf/H3_AP202501091641867867374_1.pdf)

[6] Policy “Window Period” Game Unfolds in Year-End Automobile Market - Securities Times (https://www.stcn.com/article/detail/3545918.html)

[7] New Trends of Three Types of Automobile Manufacturers from Financial Reports - Eastmoney (https://pdf.dfcfw.com/pdf/H3_AP202506121689448300_1.pdf)

[8] Notice of the Chongqing Municipal Development and Reform Commission and Chongqing Municipal Finance Bureau on Issuing the “2025 Work Plan for Equipment Renewal and Consumer Goods Trade-In in Chongqing” (https://www.ndrc.gov.cn/xwdt/ztzl/tddgmsbgxhxfpyjhx/dfjy/202508/t20250820_1399924.html)

[9] Monthly Production and Sales Data of the Automobile Industry - China Association of Automobile Manufacturers (https://www.caam.org.cn/)

[10] Multiple Effects Brought by the Trade-In Policy - National Development and Reform Commission (https://www.ndrc.gov.cn/xwdt/ztzl/tddgmsbgxhxfpyjhx/gzdt/202508/t20250820_1399921.html)