Hubei Province, Henan Province, and others have issued implementation rules for old-for-new car subsidy programs

By Reporter Meng Ke

On December 30, 2025, the General Office of the Ministry of Commerce and seven other departments issued the “Implementation Rules for 2026 Old-for-New Vehicle Replacement Subsidies” (hereinafter referred to as the “Implementation Rules”), clarifying subsidy standards and methods for scrapping and replacement updates. Since then, many regions across the country have released their own implementation details for the 2026 old-for-new vehicle subsidy program.

朱克力, founder of the New Economy Research Institute of the National Development Research Institute, told Securities Daily that the intensive release of supporting policies for old-for-new vehicle replacement by multiple localities is a pragmatic move to quickly implement central policies, enable targeted local measures, and coordinate efforts to expand domestic demand. This marks the full implementation phase of the 2026 old-for-new vehicle policy, providing solid support for stabilizing auto consumption, promoting industrial upgrading, and smoothing the domestic economic cycle.

Regarding vehicle scrapping and renewal, the Implementation Rules specify that for scrapped eligible old vehicles purchased with new energy passenger cars, a subsidy of 12% of the new car’s sale price (including taxes and fees) will be provided, with a maximum of 20,000 yuan (rounded up to the nearest yuan). For scrapped eligible fuel vehicles purchased with new fuel vehicles of 2.0 liters or below, a subsidy of 10% of the new car’s sale price will be given, with a maximum of 15,000 yuan.

For vehicle replacement and renewal, the Implementation Rules clarify that for exchanging for eligible new energy passenger cars, a subsidy of 8% of the new car’s sale price will be provided, with a maximum of 15,000 yuan; for exchanging for eligible fuel passenger cars, a subsidy of 6% of the new car’s sale price will be given, with a maximum of 13,000 yuan.

It is learned that to address issues such as early depletion of subsidy funds and uneven distribution in some regions in 2025, the 2026 policies will further enhance subsidy efficiency and fund security through improved implementation and supervision. For example, on February 4, the Hubei Provincial Department of Commerce and seven other departments jointly issued the “Implementation Rules for 2026 Hubei Province Old-for-New Vehicle Replacement Subsidies,” which stipulate that, following the principles of “total control, monthly allocation, and balanced use” of subsidy funds, the Hubei Department of Commerce will develop a monthly plan for subsidy fund use across the province and guide cities and prefectures to refine weekly usage plans based on local support funds. Dynamic adjustments will be made through measures such as adjusting subsidy amounts and qualification issuance based on fund utilization. On February 25, Henan Province’s Department of Commerce and seven other departments issued the “Implementation Rules for 2026 Henan Province Old-for-New Vehicle Replacement Subsidies,” which specify that old vehicles intended for transfer or scrapping cannot be sold to designated companies, and no regional or technical product-specific subsidy lists or company lists should be set separately.

Data shows that as of February 5, there were 335,000 applications for the 2026 old-for-new vehicle subsidy, driving new car sales of 53.77 billion yuan, effectively promoting the development of the auto market and resource recycling, and supporting industry upgrading and green transformation. In January this year, the average price of new cars participating in the old-for-new program exceeded 160,000 yuan, a significant increase compared to 2025. Nationwide, 659,000 scrapped vehicles were recycled, a year-on-year increase of 50.2%.

“From the policy implementation perspective, local ‘old-for-new’ vehicle programs consider regional differences, allowing subsidies to directly benefit consumers and market entities, effectively activating existing vehicle replacement demand, releasing new car consumption potential, and helping the auto industry shift from scale expansion to high-quality development,” said Zhu Keli.

付一夫, a special researcher at the Industrial and Commercial Bank of China, told Securities Daily that in 2026, the new car market prices may show a trend of initial stability followed by gradual easing, with structural differentiation. After curbing “involution” competition, reckless price cuts will be restrained, and the industry’s pricing system will return to rationality. Mainstream models will maintain stable prices, but older models with high inventory still have room for discounts. New intelligent and electric models, supported by costs, will see relatively stable prices.

Zhu Keli also believes that as the industry’s “involution” competition is effectively regulated and the old-for-new policy gains momentum, the 2026 new car market prices will tend toward rationality and structural differentiation. After the decline of “price wars,” automakers will return to value-based competition, with mainstream models stabilizing in price, high-end new energy and fuel vehicles remaining firm, and entry-level models experiencing slight fluctuations but overall stability due to subsidies and demand concentration. With technological iteration and scale effects, new energy vehicles will continue to improve in cost-performance ratio, becoming price stabilizers. In terms of transaction scale, the new car market will maintain steady growth driven by policies, with increasing replacement purchase ratios. The used car market will shift from “volume growth with thin profits” to “both volume and profit growth,” leveraging digitalization and standardization, with export and domestic sales working together to promote a healthy cycle between new and used car markets.

(Edited by: Wen Jing)