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 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 replacing vehicles. Since then, many regions across the country have announced their own implementation details for the 2026 old-for-new vehicle subsidy program.

朱克力, founder of the New Economy Research Institute, told Securities Daily that the widespread release of supporting policies for old-for-new vehicle replacement demonstrates the central government’s quick policy implementation, targeted local measures, and coordinated efforts to expand domestic demand. This marks the full rollout of the 2026 vehicle replacement policy, providing solid support for stabilizing auto consumption, promoting industrial upgrading, and facilitating the domestic economic cycle.

Regarding vehicle scrapping and renewal, the Implementation Rules specify that for scrapped vehicles meeting the criteria and new energy passenger cars purchased, 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 qualifying fuel vehicles and the purchase of fuel vehicles with a displacement of 2.0 liters or less, a subsidy of 10% of the new car’s sale price will be given, with a maximum of 15,000 yuan.

For vehicle replacement, the Implementation Rules clarify that for trading in qualifying 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 trading in qualifying fuel vehicles, a subsidy of 6% of the sale price will be given, with a maximum of 13,000 yuan.

The reporter learned that, in response to issues such as early depletion of subsidy funds and uneven distribution in some regions in 2025, the 2026 policies will further improve subsidy efficiency and fund security through enhanced 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 subsidies will be managed according to the principles of “total control, monthly allocation, and balanced use.” Hubei’s Department of Commerce will develop a monthly plan for subsidy fund use across the province and guide cities and prefectures to refine weekly subsidy plans based on local support funds, adjusting subsidy amounts and qualification issuance dynamically 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 prohibit requiring old vehicles to be sold to designated companies or establishing regional or technical product-specific subsidy lists or company lists.

Data shows that as of February 5, there were 335,000 applications for 2026 old-for-new vehicle subsidies, driving new car sales of 53.77 billion yuan, significantly promoting the development of the auto market and resource recycling, and supporting industry upgrading and green transformation. In January alone, the average price of new cars participating in the replacement program exceeded 160,000 yuan, a notable increase from 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, directly benefit consumers and market entities, effectively activate replacement demand for existing vehicles, release new car consumption potential, and help the auto industry shift from scale expansion to high-quality development,” said Zhu Keli.

付一夫, a special researcher at the Shanghai Commercial Bank, told Securities Daily that in 2026, the new car market prices are expected to stabilize initially and then gradually slow down, with structural differentiation. After curbing “involution” competition, reckless price cuts will be restrained, and the industry price 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 will see relatively stable prices supported by costs.

Zhu Keli also believes that as the crackdown on “involution” competition takes effect and the old-for-new policy gains momentum, the 2026 new car market prices will become more rational and structurally differentiated. 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 will remain strong, while entry-level models will see slight price 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, becoming price stabilizers. In terms of transaction volume, the new car market will maintain steady growth driven by policies, with increasing replacement purchase ratios. The used car market will shift from “volume increase with thin profits” to “both volume and profits rising,” supported by digitalization and standardization, with export and domestic sales working together to promote healthy circulation between new and used car markets.

(Edited by: Wen Jing)