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2024.08.17

Word count: 1613, reading time: about 3 minutes

Introduction: After the standards are raised, a subsidy of up to 20,000 yuan can be obtained by purchasing a new car by trading in an old car for a new one.

On August 16, the Ministry of Commerce and seven other departments issued a notice on further improving the work related to the old-for-new car exchange. It proposed to increase the subsidy standard for scrapping and updating. For individual consumers who meet the requirements of the "Notice on Issuing the Implementation Rules for the Subsidy for Old-for-New Car Exchange" (Shang Xiaowu Letter [2024] No. 75, hereinafter referred to as the "Subsidy Implementation Rules") issued by the Ministry of Commerce, the Ministry of Finance and other seven departments, and scrap fuel passenger cars with national emission standards of III or below or new energy passenger cars registered before April 30, 2018 between April 24, 2024 (including that day, the same below) and December 31, 2024, and purchase new energy passenger cars or fuel passenger cars with a displacement of 2.0 liters or less included in the "Catalogue of New Energy Vehicle Models for Vehicle Purchase Tax Reduction and Exemption" of the Ministry of Industry and Information Technology, the subsidy standards will be adjusted as follows:

For those who scrap the above two types of old cars and purchase new energy passenger cars, a subsidy of 20,000 yuan will be provided; for those who scrap fuel passenger cars with National III emission standards or below and purchase fuel passenger cars with a displacement of 2.0 liters or less, a subsidy of 15,000 yuan will be provided.

Eligible subsidy applications (including applications for which subsidy payments have been completed) submitted between April 24, 2024 and January 10, 2025 will be subsidized according to the standards specified in this notice. For subsidy applications that have been issued according to previous standards, local governments will make up the difference according to the standards specified in this notice.

After the standard is raised, the maximum subsidy can be 20,000 yuan

According to the latest "Notice", the new round of car trade-in will increase the subsidy standard and intensify efforts to promote car trade-in. After the standard is raised, a subsidy of up to 20,000 yuan can be obtained by purchasing a new car through trade-in.

The car trade-in policy has increased the subsidy standard for scrapping and updating. For eligible cars, the subsidy standard has been increased from the previous 10,000 yuan for purchasing new energy passenger cars and 7,000 yuan for purchasing fuel passenger cars to 20,000 yuan and 15,000 yuan respectively, both of which have increased by more than double. In addition, the new subsidy standard can be implemented retroactively. In other words, consumers who submit subsidy applications from April 24 can implement the adjusted subsidy standard. For consumers who have already received subsidies, local governments will make up the difference in subsidies according to the standards of this policy.

Subsidy scope expanded, central government funding ratio increased

In addition, this policy has further expanded the scope of subsidies for car trade-ins, and the state has also increased the proportion of central funding support for car trade-ins.

This policy includes the replacement and renewal of individual consumer passenger cars in the subsidy scope. The state directly allocates ultra-long-term special treasury bond funds to local governments to support local governments in independently implementing the scrapping and renewal of automobiles and replacement and renewal, giving local governments greater autonomy, which is conducive to more quickly and conveniently delivering real money benefits to consumers.

Which vehicles are eligible for scrapping and renewal?

People are more concerned about whether their old cars can be replaced with new ones, and which cars are eligible for the old-for-new exchange? It is understood that some provinces and cities are promoting the replacement and renewal of cars according to local standards, while there are unified national implementation rules for the scrapping and renewal of cars. In April this year, the Ministry of Commerce and seven other departments issued the "Implementation Rules for Subsidies for Old-for-New Cars", which clarified the scope of subsidies and other specific contents.

According to the regulations, vehicles that meet the conditions for old-for-new exchange refer to fuel-powered passenger cars with emission standards of National III or below or new energy passenger cars registered before April 30, 2018 (including that day). Among them, fuel-powered passenger cars with emission standards of National III or below refer to gasoline passenger cars registered before June 30, 2011, diesel passenger cars registered before June 30, 2013, and passenger cars using other fuels. The regulations also state that from April 24 to December 31 this year, individual consumers can receive state subsidies as long as they scrap the above two types of old cars and purchase new energy passenger cars or fuel passenger cars within the regulations.

The "old for new" effect is evident, driving the growth of automobile consumption

Since March this year, the country has launched a car trade-in campaign, and the policy has gradually taken effect. How many people have applied for the trade-in program to buy cars? What is the effect on boosting car consumption growth?

Data from the Ministry of Commerce show that as of 10:00 on August 13, 2024, more than 600,000 applications for automobile scrapping and renewal subsidies have been received, with more than 10,000 new applications per day. From January to July this year, the national automobile recycling volume was 3.509 million, a year-on-year increase of 37.4%. After the implementation of the automobile scrapping and renewal subsidy policy, the number of scrapped vehicles has increased rapidly. Among them, in July, the national automobile recycling volume was 731,000, a year-on-year increase of 93.7%.

As the effect of the car trade-in policy gradually emerged, it also boosted the growth of car sales. From January to July this year, my country's automobile production and sales reached 16.179 million and 16.31 million respectively, up 3.4% and 4.4% year-on-year. Among them, the production and sales of new energy vehicles reached 5.914 million and 5.934 million respectively, up 28.8% and 31.1% year-on-year, and the sales of new energy vehicles accounted for 36.4% of the total sales of new cars.

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