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 replacing vehicles. 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 National Research Institute of New Economy, told Securities Daily that the intensive release of supporting policies for old-for-new vehicle replacement across multiple regions is a practical move to quickly implement central policies, enable targeted local measures, and coordinate efforts to expand domestic demand. This marks the full-scale implementation 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 vehicles meeting the conditions and new energy passenger cars purchased, a subsidy of 12% of the new car’s sale price (including tax and fees) will be provided, with a maximum of 20,000 yuan (rounded up to the nearest yuan). For scrapped fuel vehicles meeting the conditions and purchasing fuel vehicles with a displacement 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, the Implementation Rules clarify that for replacing with 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 replacing with eligible fuel vehicles, a subsidy of 6% of the sale price will be given, with a maximum of 13,000 yuan.

It is 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 subsidy funds 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 plans based on local support fund scales. Dynamic adjustments will be made by regulating subsidy amounts and qualification issuance based on fund usage. 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 cars 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.

Data shows that by February 5, there were 335,000 applications for 2026 old-for-new vehicle subsidies, 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, significantly higher than in 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. This effectively activates replacement demand for existing vehicles, releases new car consumption potential, and helps 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’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 crackdown on “involution” competition takes effect and the old-for-new policies are implemented, 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 firm, while entry-level models, supported by subsidies and demand concentration, will see slight price fluctuations but overall stability. Due to technological iteration and scale effects, new energy vehicles will continue to improve in cost-performance, becoming price stabilizers. In terms of transaction scale, the new car market will maintain steady growth driven by policies, with an increasing share of replacement purchases. The used car market will shift from “volume increase with thin profit margins” to “both volume and profit rising,” leveraging digitalization and standardization, with export and domestic sales working together to promote healthy circulation between new and used car markets.