China EV Subsidies Return in August: Xi’an Offers Up to RMB 10,000

As August begins, local governments across China have introduced another round of auto consumption incentives, with new vehicle purchase subsidy programs rolling out in multiple regions.

Compared with measures introduced in the first half of the year, the latest policies place greater emphasis on streamlining application procedures, optimizing subsidy mechanisms, and clarifying funding allocations and distribution rules.

These policies aim to stimulate vehicle demand in the second half through local consumption incentives.

New energy vehicles (NEVs) remain the primary focus of the latest subsidy programs.

Xi’an offered a new round of vehicle purchase subsidies from August 1 to October 8. Individuals purchasing eligible NEV passenger vehicles can receive subsidies equivalent to 2% of the vehicle price, capped at RMB 10,000 ($1,480).

Consumers purchasing eligible 2026-model NEVs can also receive an additional subsidy ranging from RMB 2,000 ($296) to RMB 3,000 ($444).

Buyers of eligible used passenger vehicles are entitled to subsidies equal to 1.5% of the purchase price, up to RMB 4,000 ($592).

Chongqing has also adjusted its vehicle purchase subsidy program. Beginning August 1, buyers purchasing vehicles priced at RMB 150,000 ($22,217) or above can apply for a subsidy of RMB 6,000 ($888), while purchases of RMB 300,000 ($44,430) or more qualify for RMB 8,000 ($1,185).

In addition to increasing subsidy levels, some cities are simplifying application procedures.

Jinan’s Bureau of Commerce announced that starting in August, consumers applying for vehicle scrappage replacement or trade-in subsidies no longer need to obtain prior eligibility approval and can submit applications directly online.

Qingdao has allocated RMB 250 million ($37 million) for August vehicle scrappage replacement and trade-in subsidy programs, with funds distributed on a first-come, first-served basis until exhausted.

Since the beginning of the year, more than 10 cities—including Chengdu, Yibin, Chongqing, Guangzhou, Zhuhai, Jinan and Hohhot—have introduced purchase incentives covering NEVs and internal combustion engine passenger vehicles.

Meanwhile, Shanghai’s Putuo District, Shenzhen and Suzhou continue to implement similar programs.

Suzhou has added RMB 100 million ($14.8 million) in vehicle consumption subsidies while extending the program through the end of September.

It is worth noting that local consumption subsidies differ from China’s national vehicle trade-in incentive program.

Local subsidies generally apply to qualifying new vehicle purchases completed within designated periods. By contrast, the national trade-in program requires consumers to scrap or trade in eligible existing vehicles.

Under the national program, consumers scrapping an eligible vehicle to purchase an NEV can receive subsidies of up to RMB 20,000 ($2,956), while trading in an eligible vehicle for an NEV qualifies for subsidies of up to RMB 15,000 ($2,217).

In some regions, local and national incentives can be combined, further reducing purchase costs.

The continued rollout of local subsidy programs reflects ongoing pressure on China’s auto consumption.

Data from the National Bureau of Statistics showed that total retail sales of consumer goods reached RMB 24.8722 trillion ($3.68 trillion) in the first half of the year, up 1.3% year-on-year.

Retail sales excluding automobiles totaled RMB 22.9034 trillion ($3.39 trillion), up 2.8%.

Retail sales of automobiles totaled RMB 1.9688 trillion ($291.6 billion), down 12.6% year-on-year, significantly underperforming other consumer goods categories.

As local governments continue to introduce consumption support measures and the traditional “Golden September, Silver October” auto sales season approaches, whether these regional purchase incentives can help revive the market will become clearer over the coming months.