“Impact of ‘Two New’ Policies: Over 10 Million Applications for Vehicle Trade-in Subsidies”

Since the beginning of this year, under the backdrop of coordinated macro policies, the “Two New” policy (which promotes large-scale equipment upgrades and the replacement of old consumer goods) has been implemented with increasing intensity, leading to a further expansion of domestic market demand. For instance, in the automotive industry, as of May 5, the number of applications for the old-for-new vehicle subsidy nationwide has surpassed 3 million, providing robust support for the stable growth of China’s automotive market.

During a press conference held by the State Council Information Office, Fu Linghui, spokesperson for the National Bureau of Statistics, noted that in April, the production of new energy vehicles, lithium-ion power batteries for vehicles, and charging piles increased by 38.9%, 61.8%, and 43.1%, respectively. Additionally, the value added in the manufacturing of smart unmanned aerial vehicles and smart vehicle-mounted equipment grew by 74.2% and 29.3%, significantly outpacing the growth rate of large-scale industries.

The China Association of Automobile Manufacturers (CAAM) reported that in April 2025, the production and sales of automobiles reached 2.619 million and 2.59 million, respectively, marking year-on-year increases of 8.9% and 9.8%. From January to April 2025, production and sales totaled 10.175 million and 10.06 million, showing year-on-year growth of 12.9% and 10.8%.

Cui Dongshu, Secretary-General of the Passenger Car Market Information Joint Conference, stated that the passenger car replacement policy is now following the scrapping subsidy policy, which has contributed to recent growth in the automotive market. “We hope for sustainable and powerful follow-up policies in the future, such as personal income tax reductions for car buyers and the promotion of new energy vehicles in rural areas,” he commented.

As of this year, the number of subsidy applications has exceeded 3.22 million. Supported by these policies, the domestic automotive market submitted a commendable performance in April 2025. According to CAAM’s data, domestic sales of automobiles in April amounted to 2.073 million, a year-on-year increase of 11.7%. Notably, the domestic sales of traditional fuel vehicles reached 1.048 million, reflecting a decline of 6.4%.

In summary, from January to April 2025, domestic automobile sales totaled 8.123 million, representing a year-on-year growth of 12%. Although traditional fuel vehicle sales decreased by 5.7% to 4.464 million, the decline has narrowed compared to the previous year when sales were 13.989 million, down 17.3% year-on-year.

“Overall, the data from April this year is quite positive. Despite facing significant economic pressures, the automotive industry has seen production and sales exceed 10 million for the first four months, setting a historical record for the same period,” said Chen Shihua, Secretary-General of CAAM. He noted that the automotive market continues to thrive due to a combination of policy support and technological advancements.

Since the implementation of the old-for-new vehicle policy in 2024, the cumulative number of subsidy applications has exceeded 10 million. This year, as the policy continues to be effective, applications have reached 3.225 million, comprising 1.035 million for scrapping and 2.19 million for replacement.

Driven by the subsidy policy, more environmentally friendly models and advanced handling performance have become the top choices for buyers, significantly boosting automotive consumption. Chen Shihua expressed optimism about the overall development of China’s automotive industry. “On April 25, the Central Political Bureau meeting emphasized the need to continuously improve the policy toolbox for stabilizing employment and the economy, which aligns with the comprehensive policies introduced last September and the tasks outlined in the national two sessions, expected to provide strong support for the economy and further boost domestic demand in the automotive sector,” he stated.

Increased Exports of New Energy Vehicles

Despite facing various complex internal and external challenges, China’s automotive exports have continued to show a year-on-year growth trend this year. In April 2025, automobile exports totaled 517,000, reflecting a month-on-month increase of 2% and a year-on-year increase of 2.6%. From January to April 2025, exports reached 1.937 million, marking a year-on-year growth of 6%.

Notably, the data for new energy vehicle exports is particularly impressive. According to CAAM, in April 2025, China exported 200,000 new energy vehicles, representing a month-on-month increase of 27% and a year-on-year increase of 76%. From January to April, new energy vehicle exports amounted to 642,000, showing a year-on-year growth of 52.6%.

In contrast, traditional fuel vehicle exports have declined. In April 2025, exports of traditional fuel vehicles reached 317,000, down 9.3% month-on-month and 18.7% year-on-year. From January to April, exports totaled 1.295 million, reflecting a year-on-year decrease of 7.9%.

Chen Shihua analyzed that the performance of new energy vehicle exports in April and from January to April 2025 is considerably better than that of traditional fuel vehicles, which contrasts with last year’s situation. In 2024, automobile exports were primarily driven by traditional fuel vehicles, while this year, the growth in exports is propelled by new energy vehicles.

According to CAAM’s previous disclosure, in 2024, China’s total automobile exports reached 5.859 million, a year-on-year increase of 19.3%. Traditional fuel vehicle exports accounted for 4.574 million, up 23.5%, while new energy vehicle exports reached 1.284 million, marking a growth of 6.7%. This indicates that the growth in automobile exports in 2024 was primarily supported by traditional fuel vehicles, which made up 21.9% of total exports. By January to April 2025, new energy vehicles have already accounted for over one-third of total exports.

An industry insider mentioned that as countries worldwide accelerate their carbon neutrality and green transformation goals, the acceptance of new energy vehicles in major export markets such as Europe, Latin America, the Middle East, and Southeast Asia has noticeably increased. “In contrast, traditional fuel vehicles are facing stronger environmental policy pressures and slowed new demand. With ongoing price wars in the domestic new energy vehicle market, profit margins for companies in domestic sales channels are being compressed. In this context, the export market offers more stable prices and better profit prospects, making exports an important avenue for new energy vehicle manufacturers to enhance their financial performance.”