Multiple Regions Pause Vehicle Replacement Subsidies While Optimizing New Energy Vehicle Purchase Tax

In recent months, the excitement surrounding car replacement subsidies has grown significantly, prompting frequent adjustments to promotional schemes across various regions. On September 28, the Jiangsu Provincial Department of Commerce announced changes to its vehicle trade-in policy, highlighting that the “automobile replacement subsidy policy will be suspended as of 24:00 on September 28, 2025.” The department also stated that a quota management system would be implemented for vehicle scrapping and replacement, which includes a new process for claiming subsidies starting from 00:00 on September 29, 2025, where applicants must first obtain eligibility before they can apply for subsidies (based on the issuance date of the new vehicle’s Uniform Invoice for Motor Vehicle Sales).

On the same day that Jiangsu paused its automobile replacement subsidies, an announcement regarding the adjustment of the vehicle replacement policy in Ningbo was released by the Ningbo Municipal Bureau of Commerce. This announcement indicated that the city would also suspend the automobile replacement subsidy policy effective October 11, 2025. Earlier, the Guangxi Autonomous Region Department of Commerce had declared that as of 24:00 on September 23, 2025, it would pause its vehicle replacement subsidy program, with eligibility for new purchases determined by the validity of the Uniform Invoice for Motor Vehicle Sales issued between January 1, 2025, and September 23, 2025, and Motor Vehicle Registration Certificate valid until September 30, 2025.

Reports indicate that this trend of multiple regions simultaneously suspending “subsidies” is not unprecedented. Several provinces and cities that continue other policies have also shifted to a “first obtain eligibility, then apply for subsidies” approach, clearly stating that “the quantity is limited, and it is first-come, first-served until exhausted.” According to industry insiders, “The replacement subsidy policy has shown a significant stimulating effect on the automotive market, with consumers actively participating and maintaining high engagement levels.”

Beyond vehicle replacement subsidies, adjustments to the new energy vehicle purchase tax policy are also a focal point of market attention. The announcement released in 2023 regarding the continuation and optimization of the new energy vehicle purchase tax exemption states that vehicles purchased between January 1, 2024, and December 31, 2025, will be exempt from purchase tax, with a maximum exemption of 30,000 yuan per vehicle for new energy passenger cars. Additionally, vehicles purchased between January 1, 2026, and December 31, 2027, will be subject to a halved purchase tax, with a maximum reduction of 15,000 yuan per vehicle.

During the recent 2025 World New Energy Vehicle Conference, Xiong Jijun, Deputy Minister of the Ministry of Industry and Information Technology, discussed the topic of “new energy vehicle purchase tax.” He emphasized the need to further expand market consumption, implement a new round of stable growth initiatives in the automotive industry, optimize tax incentives such as the new energy vehicle purchase tax and vehicle and vessel tax, and promote initiatives for new energy vehicles in rural areas, as well as pilot projects for comprehensive electrification of public sector vehicles and the enhancement of charging and battery-swapping facilities in county regions.

Moreover, Zhu Huarong, Secretary of the Party Committee and Chairman of China Changan Automobile, suggested that the implementation of the 5% purchase tax on new energy vehicles starting next year should be gradual. He proposed a phased approach, beginning with a delay in taxation during the off-peak months of January and February, and then gradually increasing by 1% each month, reaching the full 5% by June or July. This strategy would help better control industry capacity, logistics, and costs.