In recent months, the popularity of vehicle replacement subsidy policies has surged, leading to frequent adjustments in promotional schemes across various regions. On September 28, the Jiangsu Provincial Department of Commerce announced a significant change in its vehicle replacement policy. The announcement stated that the “automobile replacement subsidy policy will be suspended as of September 28, 2025, at 24:00.” Additionally, the department indicated that there will be a limit on the management of vehicle scrappage and replacement, which includes a new approach starting September 29, 2025, at 00:00. Under this new protocol, applicants will need to first obtain eligibility before applying for subsidies, based on the issuance date of the new vehicle’s Uniform Invoice for Motor Vehicle Sales.
On the same day as Jiangsu’s announcement, the Ningbo Municipal Bureau of Commerce released a notice stating that starting October 11, 2025, the city will also suspend its automobile replacement subsidy policy. Earlier, the Guangxi Autonomous Region’s Department of Commerce had announced that, effective from September 23, 2025, at 24:00, it would halt its vehicle replacement subsidy activities. For applicants purchasing new passenger cars, the Uniform Invoice for Motor Vehicle Sales will be valid only from January 1, 2025, to September 23, 2025, while the Vehicle Registration Certificate will be valid from January 1, 2025, to September 30, 2025.
This trend of multiple regions concurrently suspending local subsidies is not unprecedented. Other provinces that continue some policies have also shifted to a “first obtain eligibility, then apply for subsidies” approach, explicitly stating that “the quantity is limited, and it is first come, first served until exhausted.” According to industry insiders, this trend indicates that the replacement subsidy policies have a significant stimulating effect on the automotive market, with high consumer participation rates remaining robust.
Apart from the vehicle replacement subsidies, adjustments to the New Energy Vehicle (NEV) purchase tax policy are also garnering attention. An announcement released in 2023 regarding the continuation and optimization of NEV purchase tax exemptions highlighted that vehicles purchased between January 1, 2024, and December 31, 2025, will be exempt from vehicle purchase tax, with a maximum exemption of 30,000 yuan per vehicle. For purchases made between January 1, 2026, and December 31, 2027, the vehicle purchase tax will be halved, with a reduction of up to 15,000 yuan per vehicle.
In a recent discussion at the 2025 World New Energy Vehicle Conference, Xiong Jijun, Vice Minister of the Ministry of Industry and Information Technology, addressed the topic of NEV purchase tax. Zhu Huarong, Secretary of the Party Committee and Chairman of Changan Automobile, suggested a smooth transition for the 5% purchase tax on NEVs that is set to be enforced next year. He proposed implementing a gradual increase starting from the off-peak season, such as delaying collection in January and February, followed by a monthly increase of 1% starting in March, reaching the full 5% by June or July. This approach, he argued, would allow for better control of industry capacity, transport, and costs.
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