Stabilizing Growth in the Automotive Market: Release of 690 Billion Yuan Special Bonds and Support for Vehicle Purchase Tax

Stable Growth in the Automotive Market: The Issuance of the Fourth Batch of 69 Billion Yuan in Long-Term Special Bonds and Support for Vehicle Purchase Tax

September 30, 2025 – The National Development and Reform Commission (NDRC), in collaboration with the Ministry of Finance, has allocated the fourth batch of 69 billion yuan in long-term special bonds this year to support the replacement of consumer goods. This funding is part of a total of 300 billion yuan in central government funds allocated throughout the year.

As the peak consumption season approaches, both policy initiatives and corporate strategies are working together to ensure steady growth in the automotive market. According to a recent announcement on the NDRC’s official website, local governments are urged to effectively manage the pace of their work, improve funding usage plans, ensure balanced and orderly expenditure of subsidy funds, enhance product quality and price supervision, and strictly combat fraudulent activities.

On the same day, the Hangzhou Municipal Bureau of Commerce released a notice regarding adjustments to the city’s vehicle replacement policy for 2025. According to the notice, starting from October 9, 2025, the car replacement subsidy policy will be suspended in Hangzhou. Furthermore, consumers applying for vehicle scrappage subsidies must ensure that both the registration location of the scrapped vehicle and the new vehicle’s registration are within Hangzhou. The subsidy standards, application processes, and other requirements will continue to follow the original policy.

According to incomplete statistics from reporters, other provinces and cities, including Jiangsu, Guangxi, and Ningbo, have also announced a pause on the vehicle replacement subsidy policy since September. The Jiangsu Provincial Department of Commerce indicated that the policy would be suspended as of September 28, 2025, and that there would be a cap on vehicle scrappage updates.

As September marks the traditional peak season, combined with the full rollout of national subsidies and local purchasing incentives, some regions are offering early bird subsidies, boosting consumer enthusiasm for vehicle purchases. Data from the China Passenger Car Association shows that from September 1 to 27, retail sales of passenger vehicles reached 1.776 million, reflecting no year-on-year growth compared to September of last year but a 12% increase compared to the previous month. Total retail sales for the year reached 16.54 million, a year-on-year increase of 8%.

On the production side, major manufacturers are also implementing policies to ensure stable operations in light of upcoming adjustments to vehicle purchase tax policies. On September 30, Li Auto announced the “Li Auto i6 Peace of Mind Purchase Plan,” which guarantees coverage for any tax differences caused by upcoming tax cuts for users who complete their orders by October 31, 2025, and take delivery in 2026.

Earlier, Zeekr stated that they are actively adjusting production capacity. If the current capacity for the Zeekr 9X does not meet delivery needs, they will subsidize the tax reduction for next year. NIO also announced similar measures, with plans to increase production capacity to over 40,000 vehicles this year and offer subsidies for the ES8 if production fails to meet delivery demands.

Industry analysts suggest that these “safety net” policies are intended to alleviate consumer concerns and optimize order volumes during the upcoming National Day holiday and the fourth quarter. They also view these measures as essential for ensuring a smooth transition in the market.

According to a notice issued two years ago, after two years of exemption from vehicle purchase tax for new energy vehicles in 2024 and 2025, the tax will be halved in the following two years, with a maximum tax reduction of 15,000 yuan per vehicle.

Data indicates that the three companies implementing “safety net” tax policies have already seen substantial order volumes post-launch. For instance, Zeekr reported over 10,000 pre-orders for the Zeekr 9X within 13 minutes of its launch, while Li Auto’s i6 surpassed 10,000 orders within 5 minutes and accumulated over 20,000 orders on its first day. Although NIO has not disclosed specific order numbers for the new ES8, estimates suggest actual orders may range between 48,000 and 51,000.

From a corporate perspective, companies like Zeekr, Li Auto, and NIO are facing pressures to adjust production capacity to meet delivery schedules. Market dynamics indicate that year-end is typically a peak season for sales, while early in the year tends to be slower. The “safety net” tax policies aim to ensure smoother production schedules, preventing severe fluctuations in business operations due to concentrated orders and seasonal market factors.

Regarding the imminent reduction in new energy vehicle purchase taxes, industry voices have been active. Wang Qing from the State Council Development Research Center suggested at the 2025 Tianjin Taida Automotive Forum to stagger the withdrawal of vehicle purchase tax policies and replacement subsidies to avoid a market downturn during policy transitions. Additionally, the Vice Minister of Industry and Information Technology, Xiong Jijun, at the 2025 Hainan World New Energy Vehicle Conference, emphasized the importance of expanding market consumption and optimizing tax incentives in the automotive industry.