China's National Development and Reform Commission (NDRC) and the Ministry of Finance confirmed the extension of vehicle trade-in subsidies into 2026. This policy decision alleviates uncertainty regarding continued government support for auto demand in the upcoming year.
U.S.-listed shares of Chinese electric vehicle makers rallied on Tuesday following the announcement. Nio and XPeng both climbed nearly 6%. Li Auto saw a more moderate increase, edging up by about 1.3%.
The policy offers subsidies of up to 20,000 yuan for consumers. This incentive applies when consumers scrap older vehicles to purchase eligible new energy vehicles. The continued support aids the sector amid otherwise weak passenger vehicle sales.