Recently, the news that the "trade-in for new" policy in Wuhan was suspended for one day and then resumed has drawn attention. On August 17th, the Wuhan Municipal Bureau of Commerce issued the "Announcement on Adjusting the Wuhan 2025 Car Trade-in Policy", stating that the car replacement and renewal policy in Wuhan will be suspended from 24:00 on August 19th, 2025. On August 18th, a person from the Commerce Bureau of Hongshan District, Wuhan City, said, "The suspension notice issued on the 17th has been withdrawn. Currently, the province still continues the previous trade-in policy."

 

In fact, Guizhou, Hunan, Henan, Anhui, Qinghai... Within just two months, the subsidy policies for car replacement and renewal in many places across the country have been put on hold. However, the new policy relay is on the way, and the policy has shifted towards precise regulation. The support for auto consumption has entered the second half.

 

It was temporarily suspended in many places

 

In the past two months, car subsidies have been suspended in many places across the country. Since July, several cities in Anhui Province, including Hefei, Lu 'an, Wuhu, Huangshan and Chuzhou, have successively suspended the subsidy activities for car replacement and renewal. The application channels for car replacement and renewal subsidies in Changsha, Yueyang, Huaihua and Yongzhou of Hunan Province were closed at midnight on July 31. In August, many places including Henan, Hubei, Qinghai, Guizhou and Inner Mongolia also suspended subsidies for car replacement and renewal. Some cities, such as Hohhot, have even suspended the policy of scrapping and renewal.

 

The suspension and adjustment of this subsidy may seem sudden, but in fact, there were early signs. During the period from May to June this year, cities such as Chongqing, Xuchang, Huizhou and Shenyang had already closed their relevant channels. On June 22, Guizhou Province abolished the policy on second-hand car trade-in.

 

Behind the policy suspension lies a consumption boom that far exceeds expectations. The most direct factor is that the consumption rate of subsidy funds far exceeds expectations. This year, the Ministry of Finance has allocated 300 billion yuan of ultra-long-term special Treasury bonds to support the trade-in of consumer goods, including automobiles. As of May 31, the number of applications for car trade-in subsidies reached 4.12 million. In addition to subsidies for other consumer goods, the first two batches of 162 billion yuan allocated in January and April this year were rapidly exhausted.

 

During the process of applying for and distributing subsidies for trade-in, some market chaos has also emerged. Some merchants have defrauded subsidies through the means of "zero-kilometer used cars", spending a large amount of fiscal funds. This kind of behavior that disrupts market order has triggered strong regulatory measures. Chongqing and other places have launched special audits, focusing on rectifying loopholes in fund approval.

 

Of course, a pause does not mean an end. Guizhou explained the suspension as "technical upgrade and transformation of the platform system", while Chongqing, Guangxi and other places clearly marked it as "not terminated", which left room for the policy to resume. The National Development and Reform Commission and the Ministry of Finance have also responded, clearly stating that the unified deadline for the national subsidy policy in 2025 remains December 31. The current suspension in various regions is only a temporary adjustment. Subsequently, 138 billion yuan of central funds will be allocated in batches in the third and fourth quarters.

 

In addition, these suspensions mainly target subsidies for vehicle replacement and renewal, while the policy of vehicle scrapping and renewal is still being implemented in most regions.

 

The policy has shifted towards refined regulation

 

At the market level, data from the China Association of Automobile Manufacturers shows that both production and sales of automobiles in China exceeded 15 million units in the first half of this year. The China Association of Automobile Manufacturers pointed out that under the continuous effectiveness of the trade-in policy, the domestic demand market has significantly improved, playing an important supporting role in the overall growth of the automotive industry.

 

In addition, driven by the trade-in policy, the proportion of new car purchases and replacements in China's auto market has continued to rise, and the proportion of fuel vehicles replacing new energy vehicles is getting higher and higher. According to data from the Ministry of Commerce, in 2024, the proportion of trade-in for new energy vehicles in the auto trade-in program will exceed 60%, with over 6.6 million old vehicles being updated to new energy vehicles or energy-saving models.

 

The China Passenger Car Association also released a set of data earlier. In May this year, nearly 70% of private car buyers benefited from the trade-in program, while the number of first-time private car buyers dropped to around 30%. This is sufficient to prove the significance of subsidies for the growth of the automotive market. He Yi, the executive deputy secretary-general of the China Association of Automobile Manufacturers, also disclosed: "With the continuous optimization of the auto consumption structure, the proportion of new car purchases and replacements is expected to rise to over 65% by 2025." "

 

Nowadays, the subsidy policies for car replacement and renewal in places like Gansu, Guangxi and Chongqing have been restarted, generally adopting a "first come, first served" mechanism and planning the amount of funds. For instance, Chongqing has allocated an additional 300 million yuan in its budget for subsidies on vehicle replacement and renewal in the third quarter, adopting a "monthly allocation" mechanism, with 200 million yuan allocated in August and 100 million yuan in September.

 

Some regions have also adjusted the way subsidies are applied for. Gansu, Shaanxi, Hebei, Yunnan and other places have launched a limited-edition "coupon grabbing" model for car subsidies. Cities such as Handan and Xianyang have also adjusted their subsidy policies to "obtain the qualification first and then apply for the subsidy". Guangxi has allocated a daily subsidy quota of 4 million yuan for car replacement and renewal, which will be used up on a first-come, first-served basis. Ordos requires that subsidized vehicles must be registered locally to prevent cross-regional arbitrage. These refined regulations mean that policies have shifted from a "one-size-fits-all" approach to "categorized measures".

 

Cui Dongshu, secretary-general of the China Passenger Car Association, told China Automotive News, "Local governments are spending money too quickly. Switching to a 'coupon grabbing' model can control the pace, ensure stable use of funds and prevent excessive spending." The overall development pace should be controllable, avoiding being too fast, and advancing in a healthier and more stable manner. The development of an industry should not rely on subsidies but on its own growth.

 

It is worth noting that although the replacement subsidies in some regions have been put on hold, new favorable policies have already been introduced. On August 12th, the Ministry of Finance introduced a policy of interest subsidies for consumer loans. Starting from September, consumers can enjoy fiscal interest subsidies for consumer loans in areas such as automobiles, with a maximum support of 3,000 yuan per loan.

 

In addition, subsidies have been increased in some regions. Hubei Province has issued 100 million yuan worth of "Huigou Hubei" summer retail and catering consumption vouchers, including consumption vouchers for the auto aftermarket, covering maintenance expenses such as tires and engine oil. Xiaogan City has launched a special additional subsidy policy for the trade-in of old vehicles. For the scrapping and replacement of new energy vehicles, the maximum additional subsidies of 2,500 yuan and 3,000 yuan can be enjoyed respectively on top of the national subsidies.

 

In July this year, the Ministry of Finance allocated 69 billion yuan of the third batch of ultra-long-term special Treasury bonds. The remaining funds will be allocated in October. It can be seen that policy adjustments are merely a halftime break, and the second half of the support for auto consumption is now unfolding.

 

Originally published on China Automotive News Network on August 20, 2025