As November approaches, the pace of the reduction of the preferential policies for car purchase tax next year and the phased end of the "two new" policies is drawing nearer and nearer. To seize the policy window period, automakers, dealers and consumers have all taken active actions to further boost the current booming situation in the automotive market. In the short term, the rush to purchase and the "subsidy war" are unfolding fiercely. Before the adjustment of the purchase tax policy, consumers accelerated their car purchase decisions to avoid increased costs, resulting in a sales peak. Automakers have been launching measures such as subsidies as a safety net and time-limited offers. For instance, NIO and AsKUI have covered the purchase tax difference for users who lock in orders, while Li Auto has introduced a cross-year subsidy plan to secure orders.

 

In the medium and long term, the trend of market differentiation and structural adjustment is obvious. The reduction of purchase tax has led to a decline in the cost performance of mid-to-low-end models, and the market in this range is facing the pressure of shrinking demand. The high-end market, relying on its technological advantages and brand premium, is less affected by policies. The policy tapering has forced automakers to return to rational competition, with technological strength, cost control and user experience becoming the core elements. Although there is a certain degree of price competition in the current industry, automakers are also actively expanding their export markets, diversifying risks through global layout, and seeking a sustainable development path.
Seize the policy window period

 

Recently, the number of customers visiting the experience stores of brands such as NIO, Ledao, Askui and Hongqi in Dongfang Xintiandi on East Chang 'an Avenue in Beijing has significantly increased. This phenomenon is a true reflection of the current terminal sales market of new energy vehicles. To seize the last two months of the window period of policies such as trade-in and purchase tax incentives, many consumers have advanced their car purchase plans in the hope of enjoying more policy benefits.

 

The purchase tax policy for new energy vehicles will be levied at 5% next year. My budget is 200,000 yuan, which means I will have to spend about 10,000 yuan more on the purchase tax. In addition, it is still uncertain whether the trade-in policy will continue next year. If you trade in your car now, you can still get a subsidy of 20,000 yuan for trade-in. Therefore, it is quite a good deal to buy a car now. A consumer in Beijing who is currently choosing a new car told the reporter that with the current combination of multiple policy benefits, purchasing a new energy vehicle can enjoy policy dividends of tens of thousands of yuan. This is also the main reason why many consumers choose to buy a car this year.

 

It is certain that the purchase tax preferential policies for new energy vehicles will be reduced next year, while it remains undetermined whether the preferential policies such as trade-in for new vehicles will continue next year. At present, when purchasing new energy vehicles, you can not only enjoy subsidies at the national level, but also receive additional subsidies from Jiulongpo District, Chongqing. Manufacturers also offer certain subsidies for some models. Now is the best time to buy a car. We are also stepping up the sales of popular models, hoping to seize the policy window period in the last two months of this year. A salesperson from a 4S store in Chongqing introduced to the reporter.

 

Some car dealers in certain provinces and cities have been promoting order transactions by creating an urgent atmosphere of a policy window period. The purchase tax rate for fuel vehicles is 10%, while new energy vehicles are exempted this year. This reduction policy will end by the end of the year. Next year, a 5% tax will be required for car purchase. Buying a car now can save tens of thousands of yuan. A car salesperson in Wuhan enthusiastically introduced the current car purchase preferential measures to the reporter. To encourage customers to purchase cars as soon as possible, some 4S stores, on the basis of the preferential policies at the national level, have also launched discounts at the manufacturer level, such as new car discounts, subsidies for trade-in from manufacturers, and promotions for non-popular configuration models, etc. They attract consumers by adding up preferential gift packages. "Even if the trade-in policy continues next year, the market may not experience such high growth as this year." " Xu Changming, a senior economist at the National Information Center, said that this year's policies such as trade-in have significantly promoted the growth of terminal sales. However, there is great uncertainty as to whether the effect of this year can be sustained next year. More consumers tend to enjoy more generous preferential policies this year and purchase cars in advance.

 

Data released by the China Automobile Dealers Association shows that in the first half of October, the number of car market visitors rose by 35.4% compared with the first half of September and by 12.3% compared with the second half of September. The order situation rose by 13% compared with the first half of September. The auto consumption index in September this year was 88.9, achieving growth compared with the previous month. Yang Hong, director of the Industry Coordination Working Committee of the China Automobile Dealers Association, introduced that the auto consumption index in September was higher than that of the previous month, indicating that auto sales in October will exceed those in September, achieving a month-on-month increase. Under the influence of the expiration of preferential policies such as trade-in and purchase tax for new energy vehicles, the auto market is showing a booming trend by the end of this year.

 

Car manufacturers "cover the shortfall"

 

On October 24th, Xiaomi Auto launched a cross-year purchase tax subsidy plan. On October 25th, Deep Blue Auto launched a "Cash Subsidy Plan for Purchase Tax for Cross-Year Delivery". On October 26th, Chery Automobile launched the "Peace of Mind Purchase" plan, providing purchase tax subsidies for some of its brands. On October 27th, Dongfeng Yipai launched the "Purchase Tax Subsidy Program". On October 28th, Changan Automobile launched a "Purchase Tax Subsidy Plan" across its entire brand.

 

By the end of October, car manufacturers had been rolling out purchase tax preferential "bottom-line" plans in a concentrated manner, making the market extremely hot. Almost every day, new enterprises (brands) released relevant purchase tax plans. In addition to the brands such as NIO, Li Auto and ZEEKR that have already launched "bottom-line" plans, many automakers have followed suit, providing consumers with a "bottom-line" guarantee to ensure that those who purchase a car before the end of November can enjoy the full purchase tax subsidy. This has become the main strategy for automakers to seize the window period of purchase tax.

 

Most of these plans are aimed at users who complete the order locking before November 30, 2025. In the plan, the car manufacturer stated that due to non-user reasons such as production and transportation, the actual invoicing time of vehicles is postponed to January 1, 2026 or later. The car manufacturer will fully subsidize the cost difference caused by the adjustment of the purchase tax policy to ensure that users do not bear additional purchase tax expenses due to invoicing across years. Some car manufacturers also stipulate that the maximum subsidy for a single vehicle shall not exceed 15,000 yuan.

 

Xiaomi's car has drawn particular attention in this round of purchase tax "bottom-line" plan. The key lies in the fact that the delivery cycles of several of its best-selling models are relatively long, which may prevent consumers from picking up their vehicles within the year. Therefore, it has no choice but to introduce a "bottom-line" plan to retain orders. Take the Xiaomi YU7 as an example. Since its launch at the end of June, it has been highly sought after. After deliveries began in July, the issue of the delivery cycle has troubled many customers who have locked in their orders. The Xiaomi Auto mini-program shows that the delivery cycle for the SU7 and YU7 series still lasts for 30 to 40 weeks. This means that customers who have locked in their orders currently cannot pick up their vehicles within the year, thus resulting in a difference in purchase tax. For this reason, Xiaomi's cross-year purchase tax subsidy plan proposes that orders be locked in by November 30, 2025. Due to the Xiaomi car issue, the vehicles need to be invoicing and delivered in 2026. The excess purchase tax difference will be subsidized through a reduction in the final purchase payment, with the maximum subsidy amount not exceeding 15,000 yuan. Excluding the SU7 Ultra, if the Xiaomi SU7/YU7 series is delivered in 2026, a subsidy of 11,000 to 14,000 yuan will be required for each vehicle. Based on Xiaomi's delivery volume of over 40,000 vehicles in September, it is expected that about 120,000 vehicles will be delivered by the end of the year. Meanwhile, the number of vehicles that were locked in order before November 30 but need to be delivered in 2026 is estimated to be as high as 200,000. According to this calculation, Xiaomi needs to invest 2 billion yuan to cover the difference in purchase tax. Other automakers, due to having fewer orders to be delivered, are not expected to invest such a huge amount of capital. However, overall, automakers still need to invest several billion yuan to "cover" the difference in purchase tax.

 

New models that have just been launched and are in the stage of ramping up production capacity are also the focus of this round of the "bottom-line" purchase tax guarantee plan by automakers. When the all-new ES8 was launched, NIO introduced a "bottom-line" purchase tax plan. The subsidy plans of Li Auto and ZEEKR were also targeted at the newly launched models. According to incomplete statistics, over 70 new car models were launched in the domestic auto market in September this year. Entering October, the pace of new car launches continued to accelerate. Many new models were launched in early October to catch up with the delivery in the fourth quarter. Most of these new models are out of stock and are currently in the stage of capacity expansion. Therefore, there will also be issues of purchase tax differences for pre-ordered customers. This leads to the phenomenon that most new models may involve locking orders this year but need to be picked up next year. Given the current development trend, perhaps more brands will have to consider the "safety net" plan for purchase tax. On October 30th, AvATR announced its cross-year purchase tax subsidy plan and extended the order locking period to December 31, 2025 (inclusive), fully ensuring that customers who lock in orders this year can enjoy full purchase tax subsidies.

 

Vehicle deliveries are under overall pressure

 

In Wuhan, the Golden Port and Yunfeng factories of Lanyu Auto are making every effort to increase production capacity, which has become the core task for many automakers at present. The digital, intelligent and connected production capacity of the Golden Mouth factory is rapidly taking effect. The continuous increase in daily production capacity is helping LEXue accelerate the delivery of new models. For newly launched models that are currently in the capacity ramp-up period, fully enhancing the production capacity of new vehicles and minimizing the delivery cycle as much as possible are key measures for automakers to seize the policy window period.

 

On October 28th, HarmonyOS Smart Mobility reached the milestone of delivering one million vehicles. Data shows that since its launch 21 months ago, the cumulative delivery volume of the ASKUI M9 has exceeded 250,000 units, setting a new delivery record for models in the 500,000-yuan price range. The steady growth in the delivery volume of the AsKUI series products is attributed to the continuous improvement of Seres' delivery capabilities. At present, Seres has three super factories and is capable of delivering one million vehicles annually. To expedite the delivery of orders within the year, Seres also requires its suppliers to enhance their supply capacity. It is learned that Seres recently sent a contact letter to the suppliers of the AsKUI M7 model, demanding that the entire supply chain increase its supply capacity to 1,200 vehicles per day by October 28. The wording was resolute: "Implement immediately and ensure it is achieved on schedule!" To seize the policy window period, automakers are actively collaborating with their supply chain partners to accelerate the delivery progress by the end of the year.

 

On October 14th, Li Xinyang, the person in charge of the product line of Li Auto, publicly introduced the recent delivery situation. He said that over the past week, the team has been fully committed to coordinating the supply chain, accelerating the production pace and advancing the vehicle delivery, and the current progress is going smoothly. In response to the issue of underestimating the inventory of components for four-wheel drive models in the early stage, which led to a lag in their supply and production progress compared to two-wheel drive models and thus affected the delivery cycle of four-wheel drive models, Li Auto has taken multiple measures to increase production capacity and plans to complete the delivery catch-up by the end of October to ensure that previous orders are fulfilled on schedule. Li Xinyang promised that for all users who complete the order lock before October 26th and whose order system shows a delivery cycle of 1 to 5 weeks, regardless of whether they choose the two-wheel drive or four-wheel drive version, their vehicles will be produced within October. Considering the different logistics transportation times in various regions across the country, the vast majority of users are expected to pick up their vehicles smoothly within the same month. For many new carmakers like Li Auto, enhancing the delivery capacity of new models is the top priority to seize the policy window period.

 

As major new energy vehicle manufacturers are all increasing their production capacity, the problem of tight supply of power batteries has once again come to the fore, which to a large extent has intensified the delivery pressure of new energy vehicles. "Power batteries are in short supply again." " A purchasing executive from an automaker said that as automakers increase their production capacity, the demand for power batteries naturally rises, especially battery enterprises like CATL, which have become suppliers that automakers are competing to cooperate with. Against the backdrop of tight supply, even some car manufacturers have moved their offices near battery factories to obtain batteries. They carry their official seals and are on standby 24 hours a day to be able to pick up the goods as soon as possible. The phenomenon of "high-level socializing" has also emerged again. Some automakers communicate with battery enterprises through their senior leaders, hoping to increase battery supply in this way.

 

It is worth noting that while production capacity determines delivery capacity, the transportation issue of new vehicles has also become an important factor restricting the delivery capacity of automakers. In the "bottom-line" purchase tax plans of many car manufacturers, transportation issues are also taken into consideration. Recently, the overloading control of car carriers has been tightened, which has directly led to the obstruction of our new car logistics transportation. In September alone, one or two thousand new vehicles failed to be delivered on time due to transportation issues. A person in charge of a domestic brand said that while production capacity is ramping up, the delivery capabilities of car manufacturers are under comprehensive pressure.

 

At the end of July, the Ministry of Transport, the Ministry of Public Security, and the Ministry of Industry and Information Technology jointly issued the "Special Governance Action Plan for Vehicle Transporters" (hereinafter referred to as the "Action Plan"), announcing that from July 2025 to the end of December 2025, they will jointly carry out a special governance action for vehicle transporters. The Action Plan has specifically designed stricter control measures, addressing overloading from the source, conducting high-pressure investigations, and severely cracking down on violations such as overloading of car carriers. Car carriers have always been a key focus in overloading control. Due to factors such as low freight rates and heavy tasks of transporting new vehicles, overloading is widespread. Under the high pressure of the overloading control policy, the logistics and transportation of new vehicles have encountered "congestion", with the transportation cycle being prolonged. This has led to some new vehicles being unable to arrive at the terminal delivery site as scheduled, thereby prolonging the delivery cycle. Automakers have no choice but to readjust their transportation strategies for car carriers, and many enterprises are also accelerating the improvement of the logistics and transportation capacity of new vehicles to shorten the delivery cycle.

 

Full market competition has begun

 

For a long time, the critical point of policy tapering, seizing the window period and early consumption have constituted the sales rules of the new energy vehicle market. In the past, many key time points occurred at the end of the year, which is also an important cause of the "tail-end" phenomenon of new energy vehicle sales in China at the end of the year. According to the current development trend, the "tail-end" phenomenon of new energy vehicle sales may become more obvious by the end of this year.

 

With the superimposition of multiple preferential policies, automakers are accelerating the launch and promotion of new products. Driven by a series of favorable factors, the sales of new energy vehicles are expected to increase further this year. Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, predicts that the growth of new energy vehicles this year will exceed expectations. All parties predict that the sales of new energy vehicles will exceed 16 million this year, and the penetration rate of new vehicles may reach 55% or even higher.

 

However, although the expiration of policies and early consumption have significantly boosted current sales, they cannot avoid putting pressure on the auto market in the coming year due to overdrawn sales. Xu Changming judged that even if policies such as "trade-in for new" continue next year, it will be difficult to exert such a strong driving effect as this year. According to the current development trend, the growth of new energy vehicles is highly likely to slow down next year, especially at the beginning of the year, when there may be a significant month-on-month decline in sales. This is also the reason why Zhu Huarong, the Party Secretary and Chairman of Changan Automobile Group Co., LTD., suggested that the purchase tax for new energy vehicles be postponed until March next year and the collection be increased in a gradient manner on a monthly basis.

 

It should be noted that various preferential policies are gradually being phased out, and "equal rights for oil and electricity" will become the future development trend of the automotive industry. This is a problem that all parties must face up to. In the future development process, new energy vehicles need to participate in fully market-oriented market competition under the same competitive environment. Automakers need to constantly improve the quality of their products and services in order to better expand the market.

 

After years of rapid growth and the gradual phasing out of a series of preferential policies, the slowdown in the growth rate of new energy vehicles is an inevitable trend, which is also a result of market laws. When the penetration rate of new energy vehicles reaches a certain proportion, a slowdown in growth is inevitable.

 

Wang Qing, deputy director of the Institute of Market Economy at the Development Research Center of The State Council, said that after the penetration rate of new energy vehicles exceeds 50%, the growth rate will decline, which is a problem that all parties must face up to. After the growth dividend slows down, it is necessary to properly handle issues such as benefits and efficiency brought about by the slowdown in growth rate. Han Zhiyu, a professor from the School of Automotive Studies at Tongji University, predicts that in the future, fuel, hybrid and pure electric models are likely to form a tripartite market. Under the diversified market pattern, all parties need to continuously enhance their technological and product competitiveness in niche markets based on their own advantages, and promote the high-quality development of the automotive market.

 

Originally published on China Automotive News Network on November 4, 2025