Overview

• At least six regions, including Zhengzhou, Luoyang, Shenyang, Chongqing and Xinjiang, have paused subsidies due to exhausted allocations or capital-efficiency adjustments
• Over 4 million trade-in applications were submitted by May 31, with roughly 70 percent of passenger car purchases last month tapping the incentive
• Dealers exploited a loophole by registering new EVs and fuel-efficient cars as zero-mileage used vehicles to claim up to 20,000 yuan per trade-in
• China’s National Development and Reform Commission and Ministry of Finance have vowed to maintain the program through 2025, with fresh funds expected in the third quarter after tighter oversight
• A price war led by BYD and other automakers has squeezed industry margins, prompting firms like XPeng, Nio and Geely to commit to paying suppliers within 60 days