BEIJING: The Chinese government has introduced a subsidy of up to 10,000 yuan ($1,380 or ₹ 1,15,096) for drivers who trade in their old cars for newer models, the commerce ministry announced on Saturday.
China, the largest automobile market globally and a fierce competitor in the electric vehicle sector, is witnessing a surge in domestic companies striving to pioneer the next generation of clean vehicles.
However, an economic downturn has dampened consumer spending, triggering a price war among manufacturers and impacting their profitability.
In an effort to stimulate demand, Beijing is extending the subsidy to drivers trading in electric or hybrid vehicles registered before 2018, or gasoline-powered cars failing to meet specific national emissions standards.
China’s ₹1.15 Lakh Offer for Trading Old Cars
Those replacing vehicles purchased after 2018 will receive a subsidy of 7,000 yuan ($960), as outlined by the commerce ministry in a recent statement. This measure, effective until year-end, applies to all new electric or hybrid vehicle purchases.
The timing coincides with the China Auto Show, where Chinese brands are outshining foreign manufacturers, many of whom are struggling with the transition to electric vehicles. Additionally, this decision comes amidst heightened scrutiny of Chinese automakers in several Western nations.
France, home to several iconic carmakers, has urged the European Commission to investigate Chinese state subsidies in the EV sector, potentially leading to customs surcharges to safeguard the European market.
Meanwhile, the United States, wary of production “overcapacity” and its impact on global competition, generally opposes such subsidies. Moreover, concerns about potential national security risks associated with Chinese vehicles have also been raised in Washington.
