BEIJING - China will give a one-time subsidy of up to 10,000 yuan (US$1,380 or 50,000 baht) to consumers who trade in old cars and buy newer models in a move to stimulate the auto industry and the economy.
Drivers who trade in electric vehicles (EVs) or hybrids registered before 2018, or petrol-engine cars that don’t meet 2007 emissions standards, and purchase a new qualifying vehicle will get 10,000 yuan, the Ministry of Commerce said on Friday. Customers who trade in newer vehicles will receive 7,000 yuan, it said.
The programme, which will run until the end of 2024, is part of Beijing’s latest effort to boost consumption to accelerate economic growth that has been hurt by a property crisis and weak consumer sentiment.
Cars are just one pillar of the sweeping programme, which aims to upgrade everything from equipment for heavy industry to household white goods.
Provincial and municipal governments will handle the organisation and disbursement of subsidies, said the ministry. However, it warned authorities not to set up “white lists” that give preference to factors such as location and technical specifications.
The central government will contribute 60% of the auto trade-in subsidies while local governments will contribute the remaining 40%, with the ratios varying across regions. The ministry did not disclose the total budget for the subsidy programmes.
Electric vehicle executives at a top car show in Beijing this week said they were bullish on prospects for growth, despite a gruelling price war and mounting Western pressure on the industry.
The European Union (EU) launched an investigation last year into Chinese state EV subsidies, which it said had given companies from the country an “unfair” leg up in the local market.
And Brussels — along with allies in Washington — has raised fears that Chinese industrial “overcapacity” created by excessive state subsidies could result in global markets flooded with cheap Chinese EVs.
“We certainly hope that there won’t be an introduction of tariffs. I think it is not good for consumers,” said William Li, the CEO of Nio, one of China’s largest EV makers.