China’s EV Trade-In Program Faces Suspension in Several Regions Amid Funding Shortages

Beijing, June 18 – China’s electric vehicle (EV) trade-in subsidy program has been temporarily suspended in several regions as local governments report that allocated funds are running low, according to sources familiar with the matter. The trade-in scheme, introduced earlier this year to boost domestic consumption and accelerate the transition to cleaner transportation, offered cash incentives for consumers who scrapped older vehicles in exchange for new energy vehicles (NEVs). However, high demand has reportedly outpaced the available budget in certain provinces, prompting authorities to pause the program while awaiting further central government funding or adjustments to the subsidy mechanism. This development may impact short-term sales momentum for domestic automakers, particularly in the EV segment, which has been a critical growth driver for China’s auto industry. Industry analysts suggest that while the temporary halt is a logistical issue rather than a policy reversal, it reflects the broader challenge of maintaining large-scale stimulus programs amid fiscal constraints. China remains the world’s largest EV market, and policymakers are expected to recalibrate funding to ensure continued support for clean vehicle adoption.

ECONOMICS