Beijing enhances consumer incentives to scrap older vehicles, boost sales of electrified models

The Chinese government, seeking to boost vehicle demand, has significantly raised subsidies under the scrappage program it rolled out for passenger vehicles in late April.

The subsidy will double to 20,000 yuan ($2,766) if consumers purchase new electrified cars and scrap fuel-powered cars with emissions standards that fall short of State 4 rules or electrified cars registered prior to April 30, 2018, the National Reform and Development Commission, China’s central economic agency, said on its website July 25. 

The subsidy increases to $2,074 from $968 if consumers choose to trade in fuel cars with engine sizes of 2.0 liters or below.

The latest subsidies took effect immediately, the government agency said.

China’s State 4 emission standards is on par with the Euro 4. 

Despite the scrappage program, which was adopted April 24, retail sales of new passenger vehicles, including sedans, crossovers, SUVs and multipurpose vehicles, contracted for the third straight month in June, dropping 6.7 percent year over year to below 1.77 million, according to the China Passenger Car Association.