Core Points - Jiangsu Province announced the suspension of the vehicle replacement subsidy policy effective from September 28, 2025, marking a shift from broad-based consumer incentives to more targeted regulatory measures [2][3] - The new model for scrapping subsidies will require consumers to first obtain qualification before applying for subsidies, effective from September 29, 2025 [3][6] - The rapid consumption of subsidy funds in Jiangsu, exceeding 100 billion yuan in the first half of the year, necessitated this policy adjustment to prevent fiscal risks [6] Summary by Sections Policy Changes - The vehicle replacement subsidy will officially cease on September 28, 2025, with a deadline for consumers who purchased vehicles before this date to submit their applications by October 20, 2025 [3] - The scrapping subsidy will now follow a "qualify first, then apply" model starting September 29, 2025, while previous purchasers can still apply under the old rules [3][4] Market Reactions - The announcement led to a surge in consumer purchases, with dealerships experiencing a significant increase in sales as consumers rushed to take advantage of the subsidies before they ended [5][6] - In various cities, dealerships implemented marketing strategies to encourage last-minute purchases, highlighting the financial impact of the subsidy cessation on price-sensitive consumers [5] Industry Trends - The automotive market is transitioning from a policy-driven model to a market-driven one, with increasing internal growth dynamics as evidenced by a 59.8% retail penetration rate for new energy vehicles in early September [6][8] - The upcoming end of the full exemption from vehicle purchase tax for new energy vehicles in 2025 is prompting manufacturers to accelerate new model launches during the traditional sales peak in September and October [6][8] Local Government Initiatives - Local governments are responding to the national subsidy cuts with targeted measures, such as Lanzhou's expanded subsidy program and Zhengzhou's substantial 560 million yuan green vehicle subsidy [7][8] - The focus is shifting towards environmentally friendly vehicles and the scrapping of older, high-emission vehicles, indicating a move from broad subsidies to more precise financial support [8]

Group 1 - The automotive market is experiencing a surge in new vehicle launches, with nearly 40 new models expected in September 2023, compared to 17 in the same month of 2024, indicating a significant increase in activity [1] - September 17 alone saw the launch of five new electric vehicle models, including the 2025 Mercedes-Benz EQS and the new Chery Fengyun X3L, highlighting the trend towards electric vehicles [1] - The Chinese government has been supporting the electric vehicle industry by exempting vehicle purchase tax since 2014, with 2023 being the last year for full exemption, and a gradual reduction in tax for 2026 and 2027 [1] Group 2 - Automakers are under pressure to meet annual sales targets, with Geely and BYD leading in completion rates at 63% and 62% respectively, while others like BAIC are struggling at 36% [2] - New energy vehicle brands such as XPeng and Li Auto have shown higher completion rates, while brands like NIO and Zeekr face significant sales challenges with rates below 40% [2] - In response to market pressures, several automakers have introduced promotional strategies, including Tesla's price cuts and financing offers, to stimulate sales [2] Group 3 - Over 20 provinces and cities in China have launched regional purchase subsidies in September, creating a layered subsidy effect to encourage vehicle purchases [3] - For example, Guangxi province has initiated a vehicle purchase subsidy program with amounts ranging from 2,000 to 5,000 yuan, totaling 350 million yuan in subsidies [3] - Local governments are also offering additional incentives such as fuel vouchers and insurance coupons to further promote vehicle sales [3]