China's consumer trade-in program (以旧换新) is one of the largest stimulus initiatives of 2024-2026, allocating hundreds of billions of RMB in subsidies to boost consumption and upgrade aging equipment. For foreign brands selling autos, electronics, and industrial equipment in China, this program creates significant demand opportunities.
Program Overview
The trade-in program has three main tracks:
- Consumer auto trade-in: Subsidies for scrapping old vehicles and purchasing new ones (especially NEVs).
- Home appliance & electronics trade-in: Subsidies for replacing old appliances with new energy-efficient models.
- Industrial equipment upgrade: Subsidies for enterprises replacing old machinery with energy-efficient equipment.
Total funding: ¥300+ billion RMB in central government allocations (2024-2026), with local governments adding matching funds.
Auto Trade-In Subsidies
| Scenario | Subsidy | Conditions |
|---|---|---|
| Scrap old ICE vehicle, buy new NEV | ¥20,000 | Old vehicle registered before specific date; new NEV must meet range/battery requirements |
| Scrap old ICE vehicle, buy new ICE (National VI) | ¥15,000 | Old vehicle must meet scrap age criteria |
| Local government top-ups | ¥5,000-¥10,000 additional | Varies by city (Shanghai, Shenzhen, Beijing often add extra) |
The auto trade-in program has been a major driver of NEV sales growth in 2025-2026, benefiting both domestic brands (BYD, NIO, Xpeng) and foreign brands (Tesla, BMW, Mercedes).
Home Appliance & Electronics Trade-In
Consumers can receive subsidies when trading in old appliances for new ones:
- Subsidy rate: 15-20% of the new product price
- Cap per item: ¥2,000 (most categories)
- Covered categories: Refrigerators, washing machines, TVs, air conditioners, computers, water heaters, cooktops
- Energy efficiency requirement: New products must meet minimum energy efficiency standards (usually Level 1 or 2)
Industrial Equipment Upgrade Subsidies
Separate from consumer subsidies, the government offers incentives for enterprises to upgrade old industrial equipment:
- Covered equipment: Machine tools, industrial boilers, motors, transformers, compressors
- Subsidy: 10-20% of equipment purchase price (varies by region and equipment type)
- Energy efficiency requirement: New equipment must meet current national energy efficiency standards
- Target: Replace equipment that is 10+ years old or below current efficiency standards
This creates opportunities for foreign equipment manufacturers (Siemens, ABB, Schneider, Mitsubishi) selling into China's manufacturing sector.
How Foreign Brands Can Benefit
- List on qualifying platforms: Ensure products are available on JD.com, Tmall, and authorized offline channels that participate in the trade-in program.
- Energy efficiency certification: Products must meet China's energy efficiency standards. Obtain certification from the China Standard Certification Center.
- Promote the subsidy: Highlight the trade-in subsidy in your marketing. Consumers often don't know they're eligible.
- Partner with recycling companies: The trade-in requires the old product to be collected and recycled. Partner with certified recycling companies for a smooth process.
- Monitor local programs: Each province/city may add additional subsidies. Track local commerce bureau announcements for regional top-ups.
2026 Policy Outlook
The trade-in program is expected to continue and expand in 2026-2027:
- Expanded categories (furniture, building materials, smart home devices may be added)
- Higher subsidy caps in lower-tier cities to boost rural consumption
- Integration with digital consumption vouchers
- Stronger focus on green/energy-efficient products
For foreign brands, this represents a multi-year demand stimulus. Companies that position their products as energy-efficient and participate in the trade-in ecosystem will see the strongest benefit.