Shanghai raises subsidies in its new round of car replacement policy

Shanghai has released detailed implementation rules for car replacement in 2025, which offers more subsidies in one category starting this year to encourage car consumption.

The new policy, offering funds of up to 15,000 yuan (US$2,049), is effective immediately and is valid until March 31, 2026, the local government said on Wednesday via Shanghai Fabu, the official social media account of the government.

It aims to promote the purchase of new-energy vehicles (NEVs) and fuel-efficient cars, in line with national guidelines.

From January 1, 2025 to December 31, 2025, individuals who purchase new NEVs (including pure electric, plug-in hybrid, and extended-range hybrid vehicles) and transfer their old passenger cars registered in Shanghai can still receive a one-time subsidy of 15,000 yuan for the first time, the same as last year.

Similarly, the subsidy for those who buy new fuel-powered cars meeting the National VI-B emission standards and transfer their old National V or below standard vehicles will be raised to 13,000 yuan, compared with 12,000 yuan last year.

Each individual is eligible for only one subsidy per calendar year, and the same new car can't be used to claim both the scrap and replacement subsidies.

The old vehicle must have been registered under the consumer's name before January 8, 2025, and transferred between July 25, 2024, and December 31, 2025.

The new car must be purchased and registered between January 1, 2025, and January 10, 2026.

Applications for subsidies must be submitted by January 10, 2026, through designated platforms such as the "Shanghai Development and Reform" official WeChat account for NEVs and the "Shanghai Commerce" official WeChat account for fuel vehicles.

The subsidy funds will be jointly financed by national long-term special treasury bonds (85 percent) and the city's fiscal funds (15 percent).

This policy is part of Shanghai's efforts to encourage the adoption of environment-friendly vehicles and reduce emissions, contributing to the city's green development goals.