Li Auto’s local peer Nio recently announced a new limited-time 0-interest financing plan, following the expiration of China’s national trade-in subsidy in 2024. This move aims to prevent a sudden increase in the cost of purchasing a car from discouraging potential buyers.
Between January 1 and January 31, customers who purchase a Li Auto model through a trade-in of their old car and take delivery of it will receive a subsidy from the company equal to what they would have received in 2024. Additionally, if the government of the buyer’s city does not offer a trade-in subsidy by March 31, or if the buyer does not qualify for it, Li Auto will provide a cash subsidy of RMB 15,000.
The Chinese government initially introduced a trade-in subsidy on April 26, 2024, offering up to RMB 10,000 to consumers who purchase a new vehicle by scrapping their old one by December 31. This policy was later updated on July 25, increasing the subsidy for new energy vehicles (NEVs) to RMB 20,000 for the trade-in of old vehicles and to RMB 15,000 for fuel vehicles of 2.0 L and below.
Since then, local governments have implemented their own details based on this policy, which expired on December 31, 2024. The goal of this policy was to boost China’s auto consumption, with over 5.2 million cars sold under this subsidy by December 13.
Following Li Auto’s initiative, Nio also introduced similar measures for its main brand and Onvo sub-brand. Customers who complete their car purchases between January 1 and February 28 will receive credit points equal to the government trade-in subsidy if they are unable to qualify due to the invoice date. Nio also launched a limited-time 0 percent interest rate financing program for both brands.
These measures by Li Auto and Nio demonstrate their commitment to supporting customers in the changing landscape of subsidies and financing options. As the automotive industry continues to evolve, such initiatives will play a crucial role in attracting and retaining buyers.
