China auto industry seeks subsidy extension as EV exports take hit

China’s biggest industry group for automobile makers urged the government to extend concessions for trading in older vehicles, as part of measures to spur domestic car sales amid a drop in electric vehicle exports.

The vehicle trade-in policy, which offered a subsidy payment as high as 20,000 yuan ($2,752.3), was credited for record-high auto production and sales in November, with many consumers rushing to buy cars before the policy ends this month, according to the China Association of Automobile Manufacturers. While the Ministry of Commerce is studying a similar program for next year, it’s not clear yet whether it would be extended, said Chen Shihua, an official for the industry lobby, at a briefing Wednesday.

“We continue to call for the relevant consumption stimulus policy to be extended next year," Chen said while adding that an early decision would help avoid demand fluctuations in the car market.

The industry group’s demand comes as EV exports have been hit hard by growing trade tensions with key trading partners including the European Union. Exports were relatively flat last month, with gasoline cars making up more than 80% of the shipments, whereas EV exports dropped 29%.

At the same time, China’s domestic auto wholesales rose 11.7% to a record 3.3 million units last month, with new energy vehicles — comprising EVs and hybrids — surging 47.4% to 1.5 million cars, according to data from the association.

“The international situation is very unstable, and we’ve found the policies of different countries are changing a lot," Chen said. “These are all impacting the development of new markets."

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