Li Auto's local peer Nio rolled out similar measures yesterday when it announced a limited-time 0-interest financing plan.
With the expiration of the China's national trade-in subsidy in 2024 and the new policy not yet available, more car companies are offering their own plans to prevent a sudden rise in the cost of purchasing a car from deterring potential buyers.
Between January 1 and January 31, customers who buy a Li Auto model through a trade-in of their old car and took delivery of it could receive a subsidy from the company in the same amount they would have been entitled to if they had purchased the car in 2024.
On or before March 31, if the government of the buyer's city doesn't offer a trade-in subsidy, or if the subsidy is offered but the buyer doesn't qualify, then Li Auto will offer a cash subsidy of RMB 15,000, according to a poster it shared on Weibo today.
If the government of the customer's city introduces a trade-in subsidy before the vehicle is delivered, then Li Auto will not offer those subsidies.
China released details of its trade-in subsidy on April 26, 2024, offering up to RMB 10,000 yuan ($1,370) to consumers who buy a new vehicle by scrapping their old one by December 31.
On July 25, the country updated the policy, raising the subsidy for the purchase of new energy vehicles (NEVs) from RMB 10,000 to RMB 20,000 for the trade-in of old vehicles, and from RMB 7,000 to RMB 15,000 for fuel vehicles of 2.0 L and below.
Since then, local governments have provided their own implementation details based on the policy, which had a December 31, 2024 expiration date.
The policy is seen as a key move to boost China's auto consumption in 2024. As of December 13, more than 5.2 million cars had been sold that took advantage of the trade-in subsidy, according to China's Ministry of Commerce.
Prior to Li Auto, Nio (NYSE: NIO) had already announced similar measures yesterday for its main brand and Onvo sub-brand.
Customers who complete their car purchases between January 1 and February 28 will be compensated with an equal amount of credit points by Nio if they are unable to receive the government trade-in subsidy because of the invoice date.
Nio also announced yesterday a limited-time 0 percent interest rate financing program for the main Nio brand and Onvo brand.
($1 = RMB 7.2994)
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