China’s provincial governments have moved quickly to implement the central government’s 2026 vehicle subsidy framework, rolling out a patchwork of trade‑in and scrappage incentives designed to prop up domestic auto sales. Since early February, more than five provinces including Hunan, Qinghai, Henan, Fujian and Jiangxi published detailed rules; by late February the measures covered the entire Chinese mainland, reflecting Beijing’s broader aim to stabilise consumption and accelerate fleet renewal.
Shenzhen’s scheme, issued at the end of February, is among the most generous and explicit. Households that scrap passenger cars registered to their names and buy new vehicles listed in the national new‑energy vehicle (NEV) purchase tax exemption catalogue will receive a subsidy equal to 12% of the purchase price (capped at RMB 20,000); purchasers of conventional petrol cars with engines up to 2.0 litres qualify for subsidies equal to 10% of price (capped at RMB 15,000). The measures are framed as both environmental policy and short‑term demand stimulus: encourage scrappage, accelerate the turnover to cleaner models and give automakers breathing room amid softer macro consumption.
Automakers released February delivery figures that show a mixed but instructive picture. New‑energy stalwarts and several younger players reported solid monthly volumes: Leapmotor delivered 28,067 vehicles, Li Auto 26,421, Zeekr 23,867 and NIO 20,797; Xiaomi’s auto unit reported deliveries exceeding 20,000 units and XPeng 15,256. Incumbent mass producers posted uneven results: Geely sold about 206,160 cars in February, BYD passenger vehicle deliveries were 187,782 (split roughly 79,539 pure battery electric and 108,243 plug‑in hybrids), while Chery and Great Wall reported declines versus year‑ago levels.
State and private conglomerates also showed differing export dynamics. SAIC’s consolidated vehicle sales reached roughly 269,500 units in February and nearly 596,900 units across January–February, with overseas and export bases growing almost 49% year‑on‑year for the period — an indication that Chinese makers are leaning more on foreign demand to offset domestic softness. BYD’s mix of BEV and PHEV volumes underlines the heterogeneity in consumer choice and firm strategies as the market digests the end of generous national subsidies from previous years.
The most eye‑catching non‑sales item was Xiaomi’s surprise entry into automotive halo products: at its Barcelona global launch the group unveiled the Xiaomi Vision Gran Turismo (Xiaomi Vision GT), the first Chinese‑designed VGT supercar concept invited to the Gran Turismo franchise and slated for a physical debut at MWC 2026. For Xiaomi, a halo supercar is less about near‑term margins than about branding — signalling ambition to challenge Western incumbents on product desirability and to tie automotive products into a broader consumer electronics ecosystem.
Technical and market signals arrived in parallel. Huawei‑linked HarmonyOS publisher released a Spring‑Festival period assisted‑driving report showing 373 million kilometres driven under assisted systems and millions of active collision‑avoidance interventions, reflecting fast adoption of advanced driver assistance systems (ADAS) in China’s NEV fleet. Meanwhile, Tesla raised the price of the dual‑motor Cybertruck to $69,990 in the United States, a reminder that pricing power and product positioning remain fluid even for global leaders.
Taken together, national subsidy implementation, automaker delivery data and tech firm product theatre sketch a Chinese auto sector in active transition. Policy is buying time for manufacturers and dealers; new entrants are scaling production and deliveries quickly; exports are becoming a more explicit pillar of growth; and tech companies are using high‑profile concepts to anchor future mobility ecosystems. The near‑term outlook depends on whether demand stimulus can offset consumers’ price sensitivity and whether firms can convert halo projects into durable, profitable businesses.