China just removed one of the biggest overhangs on its EV names: Beijing confirmed the new-energy-vehicle trade-in subsidies will run through 2026. NIO and XPeng popped nearly 6%, with Li Auto up about 1.3%.
| Metric | Value |
|---|---|
| NIO / XPeng move | ~+6% |
| Li Auto move | ~+1.3% |
| Scrap subsidy | 12% of price, up to 20,000 yuan |
| Trade-in subsidy | 8%, up to 15,000 yuan |
Why it moved
The National Development and Reform Commission and the Ministry of Finance jointly confirmed the trade-in program continues: scrap an old car for an eligible NEV and get 12% of the price back (up to 20,000 yuan, ~$2,850); trade one in for 8% (up to 15,000 yuan). That's a hard demand floor in the most competitive EV market on earth. A separate energy-consumption rule also rewards efficient designs — and NIO's ET5 and XPeng's G6/P7 already sit under the 2026 threshold, so the regulation reads as a tailwind, not a tax.
I'm Ruslan Averin, and what I respect here is that this is policy, not a single month's delivery beat. Delivery prints are noisy and easily gamed by channel stuffing; a 12-month national subsidy commitment resets the floor under volume across the entire sector at once. That's why the whole complex moved together rather than one name running on its own number.
What it means for you
The Chinese EV trade is a policy trade first and a fundamentals trade second. Subsidies cushion the brutal domestic price war but don't end it — gross margins still decide who actually survives, and the U.S.-listed ADRs carry their own regulatory and delisting overhang. Size positions for volatility, not for a clean straight-line re-rate.
Bottom line: A demand floor is worth more than a delivery headline — Beijing just bolted one under the whole sector through 2026.