The inclusion of the old-for-new policy in the National IV heavy-duty truck standard in 2025 is expected to boost domestic demand in the industry.
On January 8, the National Development and Reform Commission and the Ministry of Finance jointly issued the "Notice on Further Expanding the Implementation of Large-Scale Equipment Replacement and Consumer Goods Trade-in Policies in 2025." This notice proposes expanding the scope of subsidies for scrapping and replacing older commercial trucks to include trucks meeting National IV emission standards and below, building on the implementation of the 2024 support policies. Subsidy standards will be implemented in accordance with the "Notice on Implementing the Scrapping and Replacement of Old Commercial Trucks" (Jiao Guihua Fa [2024] No. 90).
Compared to the 2024 national subsidy policy, this time, the scope of truck subsidies has been expanded to include vehicles meeting National IV emission standards, while the subsidy standards remain unchanged.
The truck trade-in policy, introduced in 2024, provides subsidies based on different levels for the early scrapping of diesel trucks operating under National III emission standards or below, the early scrapping and subsequent purchase of trucks meeting National VI emission standards or new energy trucks, and the purchase of only new energy trucks meeting the requirements. The maximum subsidy for early scrapping of an old National III diesel heavy-duty truck is 45,000 yuan, while the maximum subsidy for purchasing a new National VI truck is 65,000 yuan, and the maximum subsidy for purchasing a new energy heavy-duty truck is 95,000 yuan. This time, the scope of the scrapping subsidy for old trucks has been expanded to include National IV trucks, and the per-vehicle subsidy amount remains the same as last year's policy. According to the heavy-duty truck emission standard cycle, the concentrated sales period of National III heavy-duty trucks was from 2008 to 2010, and the concentrated sales period of National IV heavy-duty trucks was from 2013 to 2017. Currently, the number of National IV vehicles operating in the freight market is significantly higher than that of National III vehicles. Therefore, after the subsidy scope is expanded in 2025, the potential demand for replacing new vehicles is expected to double compared with last year, which will further boost the domestic demand elasticity of the heavy-duty truck industry.
The heavy-duty truck sector possesses certain pro-cyclical properties, and coupled with policy stimulus, the industry's sales elasticity will increase in 2025.
According to the China Association of Automobile Manufacturers, total heavy-duty truck sales in 2023 will reach 911,000 units, a year-on-year increase of 36%, indicating that the industry's fundamentals have emerged from a trough. According to the First Commercial Vehicle Network, industry sales in 2024 are expected to reach 900,000 units, nearly flat year-on-year. my country's current heavy-duty truck fleet has reached 8 million units. Based on a 10-year heavy-duty truck scrapping cycle, the industry's natural replacement sales volume is theoretically around 800,000 units per year. With policy stimulus, we estimate that wholesale heavy-duty truck sales in 2025 are expected to exceed 1 million units, a year-on-year growth rate of approximately 10%. This includes exports of 320,000 units, a year-on-year growth rate of 10%, and domestic sales of 680,000-700,000 units, a year-on-year growth rate of 13-15%.
The implementation of the old-for-new policy for heavy-duty trucks in 2025 is expected to effectively support domestic demand throughout the year. Coupled with the steady increase in demand in the export market, the certainty of an upward cycle in the heavy-duty truck sector will be further enhanced.
