Old Vehicle Scrappage and Replacement Subsidy

The old vehicle scrappage and replacement subsidy is a government fiscal incentive designed to phase out high-emission end-of-life vehicles and drive automotive market upgrades. In 2026, this subsidy was integrated into the national automotive trade-in framework, governed by the "Detailed Implementation Rules for Automotive Trade-in Subsidies in 2026" jointly gazetted by eight ministries, including the Ministry of Commerce.

Subsidy Entitlements

The 2026 scrappage and replacement scheme adopts a percentage-based calculation tied to the new vehicle's retail price, moving away from the previous fixed-quantum subsidy model.

Scrapped Vehicle Category	New Vehicle Category	Subsidy Rate	Maximum Subsidy
Eligible old vehicle	New Energy passenger car	12% of new vehicle price	RM20,000
Eligible ICE vehicle	ICE passenger car (2.0L and below)	10% of new vehicle price	RM15,000

The new vehicle purchase price is based on the gross total inclusive of tax stated on the official "Unified Motor Vehicle Sales Invoice", with the final payout rounded up to the nearest whole integer. Notably, scrapping a New Energy passenger car to purchase a conventional internal combustion engine (ICE) passenger car is not eligible for any subsidy.

Eligible Old Vehicle Criteria

To qualify for scrappage and replacement, existing vehicles must meet one of the following initial registration cutoff dates:

Petrol passenger cars: Registered before 30 June 2013
Diesel and other fuel passenger cars: Registered before 30 June 2015
New Energy passenger cars: Registered before 31 December 2019

The old vehicle must be registered under the applicant’s name prior to 8 January 2025. The subsidy is strictly open to individual private buyers, excluding corporate fleet vehicles and commercial vehicles.

Application Procedure

Subsidy applications must be submitted via official digital platforms:

Mobile Channels: Search for the "Automotive Trade-In" mini-programme via WeChat, Alipay, Douyin, or UnionPay apps
Web Portal: Log in via the "National Automobile Circulation Information Management System" portal (https://qclt.mofcom.gov.cn)

Required documents include: Applicant’s identity card, bank account details, "Scrapped Motor Vehicle Recycling Certificate", "Motor Vehicle Deregistration Certificate", as well as the new vehicle’s "Unified Motor Vehicle Sales Invoice" and "Motor Vehicle Registration Certificate".

All supporting certificates must be issued on or after 1 January 2026. Upon successful verification, subsidy disbursements will typically be credited within 30 working days.

Key Restrictions

Each individual consumer is entitled to claim the scrappage-and-replacement or trade-in subsidy only once per calendar year
There is no mandatory sequence between scrapping the old vehicle and purchasing the new vehicle, provided all documentation is dated within the official policy period
The new vehicle's "Unified Motor Vehicle Sales Invoice" and "Motor Vehicle Registration Certificate" must be issued within the same provincial administrative region

Commercial Vehicle Scrappage and Fleet Renewal

In 2026, the Ministry of Transport earmarked RM22,000,000,000 in ultra-long-term special government bonds to subsidise the scrappage and renewal of ageing commercial lorries, prioritising the transition to New Energy heavy-duty commercial trucks. Concurrently, plans are set to construct over 3,000 EV charging and battery-swapping stations for heavy-duty electric trucks to build out a robust commercial charging ecosystem.