The Henan Automobile Industry Association has announced a cash subsidy of 3,000 yuan (approximately US$410) for buyers of EVs equipped with Huawei’s car system and intelligent chassis.

A representative confirmed that this is a limited-time program. This subsidy program will be available from July 1 to July 31, 2025, for EVs priced at 200,000 yuan (around US$27,500) or higher.

The total budget for this initiative is 6 million yuan (approximately US$822,000), covering up to 2,000 vehicles on a first-come, first-served basis, according to the association.

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🔗 Source: iFanr

🧠 Food for thought

1️⃣ China’s evolving NEV subsidy approach: from national to regional

The Henan province initiative reflects China’s strategic shift from broad national subsidies to targeted regional programs after years of massive central investment.

Between 2009-2017, China invested over 390 billion yuan ($58.3 billion) in NEV development, with 245 billion yuan dedicated specifically to buyer subsidies 1.

This heavy central government support was planned to be phased out by 2020, with subsidies reduced by 20% in 2018 and local subsidies capped at 50% of central grants to encourage market competition 2.

The latest national action in July 2024 doubled cash subsidies to 20,000 yuan ($2,770) per vehicle to stimulate consumer spending amid economic challenges 3.

Henan’s targeted 3,000 yuan subsidy for specific technology-equipped vehicles demonstrates how regional governments are now implementing focused incentives aligned with both local economic goals and national industrial policy priorities.

This approach enables more sustainable and strategic government support compared to the earlier broad subsidies that created concerns about market dependency and industry overcapacity.

2️⃣ Strategic promotion of domestic technology ecosystems

Henan’s subsidy specifically targeting vehicles with Huawei’s HarmonyOS and Turing chassis reveals China’s strategy of using incentives to build complete domestic technology ecosystems.

This approach aligns with China’s “Made in China 2025” initiative, which aims for indigenous NEVs to dominate the domestic market through policies that support local innovation and reduce dependence on foreign technology 4.

The Chinese government has invested an estimated $230.9 billion in the EV sector from 2009 to 2023 through various mechanisms including buyer rebates, tax exemptions, and infrastructure funding 5.

These technology-specific subsidies help address concerns about market sustainability, as many Chinese EV producers continue to struggle with profitability despite substantial government backing 5.

By promoting specific Chinese operating systems and chassis technology, the Henan program illustrates how regional incentives are being used to strengthen technological self-sufficiency in strategic industries beyond just boosting vehicle sales numbers.

3️⃣ NEVs as economic bright spots during challenging times

The Henan subsidy program reflects the importance of NEVs as economic growth drivers amid broader market challenges.

Despite an overall 15% drop in China’s car market in 2019, NEV sales showed remarkable resilience until subsidy cuts were implemented 6.

The first four months of 2025 saw over 4.3 million NEVs sold in China, representing a 46.2% year-on-year increase and accounting for 42.7% of total new vehicle sales 7.

NEVs have been consistently highlighted as “a bright spot in China’s economy since 2020,” demonstrating their strategic importance beyond environmental goals 3.

With China accounting for more than 11 million of the 17 million electric cars sold globally in 2024, regional initiatives like Henan’s help maintain this momentum by targeting higher-priced vehicles (200,000+ yuan) that generate greater economic activity 7.

The program’s timing (through July 2025) and limited scope (2,000 vehicles) suggest a calibrated approach to stimulating specific market segments while avoiding the sustainability issues that affected earlier, broader subsidy programs.

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