Chinese EV makers Nio Inc – ADR (NYSE:NIO), Li Auto Inc (NASDAQ:LI) and XPeng Inc – ADR (NYSE:XPEV) are all trading higher Tuesday morning after Beijing confirmed it will roll its vehicle trade-in stimulus into 2026, easing worries about a policy cliff for auto demand. Here’s what investors need to know.
- NIO shares are powering higher. Why is NIO stock surging?
What To Know: The National Development and Reform Commission and Ministry of Finance issued a new joint notice that keeps this year’s subsidy caps, but shifts from fixed payments to rebates calculated as a share of the vehicle’s price, according to CnEVPost.
Under the updated framework, consumers who scrap older cars and buy new energy vehicles (NEVs) can receive support worth roughly low-double-digit percentages of the purchase price, with slightly smaller rates for qualifying gasoline cars with engines of 2.0 liters or below.
Trade-ins without scrappage receive somewhat lower percentages, again with NEVs favored over internal-combustion models. Beijing has earmarked about 62.5 billion yuan ($8.92 billion) in ultra-long-term government bond proceeds to fund replacement programs across autos, appliances and digital products, CnEVPost reported.
The extension is especially important after many local governments ran out of subsidy money in the fall, prompting widespread program suspensions and denting sales.
Industry data cited by CnEVPost showed that the halt fueled “wait-and-see” behavior among buyers, and Nio management previously warned that lost trade-in support had weighed on demand for its mass-market Onvo brand.
Tuesday’s gains add to momentum from last week, when the aforementioned stocks jumped amid a forthcoming national energy-consumption standard that effectively bans inefficient EVs from 2026 and appears to favor XPeng and Nio’s relatively frugal models.
Benzinga Edge Rankings: Benzinga Edge data shows Nio carries a strong Momentum score of 87.25, with a positive long-term price trend despite weaker short- and medium-term signals.
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Price Action:
- Nio shares were up 5.71% at $5.53 at the time of publication on Tuesday, according to Benzinga Pro data.
- Li Auto shares were up 1.25% at $17.16.
- XPeng shares were up 6.17% at $21.76.
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