China's automobile trade-ins spur business volume of recycling enterprises

Trucks loaded with scrapped vehicles pulled into a dismantling workshop of China Recycling Luoyang Renewable Resources Development Co., Ltd. in Luoyang, central China's Henan province. Inside the workshop, scrapped vehicles would be completely repurposed.

Old vehicles are about to be scrapped in a dismantling enterprise in Tongling, east China's Anhui province, Aug. 3, 2024. (People's Daily Online/Guo Shining)

In the bustling workshop, machines operated at full capacity, accompanied by the rhythmic clanking of tools. Components such as doors, wheels, batteries, and engines were meticulously disassembled, sorted, and sent to different destinations: steel materials were crushed and delivered to steel mills for reuse; old tires were recycled by downstream companies to produce rubber granules; and engines in good condition were sent to factories for refurbishment in accordance with national standards.

"This year, favorable policies have encouraged many vehicle owners to scrap their old cars and purchase new ones. Once the required documents are prepared, they can claim subsidies," said Zheng Yinghui, deputy general manager of the Henan-based company.

The "favorable policies" Zheng referred to are China's recent initiatives to promote vehicle trade-ins. These policies include subsidies for consumers who replace their old vehicles with new ones through official scrapping and renewal programs.

Such measures have sparked enthusiasm for upgrading vehicles and have significantly increased the workload for dismantling enterprises like this one in Henan. According to Wang Gongxian, deputy manager of the scrapped vehicle division of China Recycling Luoyang Renewable Resources Development Co., Ltd., more than 10,000 scrapped vehicles had been acquired by the company as of early November, a nearly 70 percent increase compared to the same period last year.

At a deregistration inspection area for scrapped vehicles, Zhang Yaoshen drove his old car onto a weighbridge, where the vehicle's residual value was calculated based on its weight. For most old vehicles, owners receive around 2,000 yuan ($276.48) per ton.

A scrapped vehicle is dismantled in a workshop of a recycling enterprise in Liaocheng, east China's Shandong province, Sept. 25, 2024. (People's Daily Online/Ma Hongkun)

"My car has been running for over a decade, and the fuel consumption has become increasingly high. I've been wanting to switch to a new energy vehicle (NEV). The current trade-in subsidies are a great deal, saving me about 20,000 yuan," Zhang said.

In about half an hour, the deregistration procedures were completed, and his old car joined others heading for the dismantling workshop.

Many car owners, like Zhang, are taking advantage of the policies to replace outdated fuel vehicles with newer, more efficient options. Whether it's an old fuel vehicle with declining performance or an early-generation new energy vehicle with limited range, these policies are driving a wave of vehicle upgrades across the country.

The vehicle trade-ins are injecting new energy into automobile consumption. By Nov. 18, over 4 million subsidy applications for vehicle scrappage and replacement had been submitted nationwide. In the first ten months of this year, China's automobile production and sales both surpassed 24 million units, maintaining growth on an already high base.

Encouraged by subsidies, many people have opted for low-carbon, environmentally friendly alternatives. From January to October this year, the production and sales of NEVs in China grew by 33 percent and 33.9 percent year on year, respectively, with nearly 40 percent of new car sales being NEVs. This reflects a growing embrace of green consumption across the country.

A woman inquires about trade-in policies at a dealership in Nanchang, east China's Jiangxi province, Oct. 23, 2024. (People's Daily Online/Bao Gansheng)

The trade-in program has also opened new opportunities for the recycling industry. From January to October, 5.846 million scrapped vehicles were recycled nationwide, a year-on-year increase of 55.9 percent. In October alone, the number of recycled vehicles reached 879,000, up 113.4 percent from a year ago.

Recycling enterprises across China are accelerating technological innovation and enhancing production efficiency. For example, companies are adopting tiered utilization methods for used power batteries to maximize their lifecycle. In response to the increasing scrappage of city buses, diesel trucks, and agricultural machinery, businesses are expanding their operations to improve the speed and efficiency of recycling and reuse.

"Next, we will enhance the speed and efficiency of vehicle dismantling, expand the circular economy, and achieve green, low-carbon development," said Zheng.

At the same time, relevant authorities are working to regulate the market and improve services. To make the process more convenient and reassuring for car owners, the government regularly publishes information about licensed vehicle recycling and dismantling companies. Efforts are also being made to improve the recycling network, optimize enterprise layout, and promote door-to-door vehicle collection services.

With the ongoing impact of trade-in policies, China's new car sales market and the automotive after-sales market are poised for even greater growth.