The used car export sector is poised for a significant realignment.

As the subsidy programs for trading in old cars for new ones gradually phase out across different regions, the used car market is undergoing an adjustment phase marked by dual pressures on both supply and demand fronts.

Data from the China Automobile Dealers Association reveals that from November 10 to 16, 2025, the average daily transaction volume of used cars across the country reached 66,600 units, reflecting a slight 0.48% month-on-month decrease. Between November 1 and 16, the cumulative transaction volume stood at 850,000 units, a 7.3% drop compared to the same period in October, signaling a notable downturn in market activity.

"With the winding down of subsidy policies for trading in old vehicles for new ones, consumer demand for replacements has eased, leading to a short-term contraction in supply," noted an analyst.

Industry experts point out that the diminishing marginal impact of policies has directly contributed to a decrease in used car supply, exerting short-term pressure on transaction volumes. Concurrently, a cooling demand has intensified market volatility, propelling the market into a turbulent phase.

A representative from a used car trading platform remarked, "Recently, there's been a noticeable increase in consumer hesitation, with some regions witnessing a situation where there are cars but no takers." Data indicates that the average transaction price of used cars in the third week of November fell by 1.2% week-on-week, reflecting an expansion of bargaining space in the market.

Short-Term Fluctuations Do Not Alter Long-Term Positive Prospects Despite market pressures, industry experts remain optimistic about the long-term outlook for the used car market. "Policy adjustments represent short-term pain, but the 'essential demand' of the used car market remains intact," industry insiders analyze. With the accelerated adoption of new energy vehicles, the demand for used car replacements will continue to be unleashed, and the market is anticipated to embark on a new growth trajectory post-policy adjustments.

Overall Market Pressure and Residual Value Decline

As the automotive market enters a period of profound adjustment, the residual value rate of used cars, a critical metric for gauging the liquidity value of products, has emerged as a 'barometer' reflecting market health.

According to the 'China Automobile Residual Value Rate Report for October 2025' released by the China Automobile Dealers Association, the used car market faced overall pressure in October, with a general decline in residual value rates coexisting with structural disparities. The issue of low residual value rates for new energy vehicles was particularly pronounced.

The report highlights that in October, small cars ranked third among all vehicle categories with a residual value rate of 52.9%, trailing only MPVs and mid-to-large SUVs. The China Automobile Dealers Association attributes this to dealers engaging in concentrated price reductions and promotions during the Mid-Autumn Festival and National Day holidays to meet annual targets, resulting in short-term pressure on used car prices. Notably, the residual value rates of small SUVs (46.7%) and compact cars (47.2%) were at the bottom, with the gap between them and the highest-rated models narrowing to within 10%, underscoring overall market weakness.

"Under the long-term downward trend in prices, consumers' approach to assessing the value of used cars is undergoing a transformation," an expert from the China Automobile Dealers Association stated. In October, retail sales of luxury cars declined by 10% year-on-year and 23% month-on-month, with their market share dropping below 8.5%, significantly impacting the stability of residual value rates.

Among luxury brands, Porsche (67.2%) and Lexus (60.0%) retained their top positions in terms of residual value rates, while other brands generally experienced declines. Experts noted that luxury brands still possess stronger premium capabilities than domestic brands, but market pressures have already been transmitted to the residual value rate level.

For domestic brands, residual value rates generally decreased in October, with NIO ranking last with a residual value rate of 38.4%. Some brands have faced low recognition in the used car market due to sluggish transitions to new energy vehicles.

The residual value rates of new energy vehicles continued to be sluggish, with plug-in hybrid models at only 43.7% and pure electric models sliding to 42%, well below the residual value rates of over 50% for traditional fuel vehicles.

The China Automobile Dealers Association analyzed that the core reasons for the low residual value rates of new energy vehicles lie in the 'double blow' of rapid technological iteration and insufficient market awareness. Taking pure electric vehicles as an example, fierce competition in the new car market, especially the concentrated launch of next-generation models at the end of the year, has exerted pressure on used car prices.

On the other hand, as the market ownership of new energy vehicles surges, the lagging issue of the supporting service system has become increasingly prominent. Currently, although the number of charging piles for new energy vehicles nationwide has exceeded 10 million, issues such as the coverage of fast-charging networks and battery recycling systems remain unresolved, exacerbating concerns among used car buyers about long-term usage costs.

The industry generally believes that addressing the issue of low residual value rates for new energy vehicles requires concerted efforts in technology, services, and policies, including accelerating the research and development of core technologies such as solid-state batteries and ultra-fast charging technologies, reducing battery degradation rates, and enhancing the long-term usage value of vehicles. Simultaneously, improving battery recycling and used car inspection and certification systems, establishing transparent used car trading platforms, and enhancing consumer trust are crucial.

At the policy level, it is necessary to promote the normalization of subsidies for trading in old new energy vehicles for new ones, explore innovative solutions such as battery leasing and battery swapping models, and reduce user costs.

"The issue of residual value rates for new energy vehicles represents an inevitable challenge during the market transition phase and a necessary step for the industry to mature," industry insiders emphasized. With accelerated technological iteration and improved service systems, the residual value rates of new energy vehicles are expected to gradually recover, but this process necessitates the joint efforts of the entire industry chain.

"180-Day Red Line" Regulation

In recent years, the used car market has maintained a steady growth trajectory.

In the first half of 2025, the cumulative transaction volume of used cars nationwide reached 9.5701 million units, a year-on-year increase of 1.99%, with a cumulative transaction amount of 623.238 billion yuan. The ratio of used car to new car transaction volumes is gradually narrowing, continuously approaching international standards. The rapid development of new energy vehicles has also injected fresh vitality into the used car market, with the transaction scale of used new energy vehicles surpassing one million units for the first time in 2024.

However, amidst the prosperity of the used car market, several issues have also surfaced.

For instance, concealing vehicle conditions, exaggerated promotions, arbitrary pricing, irregular transactions, and 'zero-kilometer used cars' that have long operated in gray areas have disrupted the order of the used car trading market and infringed upon the legitimate rights and interests of consumers.

In response to the chaos in the used car export market, five departments, including the Ministry of Commerce, recently jointly issued the 'Announcement on Matters Related to Used Car Exports' (hereinafter referred to as the 'Notice'), with a provision known as the '180-day red line' causing a stir in the industry.

The new regulation stipulates that starting from January 1, 2026, for vehicles applied for export with a registration date less than 180 days, a 'After-sales Maintenance Service Confirmation' issued by the manufacturer must be provided; otherwise, an export license will not be issued.

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"This regulation directly addresses a critical issue in the current industry," an industry insider remarked.

Industry experts believe that the confirmation required by the new regulation from manufacturers must detail the export country, vehicle information, and after-sales service network information, which are precisely the 'hard thresholds' that ordinary used car dealers find challenging to obtain.

It is understood that previously, some used car dealers evaded supervision through the 'zero-kilometer used car' model (i.e., exporting shortly after registration), leading to a large number of vehicles without after-sales support in overseas markets and triggering consumer complaints. After the implementation of the new regulation, such 'quick-in, quick-out' business models will come to an end.

‌'Starting from 2026, the business of trading 'zero-kilometer used cars' will no longer be viable,' admitted a representative from a used car export enterprise, stating that the new regulation will compel companies to enhance their after-sales service systems and drive the industry to transition from 'price competition' to 'service competition.'

Data shows that in 2023, China's used car exports reached 587,000 units, a year-on-year increase of 62.3%, but some companies suffered damaged reputations in overseas markets due to a lack of after-sales support. The introduction of this new regulation aims to standardize market order and enhance the international competitiveness of China's used car exports.

‌The China Automobile Dealers Association stated that the 180-day red line represents a crucial step for used car exports to transition from 'wild growth' to 'standardized development.' By mandating manufacturer participation in after-sales support, it not only protects the rights and interests of overseas consumers but also drives the upgrading of China's used car brands towards high-end and service-oriented directions.

In addition to the core '180-day' clause, the 'Notice' also adopts a systematic approach that combines 'restriction and facilitation.' It further strengthens the standardized application and issuance of export licenses, requiring accurate and truthful information reporting, and will establish a dynamic management and exit mechanism for enterprises. The document also released a 'Negative List of Dishonest Behaviors in Used Car Exports,' listing seven types of violations, including providing false vehicle conditions and failing to conduct export business as required.

Notably, the 'Notice' imposes stricter requirements on the export of modified vehicles. It requires modified vehicle export enterprises to accurately fill in information such as the chassis brand and modified vehicle brand, and submit proof materials for the authenticity of the modifications. For products that cannot prove the authenticity of modifications, are not listed in the 'Announcement on Road Motor Vehicle Production Enterprises and Products' by the Ministry of Industry and Information Technology, or do not possess valid national mandatory product certification, export licenses will not be issued.

While strengthening supervision, the 'Notice' also provides guidance and support for the industry. It encourages enterprises to explore diversified markets, supports the establishment of public exhibition and trading centers in key overseas markets, guides export enterprises to jointly build stable after-sales service systems with automobile manufacturers and overseas importers, and explores the development of a 'one-stop' service market for used car exports that integrates inspection, preparation, customs declaration, and logistics.

Obviously, with the implementation of the new regulation, the used car export industry is poised for a significant realignment. Enterprises relying on short-term arbitrage may be eliminated, while those with comprehensive after-sales systems and a focus on brand building will have greater room for development, marking the quiet arrival of a 'quality era' for China's used car exports.

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