BOC International released a research report noting that the State Council, in conjunction with several ministries, recently issued the "Notice on Subsidy Policies for Large-Scale Equipment Upgrades and Consumer Goods Trade-Ins in 2026," which extends incentive measures for automobiles, home appliances, and digital products while enhancing policy effectiveness through targeted optimizations.The firm believes that although the fiscal budget for subsidies has decreased as expected, the new policy clearly favors the mid-to-high-end market, and the reduction in subsidies for corresponding vehicle models is far less than market concerns. Subsidies for digital products remain at 15% of the retail price, capped at 500 yuan, which is better than market expectations;subsidies for home appliances have been tightened, with eligibility narrowed to six core categories and limited to products meeting the highest energy efficiency standards, while the subsidy rate has been reduced from 20% to 15% of the purchase price. The bank notes that with the early release of detailed subsidy rules and the timely disbursement of funds, the automotive industry is expected to get off to a strong start in 2026.However, given that consumer wait-and-see sentiment in the fourth quarter led to high channel inventory levels at year-end, the first quarter of 2026 may enter a destocking phase. At the individual stock level, the bank believes that Li Auto, Xiaomi, NIO, Aito, and Zeekr will be minimally affected by the adjustments to the trade-in subsidies.