China has allocated hundreds of millions of dollars for automobile trade-ins in 2024, according to media reports on Monday, in another major step to boost auto consumption, with sales of electric vehicles (EVs) expected to receive a major boost.

The move is the latest of a slew of measures taken by Chinese policymakers to spur consumption of big-ticket items, including cars. The measures come as the US and the EU have taken protectionist actions aimed at containing the rapid rise of China’s EV industry based on claims of “overcapacity” in the Chinese market.

The Ministry of Finance has in recent days issued a total of 6.44 billion yuan ($889.02 million), which will be used for central subsidy funds for automobile trade-ins in 2024, China Media Group reported on Monday.

While the report did not specify which types of auto trade-ins the fund will benefit, the EV industry is widely expected to benefit the most, given the rapidly growing share of EVs in new auto purchases in China.

The latest move followed a series of recent policy measures to boost EV consumption. China's local governments at various levels have rolled out multiple incentive policies to promote large-scale automobile trade-ins recently. Last week, Hangzhou, the capital of East China's Zhejiang Province, unveiled an action plan to boost consumption via automobile trade-ins. The plan set an ambitious target of exchanging 80,000 vehicles by 2027, which will help to achieve new-energy vehicle penetration of over 50 percent.

In addition to fiscal support for auto trade-ins, China has also taken various other measures to boost the consumption of EVs. Also last week, the State Council issued a de-carbonization action plan, which said that China will gradually lift restrictions on the purchase of new-energy vehicles in various regions. Such a move, especially in major cities that have a long waiting list for new car purchases, will unleash significant demand.

The moves come as Chinese EV sales remain robust. According to the latest data, many Chinese EV companies reported impressive sales figures for May. Chinese EV firm NIO saw the biggest sales growth for the month, with sales jumping 233.8 percent year-on-year to 20,544 units. Li Auto’s sales surged by 23.8 percent year-on-year to 35,020 units, while BYD, the world’s biggest EV maker by sales, sold about 331,800 units in May, compared to 240,200 units in May 2023, according to media reports.