CITIC Securities: The new car cycle is compounded by the halving of the vehicle purchase tax, with beta imminent.

The research report from CITIC Construction Investment indicates that recently, the third batch of subsidies for the "trade-in old for new" program has been gradually issued to local areas. The consumer sentiment in the passenger car sector is expected to improve, with the purchase tax on new energy vehicles being adjusted from full exemption to half reduction in 2026-2027. Currently, new energy vehicles are exempt from a purchase tax of 30,000 RMB. From 2026-2027, it will be adjusted to half reduction, leading to a tapering off of the tax exemption and an upcoming rise in beta, combined with anti-inner-circulation measures, benefiting brands in the 30,000 RMB price range as the product cycle shifts from weak to strong. The implementation of the L2 automated driving standards is imminent, further strengthening industry trends under the catalyst of concentrated sector developments. The recovery of domestic demand for commercial vehicles and an increase in non-Russian overseas exports have led to a continuous overperformance in the first half of the year for leading companies, with stable and undervalued assets remaining favored by defensive capital.