China's Electric And Hybrid Vehicle Sales Surge in 2024

In 2024, sales of electric and hybrid vehicles in China saw a remarkable rise of over 40%. This incredible growth reflects the increasing demand for new energy vehicles (NEVs) in the country. However, the growth comes amidst a challenging price war that is affecting the profitability of many manufacturers.

The electric vehicle market in China has been booming in recent years. One of the primary drivers of this growth has been the generous subsidies provided by the government of Beijing, which have made NEVs more accessible to consumers.

Despite being the largest automotive market in the world, China is facing stiff competition among domestic car manufacturers, particularly as the economy experiences a consumption slowdown. This situation has further escalated the ongoing price war, putting pressure on many companies to maintain their market share while profitability suffers.

According to the China Passenger Car Association (CPCA), nearly 11 million NEVs were sold in 2024, marking a substantial year-on-year increase of 40.7%. These vehicles made up approximately 47.6% of all retail car sales in the country. In comparison, NEVs represented only 22.6% of car sales in Europe as of November 2023.

December was a particularly strong month for NEV sales, with CPCA reporting that more than 1.3 million units were sold, which is a 37.5% increase compared to the previous year and the fifth month in a row where sales exceeded one million units.

Overall, the total vehicle sales in the Chinese market increased by 5.5%, reaching nearly 22.9 million units, as stated by the CPCA.

The price war among electric vehicle makers is expected to continue into the new year. CPCA Secretary General Cui Dongshu mentioned during a press conference that over 200 different car models reduced their prices in the past year, up from 148 in 2023.

Leading the charge in China's electric vehicle market is BYD, a company based in Shenzhen, which sold over four million vehicles globally in 2024. BYD holds about one-third of the Chinese market share, but its performance in international markets is less favorable, due to increased customs duties imposed by various governments. In December, foreign sales constituted only 12% of BYD's total vehicle sales.

"We are currently experiencing significant pressure on exports," stated Cui, highlighting that NEV sales in China are facing obstacles from the European Union's actions.

The European Union has raised concerns regarding the substantial state support provided by the Beijing government to its domestic automakers, leading to claims of unfair competition. An investigation has indicated that these subsidies are undermining local competitors in Europe.

Furthermore, foreign automakers are grappling with diminished sales in China, which, despite being the second-largest economy in the world, has seen a challenging market environment. In a noteworthy milestone, BYD's quarterly revenue surpassed that of its global rival Tesla for the first time during the third quarter of last year.

China, Vehicles, Sales