China’s car sales sustained their upward trajectory in 2024, as sales of electric vehicles (EVs) and plug-in hybrids reached an all-time high in the world’s largest auto market.
This surge came despite a fierce price war, with government-subsidized trade-ins for greener vehicles helping to fuel demand.
In November 2024, China accounted for 41% of the world’s automobile sales with about 3.3 million vehicles sold.
In 2024, almost 11 million new energy vehicles (NEVs) were sold, a year-on-year increase of 40.7 percent, the China Passenger Car Association (CPCA) said.
NEVs accounted for nearly half — 47.6 percent — of all retail sales last year, the association added.
The outstanding growth in China in a largely stalling global EV landscape spelled good fortune for local winners such as BYD, Geely and Xiaomi and expedited an industry shakeout in a competitive market.
It also benefited Tesla, whose China sales hit a record high in 2024, bucking an overall decline in the U.S. EV giant’s global sales.
Other foreign automakers such as General Motors, Toyota and Volkswagen continued to lose ground to local rivals, however, with many of them struggling to sustain effective capacity usage at their Chinese plants.
Passenger vehicle sales were up 5.3% to 23.1 million units in 2024 for the fourth straight year of growth, in line with the 2023 pace, according to the China Passenger Car Association (CPCA).
Sales of EVs and plug-in hybrids, known collectively as new energy vehicles (NEVs), rose 40.7% to make up 47.2% of total car sales last year, closing in on a 50% milestone, buoyed by a program likened to the U.S. “cash-for-clunkers” stimulus in 2009.
More than 6.6 million cars sold last year benefited from government subsidies of up to $2,800 for NEV purchases versus as much as $2,000 for more fuel-efficient combustion engine vehicles. Over 60% of the subsidized purchases went to NEVs, per official data.
The authorities announced recently an extension of the auto trade-in subsidies into 2025 as part of an expanded consumer trade-in scheme to revive economic growth.
“We expect the vehicle trade-in subsidy program to boost full-year 2025 demand by 3.0 million units,” said Deutsche Bank analyst Bin Wang.
Despite the sales growth, China’s auto industry has seen a deteriorating profitability over the years, with sales profit margins falling to 4.4% in the first 11 months of 2024 from 6.2% in 2020, according to the CPCA.
Suppliers and dealers also suffered from an extended price war that forced them to cut component prices more or offer deeper discounts.
