China’s electric vehicle (EV) market experienced remarkable growth in 2024, with sales surging over 40% while gasoline-powered car sales significantly declined, according to recent industry data. This shift underscores China’s accelerating transition towards electric mobility and its growing influence on the global automotive landscape.
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The China Association of Automobile Manufacturers (CAAM) reported a total of 31.4 million vehicle sales in 2024, encompassing cars, buses, and trucks. This represents a 4.5% increase compared to the previous year, exceeding production growth of 3.7%. Notably, passenger car exports saw a substantial jump of nearly 20%, reaching almost 5 million vehicles.
New Energy Vehicles Drive Export Growth
China’s “new energy vehicles” (NEVs), encompassing battery electric vehicles (BEVs), fuel-cell vehicles, and plug-in hybrid electric vehicles (PHEVs), played a crucial role in this export surge. NEV exports reached 1.28 million units in 2024, a 6.7% increase from 2023. This expansion has raised concerns among established automakers in the U.S. and Europe, leading to the implementation of tariffs on China-made EVs. The U.S. imposed a 100% tariff on these vehicles, while the European Union introduced new tariffs citing unfair government subsidies benefiting the Chinese EV industry.
Domestic Market Trends: Incentives and Shifting Consumer Preferences
Within China, December’s passenger car sales witnessed a 13.6% increase, fueled by government incentives such as rebates for trade-ins. This contributed to a 3.1% overall growth in passenger car sales for the year, reaching 22.6 million units. Plug-in hybrids experienced the fastest growth, appealing to a new wave of EV buyers seeking extended range or hesitant to fully embrace pure EVs.
This rapid expansion of China’s EV market stands in contrast to the slowing growth observed in the U.S. and Europe. Sales of traditional gasoline and diesel vehicles in China plummeted by 17% in 2024, falling to 11.6 million units and representing only 51% of new car sales.
Impact on Traditional Automakers and Future Outlook
The declining demand for gasoline-powered cars has significantly impacted foreign automakers like Volkswagen and Nissan, who have long relied on the Chinese market. These companies are now accelerating their development of EVs to compete in this rapidly evolving landscape. Recent merger plans between Honda and Nissan partly reflect the need to address the challenge posed by China’s rising EV manufacturers.
In conclusion, China’s automotive market is undergoing a profound transformation, with EVs rapidly gaining dominance while traditional gasoline car sales decline. This shift has significant implications for global automakers and highlights China’s leading role in the transition towards electric mobility. The continued growth of China’s EV market is expected to reshape the automotive industry in the coming years.
