China’s new energy vehicle (NEV) sales are projected to experience significant growth in 2025, according to a recent forecast by a leading think tank. Zhang Yongwei, vice-chairman and secretary-general of China EV100, announced at a media conference that NEV sales, including exports, are expected to reach approximately 16.5 million units in 2025.
This represents a nearly 30% year-on-year increase and would push the NEV market penetration rate to over 50%.
In the domestic market alone, NEV sales are anticipated to hit 15 million units, achieving a penetration rate exceeding 55%. When factoring in internal combustion engine vehicles, total automobile sales in China are expected to reach about 32 million units in 2025, with domestic sales accounting for approximately 26 million units—a 3% year-on-year growth.
The optimistic outlook builds on the robust performance of the NEV sector in recent years. In 2023, domestic retail sales of NEVs in China totaled 7.75 million units, marking a 36.88% increase from the previous year, according to the China Passenger Car Association (CPCA). NEVs comprised 35.7% of China’s passenger vehicle retail sales that year.
The momentum continued into 2024, with the CPCA estimating retail NEV sales at a record 1.4 million units in December, the fifth consecutive month exceeding 1 million units. Based on these figures, domestic retail NEV sales are projected to reach 11 million units for the entirety of 2024, representing a 42% year-on-year growth.
Government incentives have played a significant role in propelling NEV adoption. Beginning in April, China offered trade-in subsidies of up to RMB 10,000 (approximately $1,370) for consumers purchasing new vehicles and trading in old ones. This policy was enhanced at the end of July, increasing the maximum subsidy to RMB 20,000. By December 13, over 5.2 million vehicles had been sold under this program, according to the Ministry of Commerce.
Source: CnEVPost
