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Home Electric Vehicles

China’s EV sales set to overtake traditional cars, surpassing Western rivals

David Ijaseun by David Ijaseun
January 3, 2025
in Electric Vehicles, Premium
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Chinese EVs

Chinese EVs

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China is on the verge of a historic milestone, with electric vehicles (EVs) set to outsell traditional fuel-powered cars for the first time in 2025. This shift is expected to make China the global leader in EV sales, years ahead of Western markets.

Forecasts predict that EV sales, including pure battery and plug-in hybrids, will surge by 20% to more than 12 million units next year, more than double the 5.9 million sold in 2022. Meanwhile, sales of internal combustion engine (ICE) vehicles are expected to drop by over 10%, further signaling China’s rapid transition to cleaner, electric mobility.

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The surge in EV sales comes as the country’s commitment to electrification accelerates, leaving traditional vehicle sales in decline. Forecasts suggest that sales of cars with internal combustion engines (ICE) will fall by more than 10% in 2025, dropping to under 11 million units from 14.8 million in 2022.

Robert Liew, Director of Asia-Pacific Renewables Research at Wood Mackenzie, said China’s dominance in EV sales underscores the country’s success in advancing its domestic technology and securing global supply chains for critical EV components. “They want to electrify everything,” Liew remarked. “No other country comes close to China.”

A Rapid Transition in China’s Automotive Market

China’s achievement in EV sales signals a major leap ahead of its official target set in 2020. The Chinese government aimed for EVs to account for 50% of new car sales by 2035. However, projections now suggest that the country will meet this goal a full decade ahead of schedule. In fact, EVs could dominate the market much sooner, with estimates placing sales at 18 million by 2034.

The rapid rise of EVs has put pressure on traditional car manufacturers in China and globally. Data from Automobility, a Shanghai-based consultancy, shows that the market share of foreign-branded cars in China fell to a record low of 37% in 2024, down from 64% in 2020.

“While China’s domestic EV sector is flourishing, intense competition is expected to squeeze out weaker players,” said Yuqian Ding, an analyst at HSBC. “The longer-term direction is clear—China’s EV juggernaut is unstoppable.”

Foreign Manufacturers Struggling to Keep Up

The shift towards EVs has not been without challenges for foreign manufacturers. In just one month, General Motors wrote down over $5 billion in business value in China, while Porsche warned of a €20 billion loss on its Volkswagen stake. Meanwhile, Nissan and Honda announced plans to merge in response to the rapidly changing automotive landscape.

Despite these difficulties, China’s automotive giants are not resting on their laurels. Nearly 90 new car models, with a focus on EVs, are expected to hit the market by the end of 2024. This pace of innovation underscores the intensity of the competition as manufacturers strive to dominate the EV sector.

The Future of EVs in China

The rapid adoption of EVs in China is expected to continue, with new models hitting the market almost daily. Investment banks UBS and HSBC predict that by 2025, China’s EV sales will not only surpass traditional car sales but also set the stage for future growth in the global automotive industry.

While the transition to EVs is well underway in China, it remains uncertain how Western nations will respond. As the demand for EVs continues to rise, many foreign manufacturers are struggling to keep up, and the global automotive industry faces a major shift.

Read more on BYD outpaces Tesla with 41% growth, selling 1.76m EVs in 2024

Tags: BYDChinaelectric vehiclesHeadline

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