China’s vehicle export growth is expected to slow in 2025, signaling a shift for the global auto industry. The China Association of Automobile Manufacturers (CAAM) forecasts a modest 5.8% rise to 6.2 million units, down from a robust 19.3% increase in 2024.
The projected dip reflects rising international challenges and policy shifts. “The industry is adapting to tougher competition and external pressures,” said Xu Haidong, a CAAM official. Despite the slowdown, extended policy incentives in China are set to bolster sales in the domestic market, the world’s largest, with a 4.7% rise to 32.9 million units predicted for 2025.
A Mixed Picture for New Energy Vehicles
New energy vehicles (NEVs), including electric and plug-in hybrid cars, face a sharp deceleration in growth. NEV sales are expected to grow by 24.4% in 2025, a drop from 35.5% in 2024. Electric vehicle (EV) exports, in particular, fell 10.4% last year, while plug-in hybrid exports surged by 190%. This shift highlights the impact of the European Union’s additional tariffs on China-made EVs, introduced in late October.
The EU tariffs have prompted Chinese automakers to reconsider their strategies. Many are scaling back EV investments in Europe and turning to hybrid exports to offset trade challenges.
Subsidies Fuel Domestic Sales
Government subsidies remain a cornerstone of China’s auto market. Over 6.6 million vehicles sold in 2024 benefited from subsidies, including up to $2,800 for NEV purchases and $2,000 for fuel-efficient combustion engine vehicles. Experts believe extending these incentives into 2025 will cushion the market against weaker domestic demand and stiff global competition.
“The extension of trade-in subsidies is one of the biggest boons for growth,” Xu noted, underscoring its importance amid mounting external pressures.
While China remains a global automotive powerhouse, the industry faces a challenging road ahead, marked by shifting export strategies and evolving consumer demands.
Read more on Speed and sustainability: The top 5 hybrid cars to watch in 2025
![German self-driving auto indutry [Source Quartz]](https://autojournal.africa/wp-content/uploads/2025/09/German-self-driving-auto-indutry-Source-Quartz-350x250.png)
