China's NEV sales surge by 40% amid price cuts and subsidies
The Chinese Passenger Car Association (CPCA) reported on Thursday that the sales of electric and hybrid vehicles (NEVs) in China increased by 40.7% year over year in 2024, reaching a record level of nearly 11 million units.
According to CPCA data, passenger car sales rose by 5.3% in 2024, reaching 23.1 million units. Thus, 2024 marked the fourth consecutive year of growth.
CPCA also reported that 47.7% of new cars that hit Chinese roads in 2024 were a total of 10,899,000 hybrid and electric vehicles. From August to December, the sales of these types of cars exceeded 1 million units each month.
Nearly 30% (over 6.6 million) of all new cars sold in China in 2024 received government subsidies. Of this number, more than 60% were electric and hybrid vehicles. The Chinese government subsidizes the purchase of such vehicles by up to $2,800, while it also provides a subsidy of up to $2,000 for gas-powered cars.
Additionally, in 2024, manufacturers reduced the prices of a total of 200 electric and hybrid car models, noted CPCA's Secretary General, Cui Dongshu. The association's data also shows that another record year in terms of car sales, including in the NEV segment, did not translate into greater profits for manufacturers.
Reuters points out that since 2020, the Chinese automotive industry has been consistently experiencing a decline in profitability. CPCA also predicts that the price war will not ease in 2025.
