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Is China's Electric Vehicle Market Facing a Turning Point?

Views: 0     Author: Li     Publish Time: 2025-01-20      Origin: Site

This year, the competition in China's new energy car market has intensified, with new models emerging rapidly. Major car dealers in the automobile industry are deploying significant discounts as a strategic move to capture more market share. In contrast, smaller brands with limited financial resources find themselves struggling in this fast-paced battle, facing numerous challenges.

Despite increased subsidies and expanded financing channels aimed at boosting electric vehicle sales, as well as various discounts in the market, the growth in sales of China's pure electric cars has been relatively sluggish. According to the China Association of Automobile Manufacturers, in 2024, the production and sales of new energy cars reached 12.888 million and 12.866 million units, respectively, marking growth rates of 34.4% and 35.5% year-on-year. However, these impressive numbers are primarily driven by the robust growth of plug-in hybrid vehicles.


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Plug-in hybrid cars now account for 40% of new energy vehicle sales, a 10.4 percentage point increase from the previous year. This rapid growth has become a new driving force in the electric vehicle market. In contrast, pure electric cars make up 60% of the total new energy vehicle sales, a reduction of 10.4 percentage points compared to last year.

While end-user incentives have led to significant reductions in pure electric car prices, they remain high compared to traditional internal combustion engine automobiles. Range anxiety and vehicle depreciation are still major concerns for potential buyers. The influx of affordable new energy models last year partially stimulated consumer demand.

Among new energy car manufacturers, BYD remains in the lead. In 2024, BYD sold a total of 4.2721 million new energy vehicles, reflecting a 41.26% year-on-year increase. Of these, plug-in hybrid cars accounted for 2.4854 million units, a year-on-year growth of 72.83%. Meanwhile, Tesla, China's second-largest pure electric car manufacturer, experienced mixed results, selling about 657,000 units. This marks an 8.8% growth, accounting for nearly 40% of Tesla's global sales. Although still significant, this growth rate has slowed considerably compared to the previous year’s 37.3% surge in China.


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Additionally, some strong local electric vehicle manufacturers have excelled. Li Auto secured a top position with 500,500 units, with Hongmeng Zhixing and Leap Motor following with 445,000 and 293,700 units, respectively. Zeekr delivered 222,100 vehicles throughout the year, marking an 87% year-on-year increase.

However, not all new energy car manufacturers are thriving. Smaller, underfunded companies are struggling. NETA’s sales have significantly dropped, with only 90,000 units sold from January to November. Consequently, the company is accelerating restructuring efforts to reduce costs and prepare for a potential Hong Kong listing next year.

Last year, several startup car companies in China, including Jiyue, WM Motor, HiPhi, and Yuanyue, went bankrupt, and more companies are likely to face the same fate. Currently, China has approximately 200 new energy car companies, a drastic decrease from the estimated numbers a few years ago. Many of these are small-scale companies established to benefit from government incentives, operating mainly on a regional level with relatively low technical content. The entry of tech giants like Huawei and Xiaomi into the automobile sector further compresses the survival space of these minor players.

Moreover, alongside ongoing price wars, cost-cutting measures are underway within car companies. This trend is beneficial for consumers as it leads to lower prices for pure electric vehicles and enhances the quality and performance of new models. However, for smaller, under-resourced car companies, this poses significant challenges.


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