Beijing, December 26, 2024 - Electric vehicle (EV) sales in China are projected to exceed traditional vehicle sales for the first time in 2025, according to a report by investment banks including UBS and HSBC.
Domestic EV sales are expected to grow by 20% year-over-year, reaching over 12 million units, while internal combustion engine vehicle sales are forecasted to decline by more than 10%, dropping below 11 million units.
This shift underscores the rapid transition towards clean energy vehicles in China, contrasting with slower growth in the West, where high interest rates and inflation have tempered consumer demand.
Government incentives, such as a subsidy exceeding $2,800 for consumers trading in traditional vehicles, have bolstered EV sales. Competitive pricing strategies from domestic manufacturers like BYD and Nio further enhance market dynamics.
In March, BYD introduced a 5% discount on its Seagull model, pricing it under $10,000. Tesla has also adjusted its prices in response to domestic competition, despite a 3.1% decline in its revenue in the first half of 2024.
In the first week of December, Tesla's China division reported 21,900 EV sales, marking its highest weekly sales in the fourth quarter.
Chinese EV manufacturers are attempting to expand internationally but face challenges due to stringent tariffs imposed by Western countries. In October, the EU decided to increase tariffs on Chinese EVs by up to 45% over the next five years.