China’s new energy vehicle (NEV) sales are set to soar in 2025, with experts predicting a significant increase in both domestic and export markets. According to Zhang Yongwei, vice-chairman and secretary-general of the think tank China EV100, NEV sales, including exports, are expected to reach approximately 16.5 million units in 2025, with a penetration rate exceeding 50 percent.
This projection represents a substantial year-on-year growth rate of nearly 30 percent, highlighting the rapid expansion of the NEV market in China. In the domestic market alone, NEV sales are expected to reach 15 million units, with a penetration rate surpassing 55 percent. When combined with internal combustion engine vehicles, China’s overall car sales are forecasted to reach around 32 million units in 2025, with domestic sales accounting for approximately 26 million units and experiencing a 3 percent year-on-year growth rate.
The growth of NEV sales in China has been remarkable in recent years, with domestic retail sales reaching 7.75 million units in 2023, marking a 36.88 percent year-on-year increase. NEVs now contribute 35.7 percent of China’s total passenger vehicle retail sales, reflecting the growing popularity and adoption of electric vehicles in the country.
In December 2024, China saw a record-breaking retail sales figure of 1.4 million NEVs, marking the fifth consecutive month of surpassing 1 million units. This trend is expected to result in total domestic retail sales of NEVs in China reaching 11 million units for the entire year, reflecting a 42 percent year-on-year increase.
Government subsidies for new car purchases, particularly through trade-ins of old vehicles, have played a significant role in driving auto consumption in China. Starting in April, trade-in subsidies of up to RMB 10,000 ($1,370) were offered for car purchases to stimulate consumer spending. This policy was later updated in July, with the subsidy amount increased to as much as RMB 20,000.
As of December 13, over 5.2 million vehicles had been sold using the trade-in subsidies, according to China’s Ministry of Commerce. These initiatives have helped boost NEV sales and overall auto consumption in China, contributing to the country’s ambitious goals for electric vehicle adoption.
With a bright outlook for the NEV market in China, 2025 is shaping up to be a transformative year for the automotive industry. As the country continues to prioritize sustainability and innovation in transportation, the growth of electric vehicles is expected to play a crucial role in shaping the future of mobility in China and beyond.
