China’s electric vehicle (EV) market hit a record high in 2024, with sales increasing by more than 40 percent, according to new industry data released on Monday.
In contrast, gasoline-powered vehicle sales saw a sharp drop, falling from 14 million to 11.6 million units. This highlights the rapid shift toward electric vehicles in China, the world’s largest car market.
Why It Matters Gasoline and diesel vehicles now make up just over half of all new vehicle sales in China, a significant change from nearly full market dominance a decade ago. This shift has been driven by government incentives, more advanced EV models, and changing consumer preferences.
The decline in traditional fuel-powered vehicles has impacted international carmakers like Volkswagen and Nissan, which have long relied on strong demand from China. Both are now scrambling to catch up with domestic EV manufacturers, who are also expanding into international markets.
What to Know In 2024, Chinese automakers exported almost five million passenger cars, a nearly 20 percent increase from the previous year. Of these, 1.28 million were new energy vehicles (NEVs), including battery EVs, plug-in hybrids, and fuel-cell cars, marking a 6.7 percent rise.
Within China, plug-in hybrids have gained popularity among consumers concerned about the range limitations of pure electric vehicles. With strong domestic demand and growing international presence, Chinese automakers are increasingly challenging established car companies in the U.S. and Europe.
US Tariffs Challenge China-Made EVs Geopolitical tensions have also played a role in shaping trade dynamics. Last year, the U.S. imposed a 100 percent tariff on China-made EVs, and the European Union followed suit, citing concerns over unfair government subsidies. Chinese EV manufacturers can offer vehicles for as low as $12,000, making companies like BYD and NIO strong competitors in global markets.
China’s production capabilities in solar cells, steel, and aluminum have helped keep costs low, which Chinese officials argue supports the transition to a green economy. Tesla saw a one percent drop in sales in China last year, while BYD saw a 41 percent increase, according to the BBC.
What People Are Saying Lu Tian, head of sales for BYD’s “new energy” Dynasty models, said at the Beijing Auto Show last year, “China’s EVs have successfully replaced traditional fuel cars on a large scale, and this trend is irreversible.”
Volkswagen CEO Oliver Blume also commented, “This market has become something of a fitness center for us. We must work harder and faster to keep up.”
What’s Next China’s EV market is expected to continue its growth, posing a significant challenge for Western automakers. As Chinese EV exports rise, analysts predict that U.S. and European manufacturers will speed up their electrification efforts to maintain market share and remain competitive.
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