Electric vehicle sales surge 40% in China as gasoline cars collapse

In 2024, China saw a significant increase in electric vehicle sales, with all types of EVs rising over 40% as traditional gasoline and diesel vehicle sales declined sharply. The China Association of Automobile Manufacturers reported a total of 31.4 million vehicles sold, marking a 4.5% increase compared to the previous year. However, sales of gasoline-powered cars dropped from 14 million to 11.6 million, a decline of 17%. This shift reflects a growing preference among consumers for electric vehicles, aided by government incentives and increased domestic production capacity. The sales surge occurred in a context of rising competition from local manufacturers who are producing a wider variety of affordable EV options. Foreign automakers, including luxury brands like Porsche, BMW, and Mercedes, have struggled to keep up, with many reporting significant decreases in sales. Experts have noted that patriotism and support for national brands are influencing higher-end consumers' choices, moving them toward locally manufactured luxury cars. This trend is challenging for international companies that have long relied on the Chinese market to boost their sales. Chinese exports of vehicles also increased in 2024, up nearly 20%, with exports of what the country classifies as new energy vehicles—comprising battery EVs, fuel-cell cars, and plug-in hybrids—reaching 1.28 million. Yet, this growth is now facing hurdles due to increasing tariffs imposed by the U.S., Canada, and the EU, aiming to curb the influx of competitively priced Chinese electric vehicles. These tariffs stem from concerns regarding government subsidies that enable Chinese manufacturers to sell their vehicles at lower prices globally. In response, China has filed a complaint at the World Trade Organization over these trade barriers. As the global automotive landscape shifts in favor of electric vehicles, traditional gas and diesel models continue to lose market share—a trend that poses existential challenges for foreign manufacturers. Various automakers are re-evaluating their strategies, with some considering mergers or strategic partnerships to better compete in this rapidly evolving market. China's aggressive push towards electrification is not just a domestic phenomenon; it's reshaping the global auto industry amidst economic uncertainties and changing consumer preferences. The impact of these developments will likely characterize the automotive market dynamics for years to come.