China's "New Energy Vehicle Domestic Market Rapid Growth... Expected to Reach 12 Million Units by 2025"

Growth Expected to Reach 40% Coverage Rate
Recent Growth Hindered by COVID-19 Prevention Measures

[Image source=Reuters Yonhap News]

[Asia Economy Beijing=Special Correspondent Kim Hyunjung] Consumption of new energy vehicles (electric vehicles, hybrid vehicles, hydrogen vehicles) in China is rapidly increasing, with annual sales expected to reach 12 million units by 2025.

According to Chinese economic media Caixin on the 6th, Wang Qing, Deputy Director of the Market Economy Research Institute at the Development Research Center of the State Council, stated this at the recently held Green Transition China Economic Growth Forum. Related forecasts expect the penetration rate of new energy vehicles, currently at around 20%, to soar to 40% by 2025.

Based on cumulative data from January to September, sales of new energy vehicles in China reached 4.567 million units. Earlier in August, the National Passenger Car Market Information Association revised its 2022 sales forecast upward from 5.5 million to 6 million units.

However, the Chinese automobile market has recently shown sluggish trends due to the spread of COVID-19 and the resulting strengthened epidemic prevention measures. According to the China Passenger Car Association, retail sales of passenger cars in China from October 1 to 23 were 1.063 million units, down 3% compared to the same period last year and 6% compared to the previous month. Wholesale sales also amounted to only 1.188 million units, an 8% decrease from the previous month. Considering that October includes the National Day holiday (October 1?7), China’s largest holiday and a peak season for car sales, these results fell far short of expectations.

Despite the government’s active provision of subsidies and support for research and development (R&D), the recent growth momentum in new energy vehicle sales appears to be stagnating. According to data from the China Passenger Car Association, the year-on-year growth rate of new energy vehicle wholesale sales surged to 123.7% in July but slowed to 103.9% in August, 94.9% in September, and 87% in October.

This content was produced with the assistance of AI translation services.