International. Half of all vehicles sold in China in July were pure electric vehicles (EVs) or plug-in hybrids.
According to industry data, these sales figures mark a milestone that underscores the progress of the world's largest automotive market in EV adoption compared to Western counterparts.
Sales of new energy vehicles (NEVs) increased by 37% in July 2024 compared to the same period a year earlier, accounting for a record 50.7% of car sales, according to data from the China Passenger Car Association (CPCA).
Three years ago, NEV sales accounted for just 7% of total vehicle sales in China, but its heavy investments in EV supply chains have fueled the growth of the domestic EV industry, leaving many established foreign brands struggling to catch up.
In contrast, the share of electric and hybrid vehicle sales in the United States reached 18% in the first quarter of this year, according to the U.S. Energy Information Administration, a research firm.
The pace of growth of NEVs in China accelerated from a 28.6% increase in June. Sales of pure electric vehicles rose 14.3% in July, up from 9.9% growth in June.
Solid growth in NEV sales helped some local brands, such as BYD and Li Auto, set new monthly sales records in July.
However, total auto sales in the domestic market fell 3.1%, extending declines for four straight months, with consumer confidence weak as the economy struggles to gain momentum amid a prolonged crisis in the housing market.
Weakness in the auto market prompted China's state planning agency to announce in late July that cash subsidies for vehicle purchases would be doubled — to 20,000 yuan ($2,785 USD) per purchase — and retroactive to April, when they were first introduced.
In addition, some cities with restrictions on car purchases have begun to relax restrictions. The capital city Beijing, for example, announced it would expand its licensing quota for NEVs by 20,000, the first relaxation of restrictions since a strict quota system was implemented in 2011 to ease traffic congestion and improve air quality.
A protracted price war that had seen a flood of domestic brands competing with newer, cheaper models is also winding down as automakers seek to protect margins, with CPCA secretary-general Cui Dongshu hoping for further stabilization in August and September.
China's top EV firm, BYD, continued to offer discounts in July, but less intensively than in the first half of the year. It offered a price reduction of up to 17.3% on the BAO 5 hybrid SUV within its Fangchengbao off-road lineup at the end of July.
Vehicle exports in July rose 20% compared with a year earlier, relieving themselves of a 28% increase in June, as Chinese-made EVs prepare for interim EU tariffs, Cui said.
