The demand for internal combustion engine vehicles, including hybrids, will persist through 2031.
The growing popularity of hybrid-powered vehicles in China reflects a significant shift in consumer preferences. BYD’s dominant position, with sales of 4.3 million passenger cars in 2024, underscores its ability to capture a substantial share of the new energy vehicle (NEV) market.
The reversal in sales trends, where hybrid-powered vehicles surpassed battery-only ones in 2024, is notable. Data showing fewer hybrid sales in 2023 than battery-only vehicles indicates a dynamic market where consumer preferences can shift rapidly. Technological advancements, government policies, or evolving perceptions of practicality and cost could drive this.
Tesla, a maker of battery-only vehicles, is set to exceed 600,000 sales in China for the second consecutive year, based on CNBC’s data analysis from the China Passenger Car Association. The company, led by Elon Musk, is anticipated to announce its 2024 sales figures on Thursday morning in the U.S. Joe McCabe, president and CEO of AutoForecast Solutions, stated that while the industry continues to see growth in China’s battery-electric vehicle market, it appears to be reaching a plateau. He predicts that demand for internal combustion engine vehicles, including hybrids, will persist through 2031.
According to a company filing on Wednesday, Li Auto closely trails Tesla, achieving a record 500,508 vehicle deliveries in 2024. Most Li Auto’s vehicles feature a fuel tank to extend the battery’s driving range. Meanwhile, Leapmotor, a partner of Stellantis in China that offers both battery-electric and hybrid vehicles, reported nearly 300,000 deliveries in 2024 and has set a target of 500,000 for the upcoming year.
Electric car brands encountered heightened competition over the past year with smartphone maker Xiaomi entering the market by launching its SU7 electric sedan in March. By December’s end, Xiaomi reported delivering over 135,000 units and has set an ambitious goal of reaching 300,000 deliveries in 2025.
According to the Passenger Car Association, China’s drive to advance its electric car market reached a milestone in July, as new energy vehicles (battery-only and hybrids) accounted for over half of all passenger car sales. This trend continued through November, with a penetration rate of 52.3 percent, up from 36 percent in July 2023.
According to Joe McCabe, China’s growth in new energy vehicles is bolstered by incentives aimed at promoting domestic brands over foreign ones. Cities like Beijing ease license plate access for new energy vehicles, while recent efforts to boost consumption include subsidies for their purchase.
