BYD Yuan Up electric SUV (Source: BYD)
Electric vehicles and plug-in hybrids accounted for half of all car sales in China in July – a record high and the first time this milestone has been reached in the world’s largest auto market.
Sales of electric vehicles and plug-in hybrids (PHEVs) – known in China as new energy vehicles (NEVs) – rose 37% year-on-year in July, reaching a record 50.7% share of auto sales, according to data from the China Passenger Car Association (via Reuters). That’s up 28.6% from June, with EVs up 14.4%.
The rapid growth in China is astonishing – three years ago, sales of electric vehicles with new technology accounted for just 7% of total vehicle sales – and government incentives are having a big impact.
A total of 1.73 million passenger vehicles (including gasoline vehicles) were sold in China in July 2024, a year-on-year decline of 3.1%. To boost car sales, the Chinese government doubled cash incentives for electric vehicles to 20,000 yuan ($2,785) in late July, making them retroactive to April, when they were first announced.
In addition, NEVs are exempt from sales tax up to 30,000 yuan (US$4,175) in 2024 and 2025. In addition, there is a government scrappage incentive program that provides 20,000 yuan (US$2,540) to consumers who replace their gasoline car with an NEV.
Some cities are also loosening restrictions on car purchases. Beijing announced in July that it would increase its electric car registration quota by 20,000, the first time since the capital introduced its strict registration quota in 2011 to reduce air pollution and traffic congestion.
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