China car sales rise by 16% in August

China's vehicle sales increased 16.4% year-on-year to 2.855 million units in August 2025, accelerating from July’s 14.7% growth, according to data from the China Association of Automobile Manufacturers (CAAM).

The strong figures reflect both resilient domestic demand and ongoing policy support measures. Sales of new energy vehicles (NEVs) — which include battery electric, plug-in hybrid, and fuel-cell cars — surged 26.8% year-on-year, continuing to outperform the broader market.

Over the first eight months of 2025, total vehicle sales rose 12.6%, while NEV sales soared 36.7%, underscoring the sector’s role as the key growth driver. Earlier, CAAM forecast full-year vehicle sales to expand 4.7% to 32.9 million units, with NEVs expected to jump 24.4% to 16 million units. That would extend China’s dominance in the global EV sector, where it already accounts for more than half of worldwide sales.

By comparison, 2024 saw vehicle sales grow 4.5% to 31.436 million units, a sharp slowdown from the 12% surge recorded in 2023, when post-pandemic demand and aggressive subsidies fueled a strong rebound. The acceleration in 2025 reflects both a lower base and renewed policy incentives, including tax breaks for EV purchases, subsidies for rural vehicle replacement schemes, and expanded charging infrastructure.

Exports have also been a bright spot, with Chinese automakers expanding market share in Europe, Southeast Asia, and Latin America, even as Western regulators intensify scrutiny over subsidies and security concerns. NEV exports in particular are rising sharply, supported by competitive pricing and growing overseas partnerships. However, trade frictions remain a risk, as the EU pursues anti-subsidy investigations and the US expands tariffs on Chinese auto imports.

Looking ahead, industry analysts note that NEV growth is likely to remain robust thanks to consumer preference shifts, technological improvements, and falling battery costs, though competition among domestic automakers has intensified, squeezing margins. For conventional vehicles, demand is expected to remain steady but less dynamic, with gradual replacement of older fleets sustaining sales.