China’s EV sales soar 40 percent amid gasoline plunge

China’s electric vehicle (EV) market experienced a record-breaking year in 2024, with sales surging over 40 percent, industry data revealed Monday.

Meanwhile, gasoline-powered vehicle sales in the world’s largest car market fell dramatically—from 14 million to 11.6 million—highlighting the accelerated transition from traditional fuel sources.

Why It Matters

Gasoline and diesel cars now represent just over half all new vehicle sales in China, compared to near-total market dominance a decade ago. This dramatic shift has been propelled by government incentives, the introduction of more advanced models, and evolving consumer preferences.

The decline in traditional fuel-powered vehicle sales has been a blow to international automakers such as Volkswagen AG and Nissan Motor Corp., which have historically relied on strong demand in China. Both companies are now racing to catch up with domestic EV producers, which are also expanding aggressively into foreign markets.

What to Know

In 2024, Chinese automakers exported nearly five million passenger cars, a nearly 20 percent increase from 2023. Among these, “new energy vehicles” (a category that includes battery EVs, plug-in hybrids, and fuel-cell cars) accounted for 1.28 million units, reflecting a 6.7 percent rise.

Domestically, EVs, particularly plug-in hybrids, have attracted a growing segment of consumers who are cautious about the range limitations of pure electric models. With robust domestic demand and international expansion, Chinese automakers are posing a direct challenge to established car manufacturers in the U.S. and Europe.

US Tariffs Challenge China-Made EVs

Amid this, geopolitical tensions have shaped trade dynamics. The U.S. imposed a 100 percent tariff on China-made EVs last year, and the European Union followed with similar measures, citing unfair government subsidies as a major concern.

Chinese firms can sell EVs for as little as $12,000. Companies like BYD and NIO are aggressively entering global markets, challenging established Western automakers. China’s solar cell plants and steel and aluminum mills have enough capacity to meet much of the world’s demand, with Chinese officials arguing their production keeps prices low and would aid a transition to the green economy. Tesla sales in China were down one percent last year, leaving BYD to plug the gap with an increase of 41 percent, reports the BBC.

What People Are Saying

Lu Tian, the head of sales for Chinese vehicle manufacturer BYD’s “new energy” Dynasty models, said at the Beijing Auto Show last year “China’s EVs […] have successfully realized the large-scale replacement of traditional fuel cars, and this trend is irreversible.”

Volkswagen CEO Oliver Blume said on the eve of the same show “This market has become something of a fitness center for us.” He added “We have to work harder and faster to keep up.”

What’s Next

China’s EV market shows no signs of slowing. For automakers in the West, the challenge is clear: adapt or lose relevance in a rapidly electrifying world. With Chinese EV exports continuing to surge, industry analysts expect automakers in the U.S. and Europe to accelerate their plans for electrification to maintain market share.

This article includes reporting from The Associated Press