China has become the largest electric car market in the world. In just a few years, the Asian giant has managed to position itself as the country where the most electric cars are sold. Growth has reached a pace that analysts already point out that in 2025 we will see a unique event for its market: more electric cars will be sold than vehicles with combustion engines.
At least those are the accounts that arrive from China and that they collect in Financial Times. They state in the economic newspaper that in 2025 they expect to sell a total of 12 million electric cars. To give us a better idea, in 2022 5.9 million electric cars were sold, so in three years this figure would be doubling.
The forecasts are based on information provided by four investment banks and research groups and refer only to electric cars. The latter is important because in China electric vehicles and plug-in hybrids remain in the same category called “new energy vehicles.” However, Financial Times assures that next year more electric cars will be sold than the sum of all technologies that use combustion engines.
Constant progress that leads the largest market in the world
To get an idea of what it means to sell 12 million electric-only cars, between January and November 2024 (latest available data provided by ACEA) 9,726,049 cars have been sold in Europe, adding all types of technologies. If we talk exclusively about electric cars, 1,303,686 registrations have been recorded. This figure represents 13.4% of sales.
Supported by state subsidies, the sale of electric cars has not stopped growing in China in recent years, despite the fact that growth has cooled down this year. A trend that the State itself has tried to reverse by providing more and more aid for purchases.
Contrary to what happened with electric cars, cars with combustion engines will fall to 11 million registrations in China, according to data collected Financial Times. While it is expected that electric vehicles double their sales between 2022 and 2025vehicles with combustion engines will suffer a drop of almost four million units. In 2022, 148 million cars with combustion engines will be sold in China.
The experts consulted by the economic newspaper point out that the State’s intention is clear to ensure that its manufacturers reach a productive level that helps them reduce manufacturing costs and, with them, position themselves as a cheaper alternative in the world market.
In fact, they point out that the level of production is such that companies are almost forced to leave the country through overproduction that is cooking. This is not something new. At the beginning of this year, there was already an excess of stock that China wanted to place in Europe as soon as possible. Threatened by a cheaper and equally competitive product, the European Union has lifted tariffs on electric cars produced there.
For now, these tariffs seem to have partially slowed the arrival of Chinese electric models on the market according to data from Bloombergwith SAIC’s MG being the company most punished after receiving the harshest punishment (35% in addition to the 10% applied previously). Despite this, we are talking about electric cars because so far in 2024, the SAIC group has sold 6% more cars in Europe than last year, with 217,209 units compared to 204,972 in 2023.
It remains to be seen how this growth in electric car sales in China affects its local brands and foreign companies, such as Europeans and Americans (and especially Tesla, in the latter case). In Financial Times They point out that foreign companies will have a market share of 37%, establishing a new historical minimum. Since 2020, the drop is 64%.
Customers in the Chinese market are turning our backs on traditional manufacturerswhich is a major problem for German companies such as Volkswagen, Mercedes or BMW. Their cars have been, until now, an example of quality and aspirational vehicles, but changes in the market have made customers prefer those cars that rely on other types of experiences inside.
Contrary to what has traditionally happened in the automobile market, the constant launch of new vehicles and updates to already known models has caused traditional manufacturers to fall behind. They point out in the economic newspaper that HSBC calculated that in the last quarter of 2024 alone a total of 90 new models would be launched on the market and that, of them, 90% would be completely electric cars.
This frenetic pace of launches and updates has also led to a Price war from which European manufacturers have not been able to escape. While German manufacturers have had problems lowering the prices of their models (with some of them completely off the hook), BYD aims to reduce the prices of its cars by 10% next year, saving money in its supply chain.
Photo | Xiaomi
In WorldOfSoftware | Europe has set out to sell us electric cars and China is rubbing its hands: it already manufactures 76% of those sold worldwide
