China's car sales sustained their growth momentum in 2024, with electric vehicles (EVs) and plug-in hybrids achieving record-breaking sales in the world's largest auto market. A fierce price war and government-subsidised trade-in programmes for greener vehicles fueled the surge, boosting the overall market despite a stagnating global EV landscape.

Domestic automakers like BYD, Geely, and Xiaomi emerged as significant beneficiaries of the growth, leveraging the competitive environment to solidify their positions. Tesla also thrived, recording its highest-ever sales in China in 2024, even as the company faced a global sales decline.

However, foreign automakers such as General Motors, Toyota, and Volkswagen continued to lose market share to local competitors. Many struggled to maintain optimal production levels at their Chinese plants, highlighting the challenges of competing in a rapidly evolving market.

Passenger vehicle sales grew by 5.3% to 23.1 million units in 2024, marking the fourth consecutive year of growth, consistent with the 2023 pace, according to the China Passenger Car Association.

The rise in new energy vehicles (NEVs), including EVs and plug-in hybrids, was particularly notable. NEV sales soared by 40.7%, accounting for 47.2% of total car sales, inching closer to the 50% milestone. This growth was largely driven by a government programme similar to the U.S. "cash-for-clunkers" initiative of 2009, offering subsidies of up to $2,800 for NEVs and $2,000 for fuel-efficient combustion engine vehicles.

Official data revealed that over 6.6 million cars benefited from these subsidies, with more than 60% of the incentives directed toward NEVs. This underlined China's strategic focus on accelerating the transition to cleaner and greener transportation.