China’s car sales fell to a three‑year low in 2025, while record electric vehicle exports lifted the market. Discover the trends now.
China’s automotive sector recorded its slowest sales growth in three years during 2025, as domestic demand weakened sharply.
Domestic Market Slumps
According to the China Passenger Car Association (CPCA), total car deliveries in December 2025 dropped 14.5% year‑on‑year to 2.28 million units – a deeper decline than the 8.5% fall seen in November and the biggest monthly dip since February 2024.
For the full year, overall sales rose only 3.9%, down from a 5.3% increase in 2024 and marking the weakest expansion since 2022.
Electric Vehicles Overtake Petrol Cars
2025 also witnessed a milestone: battery‑electric vehicles (BEV) and plug‑in hybrids (PHEV) together outsold traditional gasoline models for the first time on an annual basis. However, the growth rate of the broader new‑energy vehicle (NEV) category slowed dramatically to 17.6% from 40.7% the previous year.
Why Domestic Sales Are Faltering
Local demand was hit hard in the fourth quarter after many provinces cut or paused subsidies for old‑car replacements due to budget constraints. The resulting squeeze intensified competition in the world’s largest auto market.
Major manufacturers such as Changan, FAW, Li Auto and Nio missed their 2025 sales targets. Even BYD – China’s top‑selling automaker – posted its lowest five‑year growth rate, despite reaching a revised target of 4.6 million vehicles.
Export Momentum Offsets the Slump
BYD serves as a prime example of the export‑driven recovery. The company delivered more than 1 million cars abroad in 2025, overtaking Tesla to become the world’s largest electric‑vehicle producer.
Overall, Chinese vehicle exports rose 19.4% to 5.79 million units. Exports of EVs and PHEVs surged 86.2%, reaching 2.42 million cars.
While industry forecasts had predicted a slowdown to about 10% growth in auto exports for 2025 – and even warned that EV export growth might stall – the data shows that overseas sales remain a critical pillar supporting China’s automotive industry amid domestic headwinds.
Looking Ahead
Analysts expect the Chinese market to remain volatile, with policy support and consumer confidence being key variables. For manufacturers, the dual strategy of leveraging strong export demand while revitalising domestic incentives will likely define success in the coming years.