China’s Car Sales Plunge In January

Car sales in China fell sharply in January due to holidays and the announcement of the end of government incentives, and gasoline cars again overtook electric vehicles and plug-in hybrids, according to data from the CPCA association.

In January, 1.81 million new vehicles were sold in the world’s largest market, 12 percent fewer than in the same period last year. In December, sales recorded the same percentage growth, with around 2.6 million cars delivered.

Sales usually fluctuate greatly in the first two months of the year due to the start of the Chinese Lunar New Year, which fell in January this year and February last year.

At the same time, people visited car dealerships less frequently in January because Beijing announced the end of purchase incentives at the end of 2024, which triggered a wave of purchases. In such conditions, manufacturers also offered more favourable prices.

The government ultimately decided to extend the stimulus program.

Sales of electric vehicles and plug-in hybrids in the new energy vehicle (NEV) category jumped 10.5 percent year-on-year in January and accounted for 41.2 percent of total sales, data from the China Passenger Car Association (CPCA) showed. The latest data shows, however, that NEVs did not surpass gasoline car sales even in January.

Lunar New Year Sales Wasn’t Positive

“The eve of the Lunar New Year is traditionally the peak car-buying season in rural areas, and demand is mainly driven by first-time car buyers, with gasoline cars accounting for a larger share of total sales,” said Cui Dongshu, secretary-general of the CPCA. In 2025, NEV sales should exceed the targeted 50 percent and reach a share of 57 percent, up from 47 percent in 2024.

As the world’s largest car market braces for weaker sales this year despite extended subsidies, electric vehicle giants, including BYD, are trying for the third year in a row to attract buyers with reduced prices.

On Monday, BYD lowered the minimum price for electric vehicles with advanced autonomous driving features to just $9,555, far below that of competitors like American Tesla. Tesla has extended discounts and financial incentives in China, while manufacturers Xpeng and Nio are providing interest-free financing for up to five years for some models.

According to the association, Chinese car exports rose by just three percent in January compared to the same period last year, to 380,000 vehicles. In December, they increased by six percent.

• Read More: China EV Sales Rose By More Than 40 Percent Last Year