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In August, China, the world’s largest EV market, surpassed the milestone of one million EV sales in a single month, including both PHEV and BEV. Considering that just five years ago the entire annual sales of EVs in China barely exceeded this figure, this is a significant achievement of a maturing market. This achievement marks a new record, setting the stage for what is expected to be yet another record-breaking year for China’s EV sector, and the first of many months breaking one million monthly EV sales.
Why has this happened?
EV sales volume in China has been growing at a rate unmatched to the rest of the world. The previous monthly high was December 2023, when just over 950,000 EVs were sold, so it was only a matter of time until one million was surpassed. Although the market has been growing organically, August’s sales were aided by the increase of a government funded trade in subsidy scheme.
While China discontinued its nationwide EV subsidy at the start of 2023, after more than a decade in place, a new short-term incentive was introduced in April of this year. This NEV (New Energy Vehicle) trade-in scheme allowed consumers to trade in older EVs registered between 2011 and 2018, offering up to USD1,400 towards a new EV purchase. In July, the scheme was expanded to include ICE vehicles, and the subsidy for EVs doubled to just over USD2,800. This expansion spurred a wave of trade-ins, leading to the spike in new EV sales seen in August.
The Chinese EV market, the rise of the PHEV
As EV penetration has increased, the balance between BEVs and PHEVs has shifted. During 2021 and 2022, China’s EV market was dominated by BEVs, with PHEVs making up just under 25% of total EV sales. However, this trend began to change in 2023, with PHEVs representing one-third of EV sales, and by the first half of 2024, they accounted for over 40%.
China’s EV market is also highly concentrated, with the top ten automakers responsible for more than 80% of total EV sales in 2023. Within this group, BYD is the dominant player, accounting for over a third of China’s EV sales for 2023.
China’s figures in context of the broader EV market
In 2024, media outlets have been filled with reports of slowing EV sales and OEMs scaling back their electrification plans. Whilst this is true for Europe and North America, at a global level, the reality is that EV sales continue to grow, with China playing a pivotal role in driving the global expansion. China’s rapid market growth has given rise to a host of pure EV manufacturers, challenging legacy automakers and sparking concern among foreign governments. This has led to the introduction of tariffs by the EU, US, Canada, and others, aimed at curbing Chinese EV exports. These trade restrictions have squeezed China’s export markets, further fuelling domestic sales in August.
Globally, the growth in PHEV sales seen in China is being mirrored elsewhere, as negative sentiment towards fully electric vehicles pushes consumers towards hybrid alternatives.
Rho Motion’s Evaluation, a look to the future
This year is shaping up to be a record-breaking one for Chinese EV sales. Rho Motion Data Manager, Charles Lester, commented, “China surpassing one million EV sales in a month is just the beginning. We anticipate this milestone to be reached multiple times before the end of the year, potentially every month.”
Lester added, “Sales typically surge in the latter half of the year.”
With China’s EV sales projected to hit 10.5 million units by the end of the year, surpassing the one million mark is a significant indicator of the market’s strength and continued growth.
More information
For more information about EV sales and global EV trends see our EV production and sales reports.
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