Revved-up year for NEV biz

China is on the cusp of leading the global transition to electric vehicles with sales overtaking fossil fuel-powered cars in 2025 and outperforming other countries, said a recent report by the UK-based Financial Times, citing assessments from four investment banks and research institutes.

The report forecasts that EV sales in China will grow 20 percent year-on-year to exceed 12 million units in 2025. Meanwhile, sales of traditional fuel-powered vehicles will drop to under 11 million units, an annual decline of over 10 percent. The report underscores the fact that EV sales have surpassed both domestic and global expectations.

"The development of new energy vehicles — of which EVs make up the lion's share — in China is progressing rapidly. The country also leads globally in battery technology, boasts a highly developed industrial chain, and car manufacturers are boldly applying advanced technologies at the application end, continuously exploring new frontiers in automotive intelligence," said Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers.

Chen said the transition from traditionally powered cars to NEVs in other countries is relatively slower, with Japanese companies taking a conservative approach toward the development path of pure electric vehicles, leaning more toward hybrid vehicles, hydrogen-powered cars and those using solid-state batteries.

Moreover, after Germany ended subsidies for NEVs in 2023, NEV progress in Europe decelerated. Chen highlighted that Europe's NEV industry chain manufacturing falls short of demand, prompting local companies to collaborate with Chinese manufacturers.

Cui Dongshu, secretary-general of the China Passenger Car Association, said that the growth rate of NEVs in China has outpaced the global average rate, with China holding a significant share in the global market for new energy passenger vehicles. In 2021, China maintained a 52 percent global market share, which increased to over 63 percent in 2022,64 percent in 2023 and continued to remain around 69.6 percent from January to November 2024.

According to the CAAM, on Nov 14, the annual production of NEVs in China exceeded 10 million units for the first time, making China the first country to achieve such a feat.

Looking at the specific sales data of individual companies, BYD's NEV sales in 2024 reached 4.27 million units, a year-on-year increase of 41.26 percent. Seres' sales of NEVs this past year were 426,885 units, a yearly increase of 182.84 percent. NIO delivered about 222,000 units in 2024, up 38.7 percent. XPeng delivered about 190,000 units in 2024, surging 34 percent, and Li Auto's total deliveries last year reached about 500,000 units.

"Based on the strong growth in the production and sales of NEVs this year, it is estimated that China's total annual auto sales in 2024 likely surpassed 31 million units. Among them, sales of NEVs are estimated to have exceeded 13 million units, a significant increase from the previous forecast of 11.5 million units," said Chen.

"Looking ahead to 2025, challenges still exist, one of which is the increasingly fierce domestic market competition. While the industry's supply capacity is strong, companies' profitability is not particularly robust. We need to be vigilant about potential cash flow issues that car companies may face," Chen said.