Sales of all types of electric vehicles in China rose by more than 40 per cent last year, while sales of petrol-powered cars fell, according to industry data.

A total of 31.4 million vehicles, including buses and trucks, were sold in China, the world's largest market in terms of auto sales, last year, with sales up 4.5 per cent from a year earlier, the China Association of Automobile Manufacturers reported. Sales growth outpaced production growth of 3.7 per cent.

China's passenger car exports are expected to increase by nearly 20 percent to around 5 million in 2024, making a significant contribution to the increase in China's overall exports.

Apart from that, exports of what China calls ‘new energy vehicles’, such as pure battery electric vehicles, fuel cell cars and rechargeable hybrids (electric vehicles with a small petrol-powered engine to supplement the batteries), reached 1.28 million. This represents an increase of 6.7 per cent compared to 2023.

The expansion of Chinese electric vehicle manufacturers overseas has alarmed carmakers in the US and Europe. The US imposed 100 per cent tariffs on Chinese-made electric cars last year and the European Union hit China-based electric vehicle makers with new tariffs, saying the sector was benefiting from unfair government subsidies.

Domestically, passenger car sales rose 13.6 per cent in December, partly on the back of support from trade-in rebates, pushing overall passenger car sales in China up 3.1 per cent for the year to 22.6 million.

Plug-in hybrids saw the fastest growth in 2024, attracting second-generation EV buyers concerned about buying pure electric vehicles or seeking the longer range that hybrids can provide.

China's electric vehicle sales continue to grow rapidly, at odds with the US and Europe, where growth is slowing.

Sales of conventional petrol and diesel-fuelled vehicles fell 17 per cent in 2024, from 14 million to 11.6 million. They accounted for 51 per cent of total new vehicle sales.

The decline in demand for fuel-powered vehicles is a hard blow to foreign carmakers such as Volkswagen AG and Nissan Motor Corp., which have been boosting profits for years by relying on strong demand in China.

They are scrambling to develop electric vehicles for the Chinese market. Honda and Nissan recently announced plans to merge to meet the challenge of China's rising electric vehicle makers.