Domestic sales are expected to grow about 20% to more than 12 million units. Rapid growth of the Chinese electric industry threatens German, Japanese and North American brands.
For the first time, sales of electric cars are expected to surpass those of cars with internal combustion engines in China in 2025, according to industry data, illustrating the rapid advancement in the Asian country.
China is expected to surpass international forecasts and Beijing’s official targets, with domestic sales of electric vehicles — including pure batteries and hybrids — at grow by around 20% for more than 12 million unitsin 2025, according to estimates from investment banks and research groups cited by the British newspaper.
The number would be more than double the 5.9 million sold in 2022.
The forecasts are from investment banks UBS and HSBC and research groups Morningstar and Wood Mackenzie.
These forecasts imply that, in the coming years, the factories installed in China to produce tens of millions of cars with traditional engines will have practically no demand in the Chinese market, according to analysts, who also highlighted that the rapid growth of the Chinese electric vehicle industry now threatens German, Japanese and North American brandswhich have dominated the global car market for several decades.
A share of foreign brands in the Chinese market fell to a historic low of 37% — a sharp decline from the 64% recorded in 2020 — as electric vehicle sales grew by about 40%, in 2024, year over year.
Major German manufacturers, including BMW, Mercedes-Benz and Porsche, reported falling profits as sales in China struggled.
This month alone, the North American General Motors reduced the value of its business in China by more than five billion dollars (4.8 billion euros). The owner of Porsche for a reduction of its stake in Volkswagen of up to 20 billion euros, while Japanese rivals Nissan and Honda for a merger, to respond to a “drastically changing business environment”.
Vincent Sun, a securities analyst who covers the Chinese auto sector for investment research group Morningstar, noted that Several multinational carmakers, including Germany’s Volkswagen, will not launch new electric models in China until the end of 2025 or 2026.
HSBC estimated that around 90 new car models were launched in China in the fourth quarter of 2024 — about one per day — almost 90% electric.
In October, the Chinese giant BYD in terms of quarterly revenue, positioning itself as leader in a market once dominated by Elon Musk’s company.
In the third quarter, the Chinese giant recorded record revenue of 201 billion yuan (almost 26 billion euros), surpassing Tesla by around 2.7 billion euros.
Mass battery production in China is the main factor behind falling electric car prices.
