In July, the largest auto market in the world, China, had record-breaking sales of cars with EVs and PHEVs making up half of all sales.
According to data from the China Passenger Car Association, sales of new energy vehicles (NEVs), also known as plug-in hybrid electric vehicles (PHEVs) and electric vehicles (EVs), rose 37% year over year in July to reach a record 50.7% of total car sales. That represents a 28.6% increase over June with a 14.4% increase in EVs.
Three years ago, NEV sales made up just 7% of all vehicle sales in China. The country’s rapid development is remarkable, and government incentives are having a significant effect.
In July 2024, 1.73 million passenger cars (including gas) were sold in China, a 3.1% decline from the previous year. So in order to raise car sales, in late July, the Chinese government doubled cash inducements for EVs to 20,000 yuan ($2,785) and made them retroactive to April, when they were first declared.
Plus, NEVs are released from sales tax up to 30,000 yuan ($4,175) in 2024 and 2025. There’s also the government scrappage scheme, which supplies consumers who replace their gas cars with NEVs with 20,000 yuan ($2,540).
Some cities are also moderating car purchase conditions. Beijing declared in July that it would extend its NEV license quota by 20,000, the first time it’s done so since the capital city started its strict car quota in 2011 to diminish air pollution and traffic congestion.
