EVs and PHEVs Outsell Gas Cars in China for the First Time

EVs and PHEVs made up a record half of car sales in China in July, the first time this milestone was achieved in the world’s largest auto market.

Sales of EVs and PHEVs – what China calls new energy vehicles (NEVs) – jumped 37% year-over-year in July, achieving a record 50.7% of car sales, according to data from the China Passenger Car Association (via Reuters). That’s a rise of 28.6% from June, with a 14.4% jump in EVs.

The rapid growth in China has been astounding – three years ago, NEV sales accounted for just 7% of total vehicle sales – and government incentives are making a big impact.

China saw a total of 1.73 million passenger cars (including gas) sold in July 2024 – a 3.1% decrease year-over-year. So in order to boost car sales, in late July, the Chinese government doubled cash incentives for EVs to 20,000 yuan ($2,785) and made them retroactive to April, when they were first announced.

Plus, NEVs are exempt from sales tax up to 30,000 yuan ($4,175) in 2024 and 2025. There’s also the government scrappage scheme, which provides consumers who replace their gas cars with NEVs with 20,000 yuan ($2,540).

Some cities are also relaxing car purchase restrictions. Beijing announced in July that it would expand its NEV license quota by 20,000, the first time it’s done so since the capital city launched its strict car quota in 2011 to reduce air pollution and traffic congestion.