China’s EV sales are set to overtake traditional cars in the West.

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Electric vehicles are expected to become the first cars with internal combustion engines to go on sale in China next year, a historic breakthrough, ahead of Western rivals in the world’s biggest car market.

China According to the latest estimates provided to the Financial Times, which compares international forecasts and Beijing’s official targets, domestic EV sales – including pure battery and plug-in hybrids – will grow by about 20 percent annually to more than 12 million cars by 2025 by four investment banks and research groups. The figure is more than double the 5.9mn sold in 2022.

At the same time, sales of conventionally powered cars are expected to fall by more than 10 per cent to less than 11mn next year, a nearly 30 per cent decline from 14.8mn in 2022.

Meanwhile, E.V Sales growth has slowed in Europe and the US, reflecting the auto industry’s slow adoption of new technology, uncertainty over government subsidies and protectionism against Chinese imports.

Robert Liu, director of Asia-Pacific renewables research at Wood Mackenzie, said China’s EV chapter has demonstrated its success in domestic technology development and securing global supply chains for critical inputs for EVs and their batteries. The scale of the industry means lower production costs and lower prices for consumers.

“They want to electrify everything,” Lieu said. No other country comes close to China.

While the pace of China’s EV sales growth has slowed from the post-pandemic frenzy, forecasts suggest Beijing’s official target for 2020 will cover 50 percent of car sales by 2035, 10 years ahead of schedule. . Norway leads the world in EV sales as a market share, with more than 90 percent of new cars powered by batteries.

The industry forecast was provided to the FT by investment banks UBS and HSBC, as well as research groups Morningstar and Wood Mackenzie.

Factories set up to produce tens of millions of cars with traditional engines in China over the next decade have virtually no domestic market.

They also highlight how the rapid growth of China’s EV industry threatens the national manufacturing champions of Germany, Japan and the US.

While China’s EV market is on track to grow nearly 40 percent by 2024, the market share of foreign-branded cars has fallen to a record low of 37 percent — down from 64 percent in 2020. Data from Automobility, a Shanghai-based consultancy.

This month alone, GM wrote down more than $5 billion in business value in China; The holding company behind Porsche has warned of a record write-down of up to €20bn in Volkswagen shares. And rivals Nissan and Honda said they were responding to a “highly changing business environment”. with integration.

Chinese carmakers face their own internal competition. Yuqian Ding, a senior analyst based in HSBC’s Beijing, said that while EVs are part of the “strategic importance” of China’s new, high-tech economy, intense competition is expected to “squeeze” more players out of the market as in the industry. Strengthened.

“While China’s domestic EV sector is clearly booming, its growth is being slowed down by – a very high base – oversupply, intense competition and price wars,” she said. “Long-term direction of travel is clear – China’s EV juggernaut is unstoppable.”

According to Tu Le, founder of consultancy Sino Auto Insights, the industry is only at the “beginning” of an unprecedented period of upheaval.

Vincent Sun, an equity analyst who covers China’s auto sector for investment research group Morningstar, said several global automakers, including Germany’s Volkswagen, did not wait until late 2025 or 2026 to release major new EV models in China.

HSBC said in the fourth quarter of 2024, about 90 new car models were scheduled to be released by manufacturers in China – about once a day – and about 90 percent of them were EVs.

Still, Paul Gong, head of China automotive research at UBS, warned that there was some uncertainty about China’s broader economic policy heading into 2025, and that the market would have a “weak start to the year” after 2024.

However, he added, “We . . . In the year A sharp increase in purchases by the end of 2025, an end to subsidies and a 5 percent purchase tax on electric vehicles by 2026 – compared to 0 percent until the end of 2025.

Further report of Richard Mille in Oslo