Car sales in China increased by 14.4% year-over-year (YOY) in March, driven by strong demand for electric vehicles (EVs) and plug-in hybrids.
Despite ongoing deflationary pressures in the world’s largest auto market, government-subsidized trade-in programs provided a significant boost to sales, particularly in the EV sector.
Passenger vehicle sales reached 1.97 million units in March, with total sales for the first quarter rising by 6.1% to 5.18 million units, according to data from the China Passenger Car Association (CPCA). Notably, sales of EVs and plug-in hybrids surpassed those of gasoline cars for the first time in four months, accounting for 50.4% of overall sales in March.
The government’s trade-in program, similar to the U.S. “cash-for-clunkers” initiative, offered higher subsidies for EVs and contributed to the growth. By early this year, the program had already covered 2 million vehicles, helping households overcome financial caution amid concerns about jobs and income.
Chinese EV leader BYD outpaced Tesla in global EV deliveries for the second consecutive quarter in the January-March period. BYD’s aggressive pricing strategy, initiated in February, sparked a price war, with automakers like Leapmotor, Geely, and Toyota offering affordable smart driving technology as standard on their new cars.
However, a fatal crash involving Xiaomi’s SU7 sedan in late March raised concerns about the safety of smart driving systems. Xiaomi founder Lei Jun has promised to address public concerns following the incident. The company, which launched the SU7 last year, also raised its 2025 EV delivery target to 350,000 units in mid-March.
Despite the surge in domestic sales, car exports from China fell 8% in March, reversing a previous 11% increase in February.
