China decade ahead target, selling more electrified cars than ICE in 2025

China is firmly on track to sell more ‘electric’ cars—that is, EVs and plug-in hybrids—than pure traditional gas cars with internal combustion engines (ICE) in 2025, reaching its 50% electric target a decade before the deadline the government had set by 2035.

According to The Financial Times (FT) analysis, so-called New Energy Vehicle (NEV) sales will grow about 20 percent year on year to more than 12 million cars in 2025, while sales of ICE cars are expected to fall by more than 10 percent to less than 11 million.

The newspaper bases its estimates on projections by four investment banks and research groups. These include UBS, HSBC, and investment groups Morningstar and Wood Mackenzie.

Astonishing progress

According to analysts, the pace at which the Chinese automotive industry has managed to recover from the COVID crisis in 2020 and turn its considerable arrears in the conversion to electric it had compared to Europe into a clear edge is astonishing.

In 2020, China was still early in its EV transition. Only 5.4% of China’s car market was ‘NEV’ then, far behind some European countries and American forerunner California and only just above the 4.6% global average that year.

ICE sales ban by 2035

At that time, the EU considered banning gas cars entirely by 2035, as California will likely do. The new British government is holding to the initial target of 2030, even reversing the former conservative government’s attempt to postpone it to 2035.

Despite being an oil-producing country, Norway was the most ambitious, with a target of 100% electrified car sales by 2025. This target is about to be achieved, as it was over 90% in 2024. In September, 96.4% of all new car registrations in the country were fully electric vehicles.

Ten percent less ICE cars

The Chinese government, however, had set only a target of 50% of New Energy Vehicles for 2035 and recently adjusted that to 2027. However, with today’s prognoses, NEV sales will reach that target by next year. Pure ICE car sales will plunge 10 percent next year to less than 11 million, nearly 30 percent from 14.8 million in 2022.

The Financial Times quotes Robert Liew, Asia Pacific Director at Wood Mackenzie, who says the Chinese secured their success by developing domestic technology and securing global supply chains for critical resources needed for EVs and their batteries. This results in lower consumer prices, with EVs being sold in China at half the price of EVs sold in Europe.

No domestic market sales

In China, this will result in the factories still building millions of ICE cars today, with almost no domestic market sales in the near future. Foreign carmakers like premium European brands, who used to make their most significant profits in the world’s biggest car market, are seeing their market share fall to a record low of 37 percent in 2024.

FT says that’s a sharp decline from 64 percent in 2020, according to data from Automobility, a Shanghai-based consultancy. Conversely, China became the top global exporter of automobiles this year, a title that Japan could claim for decades.

Meanwhile, the Western automotive industry is cramped, with most carmakers —except for brands doing well like BMW, Volvo, or Tesla—lobbying in Europe to loosen CO2 targets for 2025 and even postpone the ICE ban beyond 2035. In America, the prospects of returning President Donald Trump shouting from rooftops that he will stop the energy transition predict little good.