Growth momentum in the mainland car market may shift from battery-powered to petrol-based models this year on account of a revised subsidy policy, exacerbating a bearish profit outlook for the country’s 50-odd electric vehicle (EV) builders.
Slower growth in EV adoption would deal another heavy blow to assemblers from BYD to Leapmotor, which are known for low-priced cars, after big-name international banks reduced forecasts for car deliveries this year.
“Petroleum-powered cars will regain market share this year,” said Zhao Zhen, a sales director at Shanghai dealer Wan Zhuo Auto. “EV brands are under pressure to spur sales.”
According to data from the China Passenger Car Association (CPCA), 117,000 EVs, comprising pure electric and plug-in hybrid vehicles, were sold across mainland China in the first 11 days of the year, accounting for 35.7 per cent of total national car sales.
The percentage stands in stark contrast with an EV penetration ratio of 54 per cent across 2025.
Under Beijing’s new EV subsidy programme, buyers of an EV for replacement purposes get a subsidy equivalent to 12 per cent of the newly bought car’s price from January 1, which is capped at 20,000 yuan (US$2,868). The policy was put in place by the National Development and Reform Commission and the Ministry of Finance.
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