The vitality of the automobile market continues to be released, and new energy vehicles become the main growth force

In the assembly workshop of Changan Automobile Digital Factory in Yubei District, Chongqing, new energy vehicles are about to roll off the assembly line.
Data from the China Association of Automobile Manufacturers show that in the first four months of this year, my country’s automobile production and sales reached 10.175 million and 10.06 million respectively, up 12.9% and 10.8% year-on-year respectively. This is the first time in the history of my country’s automobile production and sales that both exceeded 10 million vehicles in the same period.
“Since the beginning of this year, my country’s economy has shown a positive trend, and various macro policies have worked together to provide solid support for the stable growth of the automobile market.” Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, said that the introduction and implementation of policies such as “two new” and the continuous upgrading of corporate product technology have effectively promoted the continuous release of vitality in the automobile market.
New energy vehicles have become the main force of growth
Data show that in the first four months of this year, my country’s new energy vehicle production and sales reached 4.429 million and 4.3 million respectively, up 48.3% and 46.2% year-on-year respectively, and new energy vehicle sales reached 42.7% of the total new vehicle sales.
“New energy vehicles are becoming the main force driving the stable growth and transformation and upgrading of my country’s automobile market.” Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology, said that the rapid development of my country’s new energy vehicles is due to the industry enterprises’ hard work and determination to innovate, breaking through technical difficulties and improving product performance, which has been recognized by more and more consumers. It is also due to our insistence on global division of labor and cooperation, mutual promotion and progress, and the construction of a high-quality and efficient international industrial chain supply chain system.
In terms of product performance, the average cruising range of my country’s new energy vehicles is close to 500 kilometers. The rapid progress of intelligent assisted driving and human-computer interaction technology has made driving easier and more interesting. Active suspension, smart lighting systems and other configurations have been popularized from high-end cars to mass cars. New energy vehicles have become the first choice for more and more consumers.
“Recently, we have launched a total of 4 new cars, namely the modified NIO ES6, EC6, ET5, and ET5T. These 4 models are called ‘5566’ in the market and are the main models of NIO brand sales.” Li Bin, founder and chairman of NIO, said that NIO’s “5566” uses the self-developed Shenji NX9031 intelligent driving chip, and has achieved five major upgrades and evolutions in design, cockpit, driving control, intelligence, and safety, which is expected to bring users a comprehensive and advanced new driving experience.
Geely’s newly launched Galaxy Star 8 is equipped with the Shield battery safety system, which has achieved the industry’s first “oil, electricity, and gas isolation design” and “six horizontal and four vertical oil and electricity safety cabins” in “oil-electric symbiosis safety”. “Although Geely Galaxy’s sales in the first four months have exceeded 356,000 units, there are still many competitors in the mid-to-high-end electric hybrid market where Star 8 is located.” Gan Jiayue, CEO of Geely Auto Group, said that Geely Galaxy Star 8 should not only win new market competition advantages with “good price”, but also lead the high-quality development of the industry with high technology and high quality.
In the first quarter of this year, Xpeng Motors delivered 94,000 vehicles, a year-on-year increase of 330.8%, making it the sales champion of new energy vehicle brands in the first quarter. “The core reason is the continuous improvement of Xpeng Motors’ systematic comprehensive capabilities in organization, products, marketing, technology, and operations. It is also the initial result of our insistence on AI-driven technology and steady and long-term operations.” He Xiaopeng, founder and chairman of Xpeng Motors, said that Xpeng is carrying out AI-driven integrated innovation in more fields such as AI chassis, Turing AI assisted driving, and a new generation of smart cockpits. “Our growth potential has just begun to be released.”
In addition, in terms of industrial system, my country has built a complete and efficient industrial system covering the entire chain of basic materials, parts, complete vehicles, and manufacturing equipment, supplying 70% of battery materials and 60% of power batteries to the world. In terms of convenience, my country has built 12.818 million charging piles and 4,443 battery swap stations, forming the world’s largest charging network, and the fast charging technology of charging 80% in 15 minutes has been mass-produced. These industrial chain advantages and infrastructure construction have effectively promoted the production, sales and use of new energy vehicles.
Trade-in boosts market confidence
“I have wanted to buy a new car for a long time, but I have never made up my mind. After learning about the policy benefits, I placed an order without hesitation.” Recently, at a car sales store in Dalian, Liaoning, consumer Du Wei ordered a new energy vehicle and enjoyed the trade-in subsidy.
Since the state formulated the “Action Plan for Promoting Large-Scale Equipment Renewal and Consumer Goods Trade-in” in 2024, relevant departments have established a special working group to strengthen coordination and cooperation, and strengthen the linkage between the central and local governments. The trade-in of cars has played an important supporting role in promoting the steady growth of my country’s auto market and expanding consumption.
Compared with last year’s trade-in policy, this year’s policy expands the scope of scrapped cars from fuel passenger cars with national emission standards of III and below to fuel passenger cars with national emission standards of IV that meet the conditions. This is the first time that my country has expanded the subsidy for scrapped models for individual consumers to national IV models.
The policy “combination punch” of “scrap subsidy + replacement subsidy” and “national subsidy + local subsidy” can directly reduce the cost of car purchases and ignite consumers’ enthusiasm for replacement. The Ministry of Commerce recently released data showing that as of May 11, the number of applications for automobile trade-in subsidies in 2025 reached 3.225 million, of which 1.035 million were scrapped and updated, and 2.19 million were replaced and updated. Since the implementation of the automobile trade-in policy in 2024, the cumulative number of applications for trade-in subsidies has exceeded 10 million.
In addition to subsidies, some car companies have also increased their promotion efforts. In the experience stores of AITO and GAC Aion, sales staff said that consumers will be given points that can be exchanged for gifts in the official mall when they buy a car. If it is an old car owner who trades in, there will be additional points, making the discount “visible and tangible”.
“This year, the national trade-in policy was launched early, and the subsidy policy was in place in one step. Driven by the national consumption promotion policy, many places have introduced and gradually implemented corresponding consumption promotion policies, superimposed on the full launch of offline activities such as the increase in subsidies for OEMs, financial support, and auto shows.” Cui Dongshu, secretary-general of the Passenger Car Association of the China Automobile Dealers Association, said that overall, my country’s auto market began to strengthen from March. During the May Day holiday, the automobile consumption market ushered in a peak in passenger flow.
The car trade-in is not a simple “replacement”, but also a transformation and upgrading of consumption and industry. In the first four months of this year, new energy vehicles accounted for more than 53% of the car trade-in activities; the cumulative retail sales of new energy passenger cars reached 3.324 million, a year-on-year increase of 35.7%, and the market penetration rate reached 48.4%.
At present, the car trade-in policy has shifted from “flooding” to “precision drip irrigation”. Relevant experts said that the injection of more than 150 billion yuan of special treasury bond funds in 2025 will further expand the coverage of subsidies, and it is expected to drive automobile retail sales of more than 580 billion yuan throughout the year, promoting the continuous release of vitality in the automobile market.
Solve the problem of increasing revenue but not profits
On May 23, BYD launched a limited-time “one-price” or limited-time subsidy promotion, involving a total of 22 intelligent driving models of Dynasty Network and Ocean Network, with a maximum subsidy of 53,000 yuan.
Behind the vigorous promotion, BYD is working hard to advance its sales target in 2025. It is understood that BYD’s sales target this year is set at 5.5 million vehicles, a year-on-year increase of nearly 30%, of which the overseas sales target is about 800,000 vehicles.
In the first four months of this year, the “price war” in the domestic automobile market has turned from the previous fierce state to “moderate”. According to the data of the Passenger Car Association of the China Automobile Dealers Association, there were 65 models with price cuts in the first four months of this year, 56 fewer than the same period last year. “As a car company that has long occupied the top spot in the domestic automobile market sales rankings, BYD’s further price cuts will undoubtedly have a certain impact on the automobile market.” Cui Dongshu said.
“Industrial transformation is reshaping the global automobile competition landscape, and the dominant effect of the Chinese automobile market on the global automobile consumption trend is becoming more and more obvious. This is a reflection of the great progress and vitality and resilience of the Chinese automobile industry.” However, Liu Yan, deputy secretary-general of the China Automobile Association, said that through the recent series of new car releases and endless price wars, it is not difficult to find that product homogeneity and low prices are very obvious, and there are many hidden dangers in the internal competition. The heating up of industry competition will continue to put pressure on the profitability of enterprises. The industry and enterprises should have a clear understanding and response actions.
Although my country’s automobile production and sales achieved double-digit growth in the first four months of this year, data from the National Bureau of Statistics showed that the total retail sales of consumer goods was 16,184.5 billion yuan, a year-on-year increase of 4.7%; while social automobile consumption was 1,484 billion yuan, a year-on-year decrease of 0.5%. Among them, in the first quarter of this year, the profit margin of my country’s automobile industry was 3.9%, lower than the average profit margin of 5.6% of downstream industrial enterprises, and the gap has a trend of further widening.
Luo Lei, vice president of the China Automobile Dealers Association, frankly stated that the current automobile market as a whole presents the characteristics of “increase in volume but not in revenue, increase in revenue but not in profit”, and demand is still insufficient. Some cities with strong consumer demand and consumption capacity are also restricted by the purchase restriction policy. How to fully and reasonably release consumption potential and improve consumption quality is the primary problem facing the industry.
“At present, my country’s automobile industry is in a period of rapid transformation, and structural contradictions are also prominent. The main manifestations are the irrational industrial structure and the need to improve the mechanism for withdrawing idle production capacity. The iteration of technologies such as power batteries and intelligent driving is accelerating, and consolidating the advantages of the entire industrial chain also faces challenges.” Zheng Bei, deputy director of the National Development and Reform Commission, said that the National Development and Reform Commission will work with relevant departments to coordinate effective markets and effective governments, coordinate the cultivation of new momentum and the renewal of old momentum, coordinate the optimization of incremental growth and the activation of existing stocks, implement targeted industrial regulation, and promote the quality and upgrading of the automobile industry.