China’s EV sales slide again amid fading incentives, weak demand and persistent price war
Deliveries of electric vehicles (EVs) in China fell 3.9 per cent in July from a year earlier, extending their decline to a seventh consecutive month as fading government incentives and weaker consumer demand weighed on the market. Domestic sales of pure electric and plug-in hybrid vehicles last month also fell 5.8 per cent from June, according to data from the China Passenger Car Association…
China's electric vehicle (EV) sales declined 3.9% in July compared to a year ago, marking the seventh consecutive month of decrease, as government incentives diminished and consumer demand waned. The decline in domestic sales of pure electric and plug-in hybrid vehicles was 5.8% from June, according to the China Passenger Car Association (CPCA). Industry experts warn that the bleak market outlook could force many small EV companies to close down, as some might resort to price cuts to boost sales in the months ahead.
The broader automotive market in mainland China, encompassing both gasoline-powered and EVs, saw a significant year-on-year drop of 20.9% in July, with overall deliveries hitting 1.46 million units. EVs constituted 65.1% of total car sales in the month. Analysts anticipate another round of price cuts, as nearly all manufacturers strive to reduce inventory. From January to July, Chinese carmakers shipped a total of 5.67 million EVs, marking a 12.5% decline from the previous year.
In June, AlixPartners, a global consultancy, projected a 10% drop in China's car deliveries, including exports, to 24.6 million units this year, due to a weakening economy and reduced government support. The consultancy also noted that weak sales may spark a deeper price war in the latter half of the year, given the overall auto industry's profitability in mainland China.
Chinese manufacturers selling vehicles priced at 100,000 yuan (approximately US$14,825) are currently witnessing meager net earnings of about 1,500 yuan on average, equating to a profit margin of just 1.5%. Industry officials predict that dozens of underperforming players may exit the market in the years to come, with only seven out of 30 EV-focused Chinese automakers expected to remain profitable by 2030, according to Stephen Dyer, AlixPartners' Asia-Pacific leader for automotive and industrial practices.
BYD, the world's largest EV manufacturer, reported a 4.9% rise in domestic sales to 239,370 units in July, compared to a 9% decrease from July 2025. Meanwhile, EV exports from China surged by 147.8% year-on-year to 540,000 units in July.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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