The Blubber

The electric vehicle (EV) revolution isn’t on its way—it’s already here, and nowhere is this more apparent than in China. In just a few years, the world’s largest automotive market has upended the dominance of internal combustion engine (ICE) vehicles. Sales of EVs, plug-in hybrids (PHEVs), and hybrids are steadily eroding the market share of traditional gas-powered cars. By 2025, EVs alone are projected to outsell ICE vehicles for the first time.

EV Sales Are Soaring

According to forecasts from UBS, HSBC, Morningstar, and Wood Mackenzie, EV sales in China are expected to hit 12 million units in 2024—a 20% increase from 2023. At the same time, ICE vehicle sales are predicted to plummet by 10%, falling below 11 million units. If these predictions hold, EVs won’t just overtake ICE cars—they’ll far surpass government targets.

China’s government set a goal in 2020 for EVs to make up 50% of new car sales by 2035. At the current pace, this milestone will be reached a decade ahead of schedule.

EV Market Milestones

By 2025, electric vehicle sales are projected to continue their meteoric rise, possibly exceeding 18 million units annually by 2034, according to data from The Financial Times. During the same period, ICE sales are expected to nosedive, potentially dropping to just 2.93 million by 2034.

Plug-in hybrid sales are also set to hit a new high, with an estimated 4.39 million units sold in 2025 and a potential peak of 6.05 million in 2033. Meanwhile, traditional hybrids are predicted to maintain steady but modest sales, ranging between 730,000 and 1 million units annually over the next decade.

However, while strong EV sales are expected well into the future, increasing market competition may force weaker players out as the industry consolidates.

The EV Market Faces Growing Pains

“China’s domestic EV sector is clearly flourishing, but it’s also facing challenges like slowing growth from a high base, oversupply of models, fierce competition, and a price war,” says HSBC analyst Yuqian Ding. “The longer-term trajectory is clear—China’s EV juggernaut is unstoppable.”

While the EV market evolves into a high-stakes battle for survival, the winners will likely be automakers that can deliver quality vehicles at the best prices.

China’s shift to EVs also has implications for ICE vehicle factories, which could soon find little domestic demand for their output. Foreign automakers are already feeling the squeeze, with their market share dropping from 64% in 2020 to just 37% in 2024.

The EV revolution in China is not only reshaping the domestic market but also setting the stage for a global transformation in the automotive industry.