China’s electric car boom is increasingly more about hybrids

BEIJING – Hybrid vehicles are proving more popular than battery-only ones in China, even as consumers move away from gas-only cars, full-year data show.

BYDby far the market leader, said in a deposit on wednesday sold about 4.3 million passenger cars in 2024. Almost 2.5 million of those vehicles were hybrids, a reversal from 2023 when BYD sold slightly fewer hybrid cars than battery-only vehicles.

Teslawhich sells battery-only cars, is on track to sell more than 600,000 vehicles in China for a second consecutive year, according to CNBC calculations of data from the China Passenger Car Association. Elon Musk’s car company is expected to release 2024 figures in the morning hours of the United States on Thursday.

“We’re still seeing growth in the Chinese market in terms of battery electrics, but we’re seeing some sort of capping,” said Joe McCabe, president and CEO of AutoForecast Solutions. He predicts that by 2031, there will still be demand for vehicles based on internal combustion engines, including hybrid cars.

Close behind Tesla is Carwith a record 500,508 vehicle shipments last yearthe company said in a filing Wednesday. Most of the company’s cars come with a fuel tank to extend the driving range of the battery.

Stellar‘Chinese Association, Jump enginewhich sells both battery and hybrid cars, he said delivered nearly 300,000 cars by 2024and aims to provide 500,000 in the year ahead.

Chinese electric car startups that have so far only sold purely battery-powered vehicles ranked lowest in full-year shipments. Electric car manufacturer Zeekr sold 222,123 battery-powered vehicles, No sold 221 970 and Xpeng sold 190,068.

The final tally for Nio and Xpeng for the year includes figures for the companies’ lower-priced brands, which will begin shipping in the second half of 2024.

Xpeng in November revealed its own range extender hybrid systemwhile Zeekr in August announced plans to launch its first hybrid car in 2025.

Electric car brands have faced stiffer competition in the past year with smartphone company Xiaomi launching its SU7 electric sedan in March. At the end of December, Xiaomi said it had already delivered more than 135,000 cars and set a goal of delivering 300,000 cars by 2025.

Zeekr has set a target of 320,000 deliveries by 2025, after narrowly missing its 230,000 object reported cars in 2024.

China’s push to develop its own electric cars reached a tipping point in July, with the share of new energy vehicles sold. they accounted for more than half of all passenger cars sold that monthaccording to the passenger car association. New energy vehicles include battery-only cars and hybrids.

The trend persisted until November, which saw a penetration rate of 52.3%according to the data of the association. In July 2023, the penetration rate was 36%.

When looking at market growth, it’s important to remember that China still has plenty of incentives for locals to buy new energy vehicles, McCabe said. He added that the market push is part of China’s efforts build domestic players instead of relying on foreign brands.

Cities like Beijing are making it easier for residents to get license plates for new energy vehicles rather than gasoline-powered cars. Part of China’s efforts to increase consumption in recent months has focused on subsidizing purchases of new energy vehicles.

Hybrids also led light vehicle sales in the U.S. in the second quarter, bringing combined penetration of hybrid and battery-electric cars at 18.7%according to Wards Intelligence data published by the US Energy Information Administration.