China’s Auto Market Hits Electric Milestone as Subsidies Stoke Demand

For the first time, more than half of all new cars sold in China were new-energy vehicles (NEVs) in October, marking a milestone in the country’s rapid transformation of its auto industry. The shift was propelled by brisk exports and strong domestic demand underpinned by government incentives.

Sales of NEVs — including all-electric models and plug-in hybrids — rose 20% year-on-year to 1.72 million units, making up 51.6% of the total vehicles sold, the China Association of Automobile Manufacturers (CAAM) said Tuesday. Overall auto sales for the month hit 3.32 million, an 8.8% increase from the prior year and the highest ever recorded for October.

The figures underscore the rapid adoption of electric mobility in the world’s largest auto market, a trend accelerated by government incentives. However, the industry’s heavy reliance on these policies, which are set to be scaled back, is creating uncertainty and fueling intense price wars that have industry bodies warning about the market’s long-term health.