According to the Financial Association News on December 27 (Editor: Xiaoxiang), it is expected that by next year, the annual sales of electric vehicles in China will first exceed those of RBOB Gasoline cars. This is seen by some overseas institutions as a historic milestone: indicating that China, the largest auto market in the Global market, is years ahead of Western competitors in the electrification transformation.

According to estimates provided to the media by four investment banks and research institutions—UBS Group, HSBC, Morningstar, and Wood Mackenzie—the sales of electric vehicles in China, including pure Battery and plug-in hybrid vehicles, are expected to further increase by approximately 20% year-on-year by 2025, reaching over 12 million units. This figure is expected to exceed previous industry forecasts and will more than double the sales of 5.9 million units in 2022.

At the same time, these institutions' estimates also show that the sales of traditional RBOB Gasoline vehicles are expected to decline by more than 10% year-on-year next year, dropping to less than 11 million units. Compared to the 14.8 million units sold in 2022, the decline will reach nearly 30%.

In fact, from monthly and quarterly data, the sales of new energy vehicles in China have already surpassed those of RBOB Gasoline vehicles in July and the third quarter for the first time.

Statistics from the Passenger Vehicle Market Information Joint Conference of China Auto Circulation Association show that in July, the national retail sales of passenger vehicles reached 1.72 million units, among which the retail sales of conventional RBOB Gasoline vehicles were 0.84 million units, and the retail sales of Electric Vehicles were 0.878 million units. This marks the first time that monthly retail sales of domestic Electric Vehicles have surpassed those of RBOB Gasoline vehicles.

Additionally, in the third quarter of this year, the share of new energy vehicles in retail sales broke the half mark for the first time, reaching 52.8%.

Robert Liew, Director of Renewable Energy Research for the Asia-Pacific region at Wood Mackenzie, stated that the milestone of electric vehicle sales surpassing those of oil vehicles marks China's success in domestic technology development and securing the global supply chain for critical resources needed for Electric Vehicles and their Batteries. The scale of this Industry means significantly lower manufacturing costs and a decrease in consumer purchase prices.

They hope to electrify everything, and no other country can be compared to China, Liew remarked.

Western auto manufacturers are slow to transform.

The outstanding achievements of China's auto industry in the electrification transformation have increasingly made these overseas institutions lament the slow actions of Western auto manufacturers.

In recent years, the sales growth of electric vehicles in Europe and the USA has slowed down, reflecting the slow acceptance of new technologies by the traditional Western auto industry, uncertainties in government subsidies, and the rise of protectionism against Chinese imported cars.

These institutions stated that the aforementioned forecasts indicate that in the next decade, factories established in China producing millions of traditional RBOB Gasoline vehicles will find it extremely difficult to stand in the Chinese market. They also highlighted the challenges that the rapid rise of China's Electric Vehicles industry may pose to overseas auto manufacturers.

According to data from the consulting firm Automobility, as the Chinese Electric Vehicles market achieved nearly 40% year-on-year growth in 2024, the market share of foreign brand cars sharply declined from 64% in 2020 to 37%, hitting a historic low.

Vincent Sun, an Analyst responsible for the Chinese auto industry at Morningstar, pointed out that several multinational auto manufacturers, including Germany's Volkswagen, are expected to introduce major new electric vehicle models in China by the end of 2025 or in 2026.

This evidently forms a stark contrast to the rapid innovation speed of Chinese auto manufacturers. HSBC previously estimated that Chinese auto manufacturers plan to launch about 90 new models in the fourth quarter of 2024, approximately one a day, of which nearly 90% are Electric Vehicles.

Of course, these Institutions also mentioned that as the competition in the Electric Vehicle sector intensifies, Auto Manufacturers in China will face increasingly fierce internal competition. Senior Analyst Yuqian Ding at HSBC in Peking stated that while Electric Vehicles are now considered "strategically important" in China's emerging high-tech economy, intense competition is expected to "squeeze out" more participants with industry consolidation.

"Although the domestic Electric Vehicle Industry in China is clearly thriving, it also faces the issue of slowing growth: the high base - oversupply of models, fierce competition, and price wars," however, she also stated that "the long-term development direction is very clear - the Chinese Electric Vehicle giants will be unstoppable."