China kept its lead as the world’s biggest electric vehicle market in 2025, and local companies grabbed even more space from foreign carmakers. The country sold almost 13 million electric cars and plug-in hybrids last year. That’s 54% of the whole market. The big sellers are Chinese companies like BYD and Geely, Tesla is the exception, and this helped local brands take nearly two-thirds of passenger car sales overall. Electric and plug-in vehicle sales went up 18% in China. Compare that to the U.S. and Europe, where the move away from gas cars has slowed down quite a bit. Chinese brands excel in incorporating smart vehicle features, and they’re quicker at updating their products, said Cui Dongshu, secretary-general of the China Passenger Car Association. The association will release 2025 sales data on Friday. “Overall, Chinese companies will continue to have a relatively clear advantage” over many foreign brands, he said. Xiao Feng works as an analyst at CLSA. He thinks electric and plug-in cars will eventually hit around three-fourths of the Chinese market. Most foreign automakers could get pushed out of China by 2030 or later, except for a few big names like Tesla, Toyota, and Volkswagen. For many other foreign carmakers, “it’s basically impossible for them to catch up in the EV space,” Feng told the Wall Street Journal. Things look different in America Changes in regulations and weak demand have pushed U.S. automakers to step back from EV plans. General Motors said Thursday it would take a $6 billion charge on its money-losing EV business. Ford announced $19.5 billion in charges in December, mostly tied to EVs. China sold 7.9 million pure electric vehicles last year. That’s about six times what the U.S. sold, around 1.3 million EVs in 2025, which stayed roughly flat from the year before, according to Cox Automotive. Foreign carmakers have been rushing to fix their China operations while trying to keep whatever market share they can. Last year, Volkswagen stopped making cars at a plant in Nanjing. General Motors said it would close plants. This week, GM said it expected about $1.1 billion in fourth-quarter charges connected to its China business. Even Tesla is having trouble, and it’s the only foreign brand with a real presence in China’s EV market. Its China sales dropped nearly 5% last year to about 626,000 cars, CPCA data showed. Around the world, Tesla lost the global electric vehicle sales crown to China’s BYD after reporting delivery drops for two years running. Volkswagen used to be the biggest foreign brand in China. It hopes to turn things around this year with models designed in China that took years to develop. Toyota is building a new Lexus EV plant in Shanghai. GM said all new products coming to China this year would have an EV or plug-in hybrid option. Ford and Nissan have started using China as an export hub to deal with too much production capacity. Competition is rough for everyone There are constant promotions and price cuts. A survey by the China Automobile Dealers Association found just 30% of car dealers made money in the first half of 2025. Almost three-quarters sold at least some cars below cost. Beijing has tried to get consumers to spend more by offering purchase subsidies. Last year, the subsidy went up to around $2,900 when buyers traded an old car for a new electric or plug-in vehicle. Around 11.5 million vehicles were purchased through the trade-in program in 2025, the government said. But some places ran out of money for incentives by December, the passenger car association said. That caused passenger car sales to fall about 14% in December to 2.3 million vehicles compared to a year earlier. Some consumers held back, hoping for a better deal this year, officials said. Beijing is trimming certain subsidies in 2026 though. China’s passenger car market last year grew at its slowest pace in three years. It expanded by around 4% to 23.7 million vehicles overall. The smartest crypto minds already read our newsletter. Want in? Join them .
