China's EV Sector Relies on Exports as Domestic Demand Softens

In August, sales of new energy vehicles (NEVs) in China reached 1.64 million units, marking a 17.8 per cent year-on-year increase. Pure electric vehicles (BEVs) drove this growth with 1.16 million units sold, while plug-in hybrids (PHEVs) stagnated at 482,000 units. Cumulative sales for the first eight months of the year totaled 10.65 million units.

Domestic demand for passenger NEVs declined by 8.2 per cent in August, contributing to an overall domestic sales drop of 4.6 per cent. Conversely, the commercial NEV sector grew by 56.6 per cent to 103,000 units. Total vehicle sales in China fell 5.1 per cent year-on-year to 2.7 million units, highlighting a weakening domestic market.

Exports have become a primary growth pillar for Chinese manufacturers. In August, NEV exports reached 526,000 units, a 130 per cent increase compared to August 2025. For the first eight months of the year, cumulative exports hit 3.44 million units, representing a 124 per cent rise year-on-year. Plug-in vehicles accounted for 52.1 per cent of all exports in August.

Government targets for 2030 aim for NEVs to represent 70 per cent of domestic passenger car sales and 40 per cent of commercial vehicle sales. Additionally, authorities project that NEVs will comprise 30 per cent of the total vehicle fleet in China by 2030. Production in August reached 1.65 million units, slightly exceeding sales figures.