Weaker Demand Slows China’s Energy Vehicles Growth To 12% in July From 20% in June
August 08, 2025
Continued weaker demand for hybrid vehicles slowed the growth in China’s new energy vehicles to 12% in July from nearly 20% in June, according to official Chinese data published on Friday.
Overall Chinese car sales also saw weaker growth last month, as the government is trying to tackle the overcapacity in the vehicle manufacturing sector, which has led to price wars and losses for many automakers.
Total car sales in China grew by just 6.9% in July, compared to an 18.6% annual rise in June, per data from the China Passenger Car Association cited by Reuters.
Sales of hybrids only, including plug-in and extended-range hybrids, dropped by 3.6% in July from a year earlier, amid rising battery electric vehicle sales as battery technology and range improved.
Despite the slower growth in new energy vehicles – BEVs and hybrids combined – these still outsold conventional gasoline-fueled vehicles, for a fifth consecutive month.
The higher demand for BEVs helped some manufacturers post record sales in July—these include Leapmotor, Xpeng, and Xiaomi.
However, market leader BYD, which relies on hybrids for a large part of its sales, reported a third straight month of weaker sales in China in July.
BYD’s share of the new energy vehicle market dropped to 27.8% last month from 35.4% in July 2024 which is weaker than ever.
The car manufacturing industry in China has been struggling with overcapacity and price wars in recent years. Overcapacity has been a persistent issue in China’s clean technology industries, undermining the profitability of solar panel and EV manufacturers.
The government is trying to remedy the situation with measures to curb excess capacity.
In the EV market, “fierce competition among EV and battery manufacturers in China for state-based incentives has led to a sharp decline in EV and battery prices, helping scale deployment, but has led to massive overcapacity in batteries,” research firm Rhodium Group said in a report in June.
The overcapacity, while helping global EV expansion, is undercutting new entrants.
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