[Breaking News] China Auto Industry 2025: Record Sales of 34.4 Million Units - Strong NEV Expansion and Future Challenges

Riskmonster, Inc. (Headquarters: Chuo-ku, Tokyo; President and CEO: Taichi Fujimoto, hereinafter "Rismon"), which provides credit management cloud services for corporate members, has announced the "China Auto Industry Flash Report 2025." Background of the Survey Automobile sales in China (including exports) in 2025 reached a record high of 34.4 million units, marking the 17th consecutive year as the world's largest. Above all, the sales volume of New Energy Vehicles (NEVs) grew significantly, accounting for 47.9% of the total at 16.49 million units, indicating that they have become the mainstream in the Chinese auto industry. In this report, we organize the factors supporting this market expansion and outline the challenges that could affect future growth, such as intensifying trade friction, fierce price competition, and tight financing. Survey Results Summary - Automobile sales in China (including exports) hit a record high of 34.4 million units (+9.4% YoY). - NEV sales were 16.49 million units (+28.2% YoY), making up 47.9% of total sales. - In the global EV (*) sales ranking, three Chinese companies ranked in the top tier, expanding the presence of NEV exports. * Battery EV (BEV) and Plug-in Hybrid (PHEV) combined, aggregated by CleanTechnica - Continued movements of reorganization and elimination due to overlapping trade friction and price competition. - Enhancement of technological development and safety measures, and establishment of mass production systems. ▼ For details of this survey, please visit the "Rismon Survey" website. https://www.riskmonster.co.jp/study/research/ Survey Results Factors behind the strong performance of the Chinese auto industry (1) New Energy Vehicles (NEVs) drive automobile exports China's automobile exports in 2025 reached 7.098 million units (+21.1% YoY), surpassing 7 million units for the first time. Among them, gasoline vehicle exports slightly stagnated with a 2.0% decrease YoY, whereas NEV export volume roughly doubled YoY, expanding to account for one-third of total exports. China's auto exports are shifting from traditional gasoline-centric to NEV-centric. (Figure 1) Furthermore, comparing auto export volumes between Japan and China, since China surpassed Japan in 2023, the gap has been widening, likely due to technological innovation in the NEV sector and the improved competitiveness of Chinese brands. (Figure 2) (2) Over 50% of domestic sales in China are NEVs Of the 27.302 million automobiles sold domestically in China in 2025 (+6.7% YoY), NEVs accounted for 13.875 million units (+19.8% YoY, 50.8% share), leaping into the mainstream. In addition to government purchase support measures, the diversification of vehicle models and the development of charging infrastructure are believed to have boosted NEV sales. (3) Chinese NEV makers show presence globally In the 2025 global EV (BEV+PHEV, CleanTechnica aggregate) sales ranking, China's BYD maintained the top spot, while Geely and Wuling also ranked high. Ten Chinese makers ranked in the top 20, suggesting that Chinese companies are increasing their presence in the electrified vehicle market. (Figure 3) Status of various countries' makers in the Chinese auto market (4) Shrinking market share of foreign makers Against the 30.103 million passenger cars produced and sold domestically in China in 2025, the market share of Chinese makers reached 69.5%, expanding their domestic sales share. On the other hand, the market share of foreign makers is shrinking across the board, with German makers down 2.5 points YoY, Japanese makers down 1.5 points, American makers down 0.5 points, and Korean makers down 0.1 points. (Figure 4) Looking at the new car sales of three Japanese makers in China, Toyota Motor Corporation (Toyota), Nissan Motor Corporation (Nissan), and Honda Motor Co., Ltd. (Honda) all saw YoY declines in 2024. However, in 2025, Toyota saw a 0.2% increase YoY (1,780,400 units), turning positive for the first time in four years since 2021, albeit slightly. On the other hand, Nissan and Honda decreased by 6.3% (653,024 units) and 24.3% (645,345 units) YoY, respectively, indicating a continuously severe situation (Figure 5). Amid a severe market environment including the shift to NEVs and price competition, Toyota's introduction of new NEV models supported its sales. It is believed that differences in responsiveness to NEVs, the main battleground of the Chinese market, and price competitiveness determined the diverging fates of these companies. Future challenges for the Chinese auto industry (5) Growth rate slowdown due to intensifying trade friction