By Yoko Kubota
BEIJING -- China cemented its global lead in electric vehicles in 2025 with local brands grabbing further share from foreign carmakers in the world's biggest car market.
Nearly 13 million full EVs and plug-in hybrids were sold in China last year, accounting for 54% of the market. Because the leading EV makers -- apart from Tesla -- are Chinese companies such as BYD and Geely, the electrification trend helped Chinese brands take nearly two-thirds of the passenger-car market.
Sales of EVs and plug-ins collectively rose 18% in China, marking a contrast with the U.S. and Europe where the transition away from gasoline-powered cars has slowed.
Chinese brands tend to be strong in intelligent-vehicle features and faster when it comes to updating products, said Cui Dongshu, the secretary-general of China Passenger Car Association, which released the 2025 sales data Friday. "Overall, Chinese companies will continue to have a relatively clear advantage" over many foreign brands, he said.
Xiao Feng, an analyst at CLSA, said he expected the share of electric and plug-in cars to rise in coming years to around three-fourths of the Chinese market. That could mostly push foreign carmakers out of the Chinese market by 2030 or later, save for a handful of leading players such as Tesla, Toyota and Volkswagen, he said.
For many other foreign carmakers, "it's basically impossible for them to catch up in the EV space," Feng said.
In the U.S., regulatory changes and weak demand are pushing American automakers to retreat from EV plans. General Motors said Thursday it would book a $6 billion charge on its money-losing EV business, following Ford's announcement in December of $19.5 billion in charges mostly tied to EVs.
Pure electric-vehicle sales in China last year reached 7.9 million cars. That is about six times the estimated U.S. sales of 1.3 million EVs in 2025, which likely ended roughly flat from a year earlier, according to Cox Automotive.
Foreign carmakers have been rushing to restructure their China business while trying to keep a slice of the market. Last year, Volkswagen stopped producing its cars at a plant in Nanjing, and General Motors said it would close plants. This week, GM said it expected to record charges of about $1.1 billion in the fourth quarter tied to its business in China.
Even Tesla, the only foreign brand with a significant foothold in China's EV market, is struggling. Its sales last year in China dropped nearly 5% to about 626,000 cars, CPCA data showed. Globally, Tesla lost the global electric-vehicle sales crown to China's BYD last year after the U.S. carmaker reported delivery declines for the second year in a row.
Volkswagen, long the biggest foreign brand in China, hopes to revive its fortunes this year with a slate of designed-in-China models that took years to develop.
Toyota is building a new Lexus EV plant in Shanghai, and GM said all of its new products to be introduced in China this year would have an EV or plug-in hybrid option. Companies such as Ford and Nissan have repositioned the China market as an export hub to deal with excess production capacity.
Both Chinese and foreign players face fierce competition with constant promotions and price cuts. According to a survey by the China Automobile Dealers Association, just 30% of car dealers were profitable in the first half of 2025 and almost three-quarters sold at least some cars below cost.
Beijing has been trying to nudge consumers to spend more by offering purchase subsidies. Last year, the subsidy went up to the equivalent of around $2,900 when buyers unloaded 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.
However, some localities ran out of their budget for incentives by December, the passenger-car association said. That caused passenger-car sales to fall about 14% to 2.3 million vehicles in December compared with a year earlier. Some consumers were holding back in hopes of a better deal this year, officials said, although Beijing is trimming certain subsidies in 2026.
Overall, China's passenger-car market last year grew at its slowest pace in three years, expanding by around 4% to 23.7 million vehicles.
Write to Yoko Kubota at Yoko.Kubota@wsj.com
(END) Dow Jones Newswires
January 09, 2026 07:10 ET (12:10 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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