Electric vehicle sales for the first time exceeded sales of conventional fuel vehicles, in an indication of the acceleration of the transition towards clean energy and the consolidation of China’s position as the largest global market for electric vehicles.

According to data issued by the Chinese Passenger Car Association, sales of fully electric cars and plug-in hybrid cars reached about 13 million cars during the year 2025, setting an unprecedented record, and ahead of sales of internal combustion cars, which declined by 13% on an annual basis to reach about 12.3 million cars, which is the lowest level recorded in 15 years, according to the Chinese Passenger Car Association.

This transformation, according to what was reported in the economic bulletin on Al Jazeera Mubasher, is considered a historic transformation in the automobile market in China, at a time when the electric car sector in China enters the year 2026 with weaker momentum compared to previous years, with the beginning of a decline in government support programs that formed a basic pillar of demand growth. Estimates reported by Bloomberg indicate that the market is going through a delicate rebalancing phase between supply and demand, in light of the reduction in subsidies and the increasing sensitivity of consumers to prices.

Estimates expect the growth in sales of new energy vehicles to slow to about 10% in 2026, after growth of 18% in 2025, amid a volatile market trajectory characterized by sluggishness in the middle of the year, intensifying price competition, and a surplus in production capacity.

While exports remain an important outlet for the sector after growing by about 20% over the past year, they face increasing risks due to trade restrictions and customs duties in foreign markets, which may limit their ability to compensate for any additional slowdown in domestic demand within China.