China’s Car Sales Jump 14.8% in April, Driven by Government-Backed Trade-Ins
China’s passenger vehicle sales rose for the third consecutive month, climbing 14.8% in April year-on-year, as government-subsidised trade-in programs encouraged consumers to upgrade older vehicles, according to the China Passenger Car Association (CPCA).
- April sales reached 1.78 million units, a notable rebound amid ongoing US-China trade tensions.
- For the first four months of 2025, cumulative sales rose 8.2%, totaling 6.97 million units, indicating resilient domestic demand.
New Energy Vehicles Gain Momentum
Sales of electric vehicles (EVs) and plug-in hybrids (PHEVs) surged 33.9% year-on-year, accounting for over half (50.8%) of total passenger car sales in April.
- This growth reflects rising consumer preference for NEVs, supported by generous government incentives.
- The current trade-in scheme offers larger subsidies for NEVs than gasoline cars, boosting uptake and aligning with Beijing’s climate targets.
Trade-In Program Cushions Tariff Impact
As of April 24, the government’s trade-in program had covered 2.71 million vehicles, providing a buffer against weakened consumer confidence following increased US tariffs on Chinese exports.
- The scheme aims to stimulate domestic consumption while softening the economic impact of global trade tensions.
- It also accelerates the retirement of older, higher-emission vehicles, contributing to emission reduction goals.
Export Decline Reflects Global Headwinds
While domestic sales strengthened, car exports fell 2.2% in April, continuing an 8% decline in March, CPCA data showed.
- The drop highlights how external trade barriers and weaker global demand are weighing on China’s auto export performance.
- Exporters are also contending with increased scrutiny and tariffs abroad, particularly from Western markets.
Automated Driving Hype Faces Regulatory Pushback
The frenzy around automated-driving features—once a major sales driver—is cooling as the government tightens regulations on marketing claims.
- The shift began after a fatal crash involving a Xiaomi SU7 EV in March, where the vehicle caught fire after colliding with a cement pole.
- The incident occurred seconds after the driver attempted to override the assisted-driving system, prompting a crackdown on terms like “smart” or “autonomous”.
BYD’s Strategy Shapes Market Trends
BYD’s move to make its “God’s Eye” driver-assistance system standard across its fleet had earlier intensified a price and tech war in China’s auto market.
- However, the regulatory response to overhyped driver-assist marketing is leading automakers to reframe their messaging.
- As a result, the focus is shifting from automated tech features to affordability, reliability, and subsidy-driven adoption.