China car sales slow as some trade-in subsidies, tax breaks are phased out
China's passenger car sales slowed in October, even for electric vehicle makers BYD and Tesla, as automakers cut prices to compete in an overcrowded market, an industry association said Tuesday.
The China Association of Automobile Manufacturers said that sales grew 4.4% year-on-year, down from September's 11.2% increase and a 15.1% jump in August. But exports of EVs and plug-in hybrids doubled from a year earlier, to about 250,000, as automakers expanded further into overseas markets.
Vehicle sales in China, the world's biggest market for sales, got a boost in the past couple of years from government trade-in programs meant to encourage drivers to switch to EVs. Some Chinese cities and provinces have in recent months cut trade-in subsidies. An extension of such big subsidies next year is uncertain.
China is also expected to halve its tax exemption for electrics and hybrids starting next year.
Tesla's sales in China fell nearly 36% last month from a year ago, to 26,006 vehicles, according to the China Passenger Car Association (CPCA). That was down from 71,525 units sold in September.
Also in October, BYD overall sales dropped nearly 12% year-on-year, to 441,706, the company said, as it steps up expanding in overseas markets including the UK to offset fading demand in China under fierce competition with domestic rivals.
The phasing out of the trade-in subsidies in some regions in China has caused domestic sales to slow, said Claire Yuan, director of corporate ratings for China autos at S&P Global Ratings.
"Even if extended, the effect (on car sales) is likely to be milder," with domestic passenger and light commercial vehicle sales likely to decline in 2026, Yuan said.
Analysts also said pricing for car models will remain depressed due to intense market competition and a prolonged oversupply of vehicles.
BYD's market share fell in China while other automakers, including Geely, Leapmotor and XPeng, have been gaining market shares.
Meanwhile, China's exports of electric vehicles have continued to grow as automakers increasingly look to markets abroad such as Europe and Southeast Asia.
Chinese car brands could account for 30% of the global vehicle market by 2030, up from 21% last year, the consultancy AlixPartners estimates.
Source: Associated Press
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