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Last Updated on: 9th August 2025, 02:27 pm
China is about to cross one of the most important milestones in the global electric vehicle transition. In 2025, battery electric and plug-in hybrid cars will account for roughly half of all new sales in the country, a level the central government had not expected to see until the mid-2030s. This rapid rise is the product of a deliberate industrial strategy that links economic growth, air quality improvement, and energy security. It is also the result of years of policy integration at the national and city level, a domestic manufacturing base that can produce at enormous scale, and an accelerating buildout of charging and battery-swapping infrastructure.
The question now is how quickly China will move through the remaining adoption thresholds, how soon the majority of the fleet will be electric, and what lessons other markets can take from the speed of this shift.
This piece is part of a series of articles on the coming tipping points in EV adoption indicated by the complementary systems change observations of diffusion of innovations, logistic growth or the s-curve, and complex adaptive systems, introduced in the first article. The second dealt with changes when 5%–15% penetrations of EVs were reached, something already present in some markets. The third dealt with the critical 15%–40% range, when change is accelerating and the internal combustion services industry starts feeling the impacts. The fourth dealt with the next big transition, the 40%–80% range, when internal combustion service firms start shuttering en masse, requiring significant governmental assistance transitioning workforces. The fifth article explored where Europe is and where it will be, with the conclusion being that it will be well into the deep transformation away from internal combustion vehicles by 2035. The sixth article dealt with the sluggish and regressing United States, with the current administration’s policies slowing, but not halting, the growth of EVs. Next up: India at least, and perhaps a look at the rest of the world and a summary.
China’s adoption curve has already passed the early tipping points. The rise from 5% to 15% of new sales took only a few years, driven by strong incentives, city plate quota advantages, and an expanding roster of affordable models from domestic automakers. The climb from 15% to 40% was even faster, helped by a price war among major brands that pushed electric cars into lower market segments without compromising on features. By the middle of 2024, monthly sales of new energy vehicles were outpacing internal combustion models, and by year’s end the full-year share was close to 50%. That pace of change compresses timelines that in other regions are measured in decades.
Looking ahead, the 40% to 60% and 60% to 80% stages are likely to arrive within the next three to five years if the current policy and market conditions hold. Purchase tax relief for EVs will remain in place through 2025, tapering gradually in 2026 and 2027, and a generous trade-in program for older vehicles adds as much as RMB 20,000 for buyers scrapping an internal combustion car and replacing it with an electric one. More than ten million applications for that program were received by May 2025. These supports, combined with the competitive pressure of a crowded domestic market, are enough to maintain strong growth even as some subsidies phase down.
Fleet turnover lags sales, but China’s stock of electric cars is already around one in ten. Based on current policies, one in three cars on the road could be electric by 2030. That would be the point where gasoline demand in many urban areas drops enough to change the economics of fuel retailing and repair services. State-owned oil companies have started converting forecourts to fast-charging hubs and investing in power services, and independent gas stations in city centers are facing falling volumes. The service sector is beginning to adapt as well, with less demand for oil changes, exhaust repairs, and engine maintenance, and steady demand for high-voltage diagnostics, tires, glass, and body repair.
China’s consumer context is different from that of the United States or Europe. For large parts of the population, private car ownership is still a relatively new experience, which means there is less cultural attachment to gasoline cars, fewer sunk costs in ICE-specific maintenance patterns, and less nostalgia for combustion performance. Average annual driving distance for passenger cars in China is about 10,300 kilometers, well below the 19,000 to 22,500 kilometers typical in the United States and slightly less than many European countries. Lower mileage reduces the pressure for very long ranges, makes smaller battery packs viable, and fits well with charging patterns based on home, workplace, and public facilities.
Infrastructure growth is keeping pace with adoption. At the end of 2024, China had about 12.8 million charging points across public and private networks, and the public fast-charging network is growing quickly. The EV-to-charger ratio is better than in most markets, reducing one of the key friction points in adoption.
There are risks that could slow the curve. Subsidy tapering in 2026 and 2027 could pull demand forward into 2025 and create a temporary dip. A prolonged price war could erode margins and slow investment in new platforms. Trade tensions could limit the ability of Chinese manufacturers to export surplus production, which matters for plants built to serve both domestic and overseas buyers. These are manageable if policy remains flexible and domestic demand continues to grow, but they are important to watch.
On the current trajectory, China could reach 60% of new sales in 2025, 70 to 75% by 2027, and 80% before the end of the decade. Fleet share will follow, with the one-third mark arriving around 2030 and the halfway point in the early to mid-2030s. Once those levels are reached, the economic case for maintaining gasoline distribution and ICE-specific service capacity in many cities will weaken sharply.
The combination of shorter average driving distances, denser urban environments, and less entrenched cultural attachment to combustion means there are fewer barriers to full electrification than in more motorized societies. For other markets, the lesson is that aligning industrial policy, consumer incentives, and infrastructure investment can accelerate tipping points by years, and once those points are passed, the rest of the curve can unfold very quickly.
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