China’s car sales saw a notable increase in April, with a 14.8% rise compared to the previous year, marking the third consecutive month of growth. This increase was driven in part by a government subsidy program for trade-ins of old cars, which helped ease the effects of the U.S. tariffs on Chinese exports and boosted consumer confidence. In total, 1.78 million passenger vehicles were sold in April, and sales for the first four months of 2025 reached 6.97 million units, an 8.2% rise compared to the same period in 2024, according to data from the China Passenger Car Association (CPCA).
Sales of new energy vehicles (NEVs), which include electric vehicles and plug-in hybrids, showed strong growth, rising by 33.9% year-on-year. These vehicles now make up more than half of all car sales, accounting for 50.8% of the total in April. This shift toward NEVs was further supported by the government’s program, which offers greater subsidies for trade-ins involving older vehicles being exchanged for new energy cars. As of April 24, the scheme had subsidized 2.71 million cars, offering a cushion for consumer sentiment during a period of trade tensions between the U.S. and China.
However, Chinese car exports faced a downturn in April, with a 2.2% drop compared to the same period last year, continuing the 8% decline seen in March. On the domestic front, the push for sales had previously been fueled by the promise of next-generation automated-driving systems. For instance, BYD announced in February that it would offer its “God’s Eye” driver-assistance system as standard equipment across its entire lineup. Yet, the excitement surrounding such automated-driving features has started to wane. This change followed a government crackdown on misleading marketing terms like “smart” or “autonomous” after a fatal accident in March involving a Xiaomi SU7 sedan, which caught fire following a crash while the driver attempted to take control from the car’s assisted-driving system.
While the push for advanced driver-assistance systems continues, the broader market appears to be refocusing, with subsidies for NEVs playing a critical role in keeping car sales on the rise despite external economic pressures.
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