In July, half of all vehicles sold in China were new energy vehicles (NEVs), including pure electric and plug-in hybrid vehicles, marking a significant leap in EV adoption. NEV sales surged 37% YoY to account for 50.7% of total car sales, up from 7% three years ago, driven by heavy investments in the domestic EV supply chain. This contrasts sharply with the 18% share of electric and hybrid vehicle sales in the US for Q1 2024. Despite this growth, overall car sales in China fell 3.1% due to ongoing economic challenges and weak consumer confidence. In response, the Chinese government doubled cash subsidies for vehicle purchases and eased car purchase restrictions in cities like Beijing. The market is also seeing a reduction in the intensity of price wars as automakers seek to protect margins, with BYD reducing prices less aggressively in July. Additionally, vehicle exports grew 20% YoY, though the increase was slower than June’s.