China's Auto Industry Surpasses 12 Million Units in First Five Months, EVs Account for Over 40%

On June 11, the China Association of Automobile Manufacturers (CAAM) released its May 2025 Auto Industry Production and Sales Report, revealing that China's automotive industry achieved over 10% year-on-year growth in both production and sales during the first five months of the year. The industry as a whole is demonstrating steady and positive momentum.

From January to May, total vehicle production reached 12.826 million units, with sales hitting 12.748 million units, reflecting year-on-year increases of 12.7% and 10.9%, respectively. Notably, new energy vehicle (NEV) production totaled 5.699 million units, while NEV sales reached 5.608 million units, marking significant year-on-year growth of 45.2% and 44%. NEVs now account for 44% of total new vehicle sales.

In May alone, vehicle production and sales reached 2.649 million and 2.686 million units, representing month-on-month increases of 1.1% and 3.7%, and year-on-year growth of 11.6% and 11.2%. NEVs continued their strong performance, with production and sales hitting 1.27 million and 1.307 million units, showing year-on-year growth of 35% and 36.9%. NEVs accounted for 48.7% of May's total new vehicle sales.

The CAAM noted that May's automotive market maintained its positive momentum, achieving over 10% growth compared to the previous year. Both domestic demand and exports showed robust activity. Passenger car sales were particularly strong, while the commercial vehicle market still faces challenges. NEVs continue to grow rapidly, and automotive exports saw significant improvements.

Between January and May, passenger vehicle production and sales totaled 11.08 million and 10.996 million units, reflecting year-on-year increases of 14.1% and 12.6%. Among traditional fuel-powered passenger vehicles, sales of A-, B-, and C-segment cars declined. A-segment vehicles remain dominant, with cumulative sales of 3.068 million units, down 10.1% year-on-year.

In contrast, NEV passenger vehicles demonstrated growth across all segments. Sales were primarily concentrated in A- and B-segment vehicles, with cumulative sales of 1.57 million and 1.373 million units, up 24.5% and 17.5% year-on-year, respectively. The rapid development of China's high-end NEV brands has significantly increased the share of premium NEVs, driving consumer upgrades in the market.

On the export front, China exported 551,000 vehicles in May, up 6.6% month-on-month and 14.5% year-on-year. From January to May, total vehicle exports reached 2.49 million units, a 7.9% year-on-year increase. Among manufacturers, Chery led the way with 442,000 units exported, up 1.6% year-on-year, accounting for 17.7% of total exports. BYD showed the most remarkable growth, with exports surging 110% to 382,000 units.

Despite the positive overall trends, the CAAM highlighted that profitability within the industry continues to decline. The "growth without profit" phenomenon persists, driven in part by intense competition characterized by chaotic "price wars." Such internal competition negatively impacts the industry's profitability.

To address these challenges, the CAAM issued an Advocacy for Fair Competition and Healthy Industry Development on May 31. This initiative aims to encourage all industry players to adhere to principles of fair competition, prioritize innovation, and improve product quality and service standards to ensure the sustainable development of the automotive sector. The advocacy has received widespread recognition and support within and outside the industry.