In a historic transformation, electric vehicle (EV) sales in China have outpaced traditional internal combustion engine vehicle sales for the first time, marking a significant milestone in the global transition to clean energy. Data from the China Passenger Car Association revealed that sales of fully electric and plug-in hybrid vehicles reached around 13 million units in 2025, a record high, while sales of internal combustion engine vehicles saw a 13% annual decline, totaling approximately 12.3 million - the lowest level in 15 years. This shift highlights China's position as the largest market for electric vehicles worldwide.

However, this transformation comes at a time when the EV sector in China is entering a quieter phase in 2026, as government-subsidy programs, which have been crucial for driving demand, start to diminish. Reports suggest that the market is entering a delicate phase of rebalancing between supply and demand, exacerbated by the reduction in subsidies and rising competition among manufacturers. As a result, the prospects for continued rapid growth in the EV sector may face significant challenges in the coming years.

This development carries important implications not only for China's automotive industry but also for global efforts to combat climate change. As electric vehicles become more mainstream in China, other countries may look to this shift as a model for their own transitions to cleaner transportation. The impacts on production, job markets, and energy consumption will be closely observed as China navigates this pivotal moment in its automotive history.