China lowers its automotive sales target for 2025 in light of local slowdown

September 13, 2025 1:44 PM

China has just unveiled its vehicle sales target for 2025, and it is already below the expectations of the country's major automakers.

On Friday, the Ministry of Industry and Information Technology, accompanied by seven other agencies, announced a total target of 32.3 million units sold.

This figure is lower than the 32.9 million anticipated by the Chinese Association of Automobile Manufacturers. The same government document also sets a specific target of 15.5 million for new energy vehicles (VEN), including electric and plug-in hybrid cars. This figure is also below the 16 million units previously projected by the CAAM.

The government claims that this plan aims to stabilize the industry. This notably includes the conditional approval of level 3 autonomous driving, allowing cars to steer and manage traffic by themselves in limited situations.

The ministry has stated its intention to also update road safety rules, address insurance coverage issues, and fill regulatory gaps. Officials emphasized that the country will now focus on fair competition for a more orderly market.

Beijing launches a crackdown as the automotive sector slows down

The government is not just satisfied with long-term plans. Two days before the announcement of the 2025 objectives, the same ministry stated that it would launch a three-month campaign targeting misleading marketing and irregularities online in the automotive industry.

This decision follows a brutal price war that has harmed manufacturers, parts suppliers, and dealers across the country. In May, authorities introduced stricter rules to bring order to what had become total chaos in pricing.

The Chinese automobile market is cooling rapidly. In August, total sales growth hit its slowest pace in seven months. The growth of domestic electric vehicle sales also slowed to 6%, after averaging a monthly growth of 36% in the first half of the year.

Charles Lester, head of data at Rho Motion, believes that this decline reflects more difficult comparisons and adjustments in subsidies. However, he adds that sales in China could rebound in the last quarter, thanks to new funds and seasonal trends that typically boost demand.

“In the United States, we expect record sales in August followed by another strong month in September; this could be a new record followed by a sharp decline,” said Lester.

Even though the largest Chinese car manufacturer has cut its global sales forecast for 2025 by up to 16%, smaller competitors are quietly gaining ground in the country.

In August, Geely, Xpeng, and Nio all experienced their best month in terms of electric and hybrid vehicle sales. According to Lester, “the market leader is certainly feeling the pressure from other manufacturers now.”

Global EV sales are cooling with regional variations.

Electric and plug-in hybrid vehicles reached 1.7 million global sales in August, up 15% compared to the same month last year. However, this growth remains below the 21% of July, marking the lowest rate since January.

In China alone, 1.1 million vehicles were sold in August. In Europe, sales increased by 48% to reach approximately 283,453 units. North America added 201,255 vehicles, a 13% increase, while the rest of the world sold over 144,280 vehicles, up 56% compared to the previous year.

Growth outside of China has helped to offset the domestic slowdown. The United States has seen strong demand due to expiring EV tax credits, while Europe experienced a spike due to incentives aimed at promoting green energy.

China still holds more than half of the global EV market, and anything that happens in its automotive sector will have repercussions on the entire global supply chain.

As the end of the year approaches, all eyes are on the rollout of government grant programs and the viability of the goal of 32.3 million units.

Automakers in China are striving to adapt before 2025, but many are still suffering from months of unstable prices, declining profits, and new regulations that they are just beginning to understand.