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EN中文
IPE Notices

Passenger Car Market Trends

Market Landscape Changing at an Accelerated Pace

The passenger car industry has a significant impact on economic growth, achieving climate goals and sustainable transport. Over the past decade, China's new passenger car market has undergone a profound transformation, from a dominance of fuel vehicles to a rise of new energy vehicles (NEVs), which has changed the market landscape and brought significant environmental benefits.

New Energy Vehicle Penetration Rate Continues to Increase

The development of new energy vehicles (NEVs) is strategic for China to address climate change and promote green development. Since the State Council issued the ‘Energy-Saving and New Energy Vehicle Industry Development Plan (2012–2020)’ in 2012, China's NEV industry has adhered to promoting pure-electric vehicles. In 2020, the General Office of the State Council released the 'New Energy Vehicle Industry Development Plan (2021–2035)', setting a target for NEVs to reach around 20% penetration by 2025. Subsequently, China's NEV adoption rate experienced explosive growth. According to the 'TRENDS OF NEW PASSENGER CARS IN CHINA: CO2 EMISSIONS AND TECHNOLOGIES, 2022–2023' published by ICCT in 2025, China's NEV market penetration rate has grown from 14% in 2021 to nearly 35% in 2023. A milestone was achieved in April 2024, when NEV penetration in China’s domestic passenger vehicle market hit 50.39% in the first half of the month—surpassing fuel-powered vehicles for the first time. Since June 2024, NEVs have maintained a market share of more than 50% for seven consecutive months, marking a historic shift in the automotive industry.

  1. Sales Trends of New Energy Vehicles
  2. Passenger Car Sales Share by Segment
  3. 畅销车型
          2022 2023

          China's Passenger Vehicles Reduce Greenhouse Gas Emissions Significantly

          Rapid Penetration of New Energy Vehicles and Improved Fuel Efficiency Contribute to Significant Decline in Carbon Emissions

          The type-approval CO2 emission rate of the new passenger car fleet, normalized to the Worldwide harmonized Light-duty Test Cycle (WLTC) decreased by 58% between 2012 and 2023. Between 2022 and 2023, the emission rate fell by an annual average of 14%, largely attributable to the swift adoption of electric vehicles.

          CO2 Emission from New Passenger Vehicles over the Years

          1. CO2 Emission and Physical Properties of New Passenger Cars
          2. CO2 Emissions from Passenger Cars by Class (All)
          3. CO2 Emissions from New Passenger Cars by Fuel Type
          4. CO2 Emissions from New Fuel passenger Vehicles by Class

          1. Average CO2 Emission of New Passenger Cars Decreases Year by Year

            Despite the increase in vehicle power, weight and engine displacement, the CO2 emission rate of internal combustion engine (ICE) cars was at a plateau between 2019 to 2021 but then fell in 2022 and 2023 by an annual average of 1.9%. By 2023, the CO2 emission rate was 85% of the 2012 level.

            1. CO2 Emissions from New Passenger Cars by Class

              Due to swift electrification and improving fuel efficiency, most segments record notably lower CO2 emissions since 2021.


              SUVs, the most popular segment, went from an emission rate of 157.5 g/km in 2021 to 115.4 g/km in 2023, a reduction of 26.7% the first year and 14.4% the second year.

              The emission rate had not been improving for the A0 segment before 2021, but then emissions fell 45.2% from 139.9 g/km in 2021 to 76.6 g/km in 2023, an average reduction of 26% for each of the 2 years.

              The A00-class passenger car fleet is fully electrified by 2021.

              1. CO2 Emissions from New Passenger Cars by Fuel Type

                In 2022 and 2023, CO2 emissions from gasoline vehicles decrease while that of diesel vehicles increase. The CO2 emissions of hybrid electric vehicle (HEV) decrease in 2022 but increase in 2023. Plug-in hybrid vehicle emissions decrease vastly from 2020 to 2022 but not significant in 2023.

                1. CO2 Emissions from New Fuel Passenger Vehicles by Class

                  The SUV segment, with a decrease in average emissions by 4.4% from 171.7 g/km in 2021 to 164.2 g/km in 2023, closed its gap with the C segment in type-approval CO2 performance.

                  The A segment reduced its average CO2 emissions from 144.2 g/km in 2021 to 133.4 g/km in 2023, or 7.5% in 2 years. This fuel consumption rate in 2023 is lower than for vehicles in the physically smaller A0 segment.

                  CO2 Reduction Technology for Fuel-fired Vehicles

                  Continued Growth in Market Penetration of Turbocharging, Gasoline Direct Injection Technologies and Automatic Transmissions

                  The adoption of technologies conducive to lower CO2 emissions for internal combustion engine (ICE) cars has continued to grow. The market penetration of turbochargers and superchargers increased from 62% in 2021 to 68% in 2023. Gasoline direct injection—along with dual port injection, which combines direct and port injection technology—increased from 68% in 2021 to 79%. Regarding transmissions, automatic transmission and continuously variable transmission continue to dominate the ICE fleet, moving from 80% penetration in 2021 to 94% in 2023.

                        Electric Vehicle Technology Upgrade

                        Steady Improvement in Electric Range and Energy Efficiency

                        Thanks to the central subsidy and new energy vehicle credit policies in the 2010s, key efficiency metrics for new energy vehicles such as electric range and electric energy consumption have shown continuous improvement since 2015.

                        Efficiency Performance of New Energy Vehicles

                        Fleet-average vehicle and battery performance indicators of new battery electric passenger cars sold between 2012 and 2023 (2012 = 100%)

                          The Electric Range of Battery Electric Vehicle Increases Significantly

                          Electric range increases significantly between 2017 and 2019 due to continued advances in battery technology, and after 2019, the sales-weighted average range growth rate for pure electric vehicles slows as subsidies are phased out.

                          Fleet-average vehicle and battery performance indicators of new plug-in hybrid electric passenger cars sold between 2012 and 2023 (2012 = 100%)

                            Relatively Small Changes in Plug-in Hybrid Electric Vehicle Parameters

                            PHEVs were less affected by the policy change, as consumer demand for longer-range PHEVs spurred bigger increases in electric drive range. This preference in the market also fueled the rapid growth of range-extended electric vehicles (REEVs).

                            Tank to Wheel Carbon Emissions

                            Tank to Wheel Carbon Emissions (g/km)

                            A Total of 0 Type/Model Tank to Wheel Carbon Emissions

                            No. Company Model Model Name Vehicle Type Fuel Type Classification Grade Fuel consumption (WLTC, L/100km) Carbon dioxide emission factor (WLTC, g/km)

                            Note:

                            1. Vehicle driving process (Tank to Wheel) carbon emissions are calculated based on the fuel consumption per 100 kilometers under WLTC (World Light Vehicle Test Cycle), and only reflect the emissions caused by fuel consumption during the vehicle's driving stage.

                            2.As battery electric vehicles do not consume fuel during driving processes, the Tank to Wheel carbon emission is 0.

                            Future Outlook

                            • Technology and Policy Drive Low Carbon Transformation

                              In the future, the market share of new energy vehicle is expected to continue to expand with technology innovation and policy direction. Breakthroughs in battery technology will further improve electric range and energy efficiency, resulting in lower carbon and higher efficiency. China's new passenger car market is expected to continue to make breakthroughs in reducing CO2 emissions and improving energy efficiency, contributing to global sustainable transport development and the achievement of carbon neutrality.

                            Note: The content on this page is taken from 'TRENDS OF NEW PASSENGER CARS IN CHINA: CO2 EMISSIONS AND TECHNOLOGIES, 2022–2023' published by ICCT in 2025.
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