China Car Sales Rise in April as EV Incentives Offset Tariff Concerns

China’s auto market saw a strong rebound in April, with passenger vehicle sales rising 14.8% year-on-year to 1.78 million units, marking the third consecutive monthly increase. According to data from the China Passenger Car Association (CPCA), total car sales for the first four months of 2025 reached 6.97 million units, up 8.2% compared to the same period last year.

A key driver behind this growth is a government-backed trade-in subsidy program favoring new energy vehicles (NEVs), which include electric vehicles (EVs) and plug-in hybrids. NEVs accounted for 50.8% of total car sales in April, soaring 33.9% from a year earlier. By April 24, the program had subsidized 2.71 million vehicles, helping sustain consumer confidence amid rising U.S. tariffs on Chinese exports.

However, China’s car exports fell for the second straight month, down 2.2% in April following an 8% drop in March, highlighting ongoing pressure from international trade tensions.

On the domestic front, consumer enthusiasm for automated-driving systems appears to be waning. BYD’s move to make its “God’s Eye” driver-assistance system standard across all models initially fueled interest, but a recent government clampdown on misleading marketing terms like “smart” and “autonomous” is reshaping public perception. The shift follows a fatal accident involving a Xiaomi SU7 EV, which caught fire after crashing into a cement pole when a driver tried to override its assisted-driving mode.

While government incentives continue to boost NEV adoption, evolving consumer priorities and regulatory scrutiny over autonomous tech are reshaping how automakers position their products in the world’s largest auto market.