TLDR: China achieved record 58.1% NEV penetration in September while renewing trade-in subsidies (RMB 81 billion) and extending purchase tax exemptions through 2027—directly contradicting Western subsidy retreat narratives. Five of six major manufacturers set delivery records despite 5-10 million units of estimated overcapacity compressing margins to 4.3% average, forcing brutal price competition while Western tariff barriers (US 100%, EU 17-35%, Canada 100%) reshape global market access.
China renewed EV incentives, contradicting Western retreat narrative
China’s new energy vehicle market achieved a historic milestone in September 2025, with electric and plug-in hybrid vehicles capturing 58.1% of retail passenger car sales. The market delivered an estimated 1.25 million NEV units, representing 11.4% year-over-year growth and 13.5% month-over-month growth despite widespread reports of subsidy expiration. Investigation reveals China actually renewed its trade-in subsidies in January 2025 and extended purchase tax exemptions through 2027, moving opposite the direction of Western policy while domestic manufacturers navigate brutal price competition and estimated overcapacity of 5-10 million units annually.
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