Highlights

• In 2025, China produced 34.53 million vehicles, marking a 10.4% year-on-year increase.
• New Energy Vehicles (NEVs) accounted for 47.9% of total vehicle sales, indicating progress towards electrification market parity.
• NEV exports more than doubled, reaching 2.62 million units, a 103.7% year-on-year increase.
• Total vehicle exports reached 7.10 million units, representing a 21.1% year-on-year growth.
• In December, NEV sales comprised 52.3% of new vehicle sales despite overall market softness.
• The rise in NEV sales directly increased demand for rare earth magnets and critical minerals.

China’s automobile industry closed 2025 with record annual production and sales, reinforcing its position as the world’s largest auto market—even as December volumes softened year-on-year, according to data released by the Ministry of Industry and Information Technology (MIIT) and compiled by the China Association of Automobile Manufacturers (CAAM).

Full-year performance was solid. In 2025, China produced 34.53 million vehicles and sold 34.40 million, representing year-on-year increases of 10.4% and 9.4%, respectively. Growth was overwhelmingly driven by new energy vehicles (NEVs), with production and sales reaching 16.63 million and 16.49 million, up 29.0% and 28.2%. NEVs accounted for 47.9% of total new vehicle sales for the year—bringing electrification close to outright market parity.

December results were more mixed. Total vehicle sales declined 6.2% year-on-year to 3.27 million units, largely due to a contraction in passenger vehicles, whose sales fell 8.7% YoY. In contrast, commercial vehicles outperformed, with December sales rising 15.3% YoY, pointing to continued momentum in logistics, freight, and infrastructure-linked activity.

NEVs remained a bright spot in December. Sales increased 7.2% YoY to 1.71 million units, pushing NEVs to 52.3% of monthly new vehicle sales—a notable milestone underscoring how deeply electrification is now embedded in China’s auto market.

Exports were the standout accelerant. In December alone, China exported 753,000 vehicles, a 49.2% YoY increase. NEV exports surged 124.8% to 300,000 units. For the full year, vehicle exports totaled 7.10 million units (+21.1% YoY), while NEV exports reached 2.62 million units, more than doubling (+103.7%) from 2024.

Why This Matters for Rare Earths and the West

China’s EV-led expansion and export surge directly translate into rising demand for rare earth permanent magnets, battery materials, power electronics, and lightweight alloys. As vehicle exports scale, embedded rare earth content increasingly moves offshore, tightening the linkage between China’s automotive dominance and global critical-minerals supply chains—an issue of growing strategic relevance for the U.S. and allied economies.

Disclaimer: This article is based on information released by China’s Ministry of Industry and Information Technology and industry associations operating within a state-affiliated information framework. All data and interpretations should be independently verified before forming business, investment, or policy conclusions.