China’s passenger car market has undergone a dramatic shift, with sales of internal combustion engine (ICE) vehicles plummeting by roughly 7 million units between 2020 and 2025. This contraction coincides with the explosive growth of electric vehicles (EVs), which now account for 59% of all new car sales as of December 2025. The transition is reshaping automotive demand, and established brands are adapting – some faster than others.
The Decline of ICE Vehicles
Over six years, ICE vehicle sales fell from 17.8 million units in 2020 to 10.85 million in 2025, a decrease of approximately 39%. This isn’t merely a dip; it reflects a fundamental change in consumer preference driven by incentives for EVs, stricter emissions standards, and improved EV technology. The trend demonstrates that China is serious about phasing out gas-powered cars, and the pace of this shift will likely accelerate.
Brand Performance: Winners and Losers
Despite the overall decline, some brands continue to dominate ICE sales. Volkswagen, Toyota, and Geely all hold top positions in the 2025 rankings.
- Volkswagen Sagitar led with 256,000 units sold.
- Volkswagen Lavida followed with 270,000 units, despite a 16.2% year-over-year decline.
- Nissan Sylphy rounded out the top three with 320,000 units, also experiencing a 6.5% decrease.
However, the data reveals significant long-term declines for previously dominant models. Nissan Sylphy sales fell from a peak of 538,000 units in 2020, while Volkswagen Lavida dropped from nearly 500,000 units in 2019.
The Rise of Domestic Brands
Chinese automakers are capitalizing on the shift. Geely’s Xingyue L (240,000 units, +11% YoY) and Boyue (230,000 units, +148% YoY) saw substantial growth. The Boyue’s nearly 150% increase is particularly noteworthy, demonstrating the growing competitiveness of domestic brands in the ICE segment.
What This Means
The decline of ICE vehicles in China is not just a sales statistic; it’s a structural change in the global automotive industry. China’s market is driving demand for EVs worldwide, forcing manufacturers to adapt or risk irrelevance. While established joint ventures like Volkswagen and Nissan still hold significant market share, their long-term viability depends on aggressive EV investments. The data underscores that the future of automotive sales in China is electric, and brands that fail to adjust will inevitably lose ground.
