International consulting firm Gartner recently forecast that global electric vehicle ownership would rise significantly to hit 85 million by 2025, with China accounting for over half of the global EV fleet.

The growth in 2025 will be driven primarily by higher EV sales in China (58 percent) and Europe (24 percent), which together are projected to represent 82 percent of total EVs in use worldwide, said Jonathan Davenport, senior director analyst at Gartner.

The consultancy said China's EV ownership is anticipated to surpass the combined total of the rest of the world by 2025 and maintain this lead over the next decade. It estimates 49 million EVs will be on the road in China by 2025, compared to 20.6 million EVs in Europe and 10.4 million EVs in North America.

Experts highlight that as charging infrastructure improves and market growth in major cities slows, second and third-tier cities in China will emerge as new growth areas for the country's EV market. As sales increase, the industry is expected to enter a profitable phase in the coming years.

Latest data from the China Passenger Car Association showed that retail sales of new energy vehicles — among which EVs accounted for a major proportion — reached 1.19 million units in October, setting a new monthly record.

CPCA Secretary-general Cui Dongshu noted that the release of pent-up demand from June to October has been significant. Consumers who had been waiting for price drops began purchasing vehicles, and policies for recycling scrapped cars and upgrading old cars have further stimulated buying enthusiasm.

Cui stated that NEV retail sales from January to October this year totaled 8.33 million units, representing a strong 40 percent increase compared to the 34 percent growth rate in 2023.

"NEVs' penetration rates have exceeded 50 percent for four consecutive months. In October, traditionally a low month for NEV sales, the penetration rate still reached 52.8 percent, up 16 percentage points from October 2023, continuing to set new highs."

Promotional discounts from car manufacturers, combined with government policies for upgrading old cars, are expected to further boost domestic car purchases this year. The China Association of Automobile Manufacturers previously forecast that NEV sales in China could reach 11.5 million units in 2024.

Balancing sales volume with profit margins remains a common challenge for car manufacturers. Additionally, they also face restrictions on exports to overseas markets and intense domestic competition, experts noted.

Zhang Yongwei, vice-chairman and secretary-general of the think tank China EV100, said that an increasing number of Chinese NEV companies are reaching profitability, and the industry is expected to enter a profitable phase in the coming years.

According to a recent report by iiMedia Research, the market size of China's NEV sector reached 11.5 trillion yuan ($1.58 trillion) in 2023, growing by 16.2 percent year-on-year. The market is projected to expand to 23.1 trillion yuan by 2025.

The report also noted that Chinese consumers are increasingly concerned with the range and safety features of NEVs, such as long-range capabilities, fast charging and power system protection. It said as charging infrastructure improves and growth in major cities slows, second and third-tier cities are becoming new growth areas for the NEV market.