Hybrid Technology Takes the Lead: Electric Vehicles Face Market Share Decline to 20% in China

Key Trends in the Automotive Industry: Hybrid Vehicles Gaining Market Share, While Pure Electric Vehicles Retreat to 20% Market Share
As of April 18, 2025, it has become evident that hybrid technology is taking a dominant position in the global and Chinese new energy vehicle markets, with pure electric vehicles expected to shrink to a 20% market share.

1. Rapid Growth of Hybrid Technology: In 2024, the sales growth of hybrid vehicles in China reached 80%, significantly outpacing the 35.5% growth of pure electric vehicles. This marks a substantial shift, as China’s hybrid technology has transitioned from being a “follower” to a “leader” in the industry.
2. European Market Trends: In Europe, hybrid vehicle sales also surged by 75%, reaching 13.2 million units, while the growth of pure electric vehicles has noticeably slowed down, indicating a shift in consumer preference.
3. Policy Shifts in China: The Chinese government is starting to reassess its focus on pure electric vehicles. In 2024, the Ministry of Industry and Information Technology specifically called for the “coordinated development of new energy and internal combustion engine technologies.”
4. Energy Efficiency of Hybrid Technology: Hybrid technology is recognized for its energy-saving and emission-reduction capabilities and is compatible with various electric drive technologies, including plug-in hybrids and range-extended hybrids.

Since Toyota launched the first hybrid vehicle, the Prius, in 1997, hybrid technology has gradually become a key player in the automotive industry’s transition to low-carbon solutions. Despite the previous decade’s shift towards pure electric vehicles, led by China, Japanese automakers like Toyota have steadfastly remained committed to hybrid technology. Through five iterations, Toyota has reduced the fuel consumption of its hybrid models to just 3.8 liters per 100 kilometers, resulting in significant emissions reductions.
Recently, numerous Chinese car manufacturers have invested in the development of hybrid fuel engine technologies. The resurgence of plug-in hybrids and range-extended hybrids has marked a turning point in the market. In 2024, hybrid vehicle sales in China grew by 80%, a remarkable contrast to the 35.5% growth of pure electric vehicles, solidifying China’s status as a leader in hybrid technology.
Turning our attention to Europe, a decade ago, there was a radical push towards a “complete ban on combustion engines” by 2030. However, the realities of energy efficiency and emissions reduction have prompted a reassessment of these stringent measures. In March 2023, the European Union withdrew the ban, allowing the continued production and sale of fuel vehicles that achieve carbon neutrality, thereby acknowledging the limitations of the pure electric route.
This policy reversal is closely tied to market performance: in 2024, hybrid vehicle sales in Europe increased by 75%, reaching 13.2 million units, while the growth of pure electric vehicles slowed considerably. Consumers have made their preferences clear—hybrid vehicles offer a practical solution that balances environmental concerns with usability, especially in areas lacking adequate charging infrastructure.
In China, the government is also beginning to reflect on its previous bias towards pure electric vehicles. The Ministry of Industry and Information Technology indicated in 2024 that it would “coordinate the development of new energy and internal combustion engine technologies,” while regions like Hubei have introduced specific subsidies for hybrids, with amounts reaching up to 20,000 yuan. This represents a commendable breakthrough, as previous restrictions on hybrid technology due to Japan’s technological blockade have now shifted, with China emerging as a powerhouse in hybrid technology development and application.
Additionally, market realities have prompted this shift: in 2023, the average price of pure electric vehicles in China dropped below 150,000 yuan, while the mainstream price range for hybrids has stabilized between 200,000 and 300,000 yuan, driven by consumer demand for upgraded technology.
Since 1997, I have visited Japan three times to interview Toyota’s executives, delving into the deeper logic of hybrid technology. I have written about how this technology recovers energy lost during braking and coasting, storing it in a compact battery. During operation, the vehicle uses this stored energy alongside the fuel engine to achieve energy savings and reduced emissions. Toyota termed this system a hybrid system.
This foundational logic can be integrated into all electric drive technologies. Starting with hybrid electric vehicles (HEVs), increasing the battery capacity and adding a charging plug results in plug-in hybrid electric vehicles (PHEVs). Removing the internal combustion engine while retaining the electric motor, battery, and electronic control leads to pure electric vehicles (EVs). By replacing the engine with a hydrogen fuel cell stack and adding hydrogen storage tanks, we arrive at the ultimate new energy vehicle—hydrogen fuel cell vehicles.
Plug-in hybrids originated from Toyota, where a larger battery is used to enhance driving performance while alleviating the “range anxiety” associated with pure electric vehicles. This innovation also addresses the acceleration limitations of traditional hybrids, maximizing energy efficiency. Range-extended vehicles, similar to the General Motors Volt, utilize a small engine to generate electricity when the battery is depleted. Today, China’s range-extended vehicles have evolved to rely entirely on fuel-powered generators, operating more efficiently than standard fuel vehicles.
In recent years, various domestic companies have developed impressive hybrid systems, including those from Geely, Great Wall, BYD, Changan, and Chery. Chery, a leading exporter of new energy vehicles and a long-time player in engine technology, recently announced the launch of its latest hybrid engine—Kunpeng Tianting—boasting a thermal efficiency exceeding 48%, setting a new global record in the hybrid engine sector.
In contrast to the thriving hybrid sector in China, multinational corporations face challenges in the electric vehicle market, highlighting strategic shortsightedness. The high costs and shrinking profits of foreign joint venture electric models in China have led to significant market pressure from emerging domestic electric vehicle companies. Additionally, some multinational firms, having missed the opportunity to capitalize on previous electric vehicle subsidies, now introduce outdated models to the Chinese market, raising concerns about their future viability.
From 2023 to 2024, while new car sales in the European Union continue to grow, the market share of pure electric vehicles has decreased from 14.6% to 13%. While it is evident that pure electric vehicles are entering a decline, maintaining a 20% market share for pure electric passenger vehicles in China should not pose a significant challenge, even as hydrogen energy begins to dominate the new energy automotive sector.
The advantages of electric vehicles allow them to secure a stable niche market, catering to either budget-conscious consumers seeking affordable daily transportation, high-performance sports cars, or electric buses in urban areas. However, one of the challenges facing pure electric vehicles is the financial strain associated with their production, as many manufacturers struggle to turn a profit. For over a decade, substantial capital has been invested in electric vehicles, often resulting in financial losses, with Tesla being the only company among global electric vehicle manufacturers able to achieve profitability.