China Scales Back EV Incentives as BYD Pushes for Overseas Growth
China's electric vehicle market faces a pivotal shift as government subsidies are halved, removing full tax breaks for new energy vehicle purchases. The policy change, effective January 1, coincides with weakening domestic demand and intensified local competition.
BYD, having surpassed Tesla as the global EV leader in 2023, now aims for 1.2 million overseas sales this year—a 14% increase from 2023's 1.05 million exports. This strategic pivot comes as Citigroup analysts project even higher 2026 export targets of 1.5-1.6 million units.
Market analysts anticipate a slowdown, with Bloomberg forecasting just 10% growth for EV and plug-in hybrid sales in 2026. The subsidy rollback marks a maturation phase for China's EV sector, forcing manufacturers to compete without substantial government support.
