China's auto sales last year grew for the first time since 2017 in part because of strong demand for new energy vehicles (NEVs), which saw sales jump 1.5 times in 2021, according to the industry data released Wednesday.
Overall sales in the world's biggest car market rose 3.8% year-over-year, after monthly sales of 2.79 million vehicles in December brought total sales for 2021 to 26.28 million, data from the China Association of Automobile Manufacturers (CAAM) showed.
After decades of upbeat growth, China's car market started contracting in 2018 under pressure from the phasing out of some tax cuts, a trade war between Washington and Beijing as well as the fallout of the COVID-19 pandemic.
The market began to bounce back in late 2020 but was pulled down by a global shortage of semiconductors, used in everything from brake sensors to power steering to entertainment systems, which led automakers around the world to cut or suspend production.
In December, China's auto sales fell 1.6% from a year-ago period, the eighth consecutive monthly drop, CAAM data showed.
But the sales of NEVs were a bright spot, including battery-powered electric vehicles, plug-in petrol-electric hybrids and hydrogen fuel-cell vehicles, showing strong momentum with a growth of 157.5% to 3.52 million units in 2021.
In December alone, 531,000 NEVs were sold, representing a surge of 114% year-on-year. China has in recent years heavily promoted NEVs as part of its efforts to curb air pollution.
CAAM said in December that it expects automobile sales to rise 5.4% to 27.5 million this year, and for NEV sales to grow 47% to five million.