China’s automotive sector extended its upward momentum in April, marking a third consecutive monthly rise in passenger car sales, driven largely by government-backed incentives for trading in older vehicles. Sales surged by 14.8% compared to the same month last year, totaling 1.78 million units, according to figures released Sunday by the China Passenger Car Association (CPCA).

For the January-April period, cumulative sales hit 6.97 million units, up 8.2% year-on-year, buoyed by a nationwide scheme offering generous subsidies—especially for consumers upgrading to electric and hybrid models.

Sales of new energy vehicles (NEVs), which include fully electric cars and plug-in hybrids, soared by 33.9% in April from the prior year, accounting for over half (50.8%) of all passenger car sales—a significant milestone that underscores China’s accelerating shift away from fossil fuels.

As of April 24, a total of 2.71 million cars had been replaced under the government’s vehicle trade-in program, which prioritizes greener alternatives with higher financial incentives, helping to offset any negative sentiment stemming from rising U.S. tariffs on Chinese goods.

However, car exports saw a modest decline, slipping 2.2% in April following an 8% drop in March, signaling ongoing strain in international markets amid growing geopolitical tensions.

Domestically, enthusiasm for autonomous-driving features appears to be waning. Once a major selling point during an intense price war among Chinese automakers, the spotlight on advanced driver-assist systems is dimming following regulatory scrutiny. The shift began after BYD made headlines in February by announcing it would equip all vehicles with its “God’s Eye” system as standard.

Public perception cooled, however, after a fatal accident in March involving a Xiaomi SU7 electric sedan, where a transition from the automated-driving system to manual control ended in a crash and fire. The incident prompted authorities to crack down on exaggerated marketing language around "smart" and "autonomous" technologies.