2028 Is the Year ICE Dies in China

By Chris / EV Curve Futurist

It’s taken a bit of time to put this update together — not due to a lack of direction, but because the data flying around during the first half of 2025 has been anything but consistent. Conflicting reports on 2024 passenger vehicle sales in China made it difficult to confidently validate the trajectory of NEV growth and ICE decline. Now that the dust has settled, it’s clear we are entering a new phase of the disruption curve — one where BEVs are set to take firm control of the growth story while PHEVs begin their decline, and ICE vehicles edge closer to extinction.

In this article, I revisit my original November 2024 projections, break down where I under- or overestimated key segments, and present an updated market share table through to 2030.

2024 Recap: Where the Market Landed

China’s total passenger vehicle sales in 2024 came in at ~27.56 million. Here’s how the key segments performed:

BEV sales: 7.05 million (~25.6%)
PHEV + EREV sales: 4.6 million (~16.7%)
ICE + HEV sales: 15.91 million (~57.7%)
NEV total share: 42.3%

I had overestimated BEV sales, underestimated the explosive growth of PHEVs/EREVs, and predicted a steeper ICE collapse than what materialized. But the direction of travel was correct: ICE is declining, and NEVs are rapidly gaining share. What’s changed is the slope of that transition.

Key Adjustments in My Updated Model

1. ICE Now Includes HEVs

I’ve chosen to include hybrid-electric vehicles (HEVs) such as the Toyota RAV4 Hybrid in the broader ICE category. These vehicles still rely on combustion for propulsion and fuel economy, and from a disruption standpoint, they are not materially different from efficient ICEs. They are not plug-in capable and therefore fall outside the NEV definition in China. Since their engines still run on fossil fuels and offer no path to full electrification, they belong in the same declining category.

2. Why I Don’t Separate EREVs from PHEVs

While EREVs (Extended Range Electric Vehicles) and PHEVs (Plug-in Hybrid Electric Vehicles) differ in architecture and user experience, they serve the same transitional role in this disruption. In China, both are grouped under NEVs and often marketed similarly. Consumers don’t necessarily draw a sharp line between them, and from a market share perspective, their curves are now peaking together. While EREVs offer a more EV-like drive, both tech paths are on a similar trajectory — rising fast through 2023–24, peaking in 2025, and entering decline from 2026 onward as BEVs become the default.

What Changed in 2025 So Far

PHEV/EREV growth has slowed: After explosive growth in 2023–24, the segment is showing signs of saturation in urban markets.
BEVs are retaking the growth baton: With compelling launches like the Xiaomi SU7/YU7, Zeekr 007, Xpeng G6, and ultra-affordable BYD Seagull, consumer demand is clearly swinging back to BEVs.
ICE sales are falling slower than expected: Rural demand, used ICE affordability, and fleet inertia are keeping ICE on life support through 2026. However, it’s clearly terminal.
TaaS (Transport as a Service) is becoming real: Robotaxi pilots are scaling, and city planners are designing out private car ownership. I now expect total car sales to peak in 2025 and decline gradually from 2026 onward.
Chinese brands are dominating legacy holdouts: The decade-long resistance to electrification from legacy OEMs like Toyota, Nissan, and VW has severely undermined their market position. Despite now partnering with Chinese automakers to co-develop competent BEVs, these brands are struggling to regain relevance. Their brand equity is eroding rapidly in the world’s most competitive EV market.
BYD dethroned Tesla in 2024: The BYD Song was the best-selling car in China, knocking Tesla’s Model Y off the top spot. Looking forward, Tesla is expected to continue sliding in the rankings as domestic giants like BYD, Geely, Xpeng, and Xiaomi expand their model lineups, scale production, and eat into both the premium and mainstream market segments.
Policy tailwinds are strengthening: Beijing is expected to tighten NEV quotas and expand low-emission zones post-2025. Provinces like Hainan already have 2030 ICE ban targets in place. These regulatory shifts could accelerate the transition faster than even my updated table reflects. Post-2025, we’ll likely see broader adoption of city-specific bans on ICE registrations, congestion charges for combustion vehicles, and fast-tracked electrification mandates for commercial fleets. Local subsidies are also being quietly redirected from consumer subsidies toward grid and charging infrastructure — signaling a deeper strategic commitment to long-term BEV dominance.
Urban-rural split matters: NEV penetration in Tier-1 cities like Shanghai and Shenzhen now exceeds 60%, while rural and Tier-3+ regions still sit below 25%. But that gap is narrowing rapidly. Affordable BEVs like the BYD Seagull and Wuling Bingo are breaking through price barriers, and local governments are ramping up investment in rural charging infrastructure. As a result, many less-developed areas are bypassing hybrids entirely and jumping straight from ICE to full electric — a compressed, leapfrog-style disruption.
Battery tech & infrastructure are tipping points: CATL’s Shenxing ultra-fast LFP batteries (10–80% in 10 mins) and the rollout of 800V platforms in affordable BEVs are dismantling the last excuses to buy a PHEV. By 2027, over half of China’s public charging network is expected to support ultra-fast charging.

Updated Market Share Table (2024–2030)

The following chart visualizes the rapid shift in China’s passenger vehicle market. It shows BEVs overtaking ICEs and PHEVs in market share dominance between 2025 and 2030.

This updated table includes a revised 4.2% ICE/HEV holdout in 2028 — a nod to regional drag, rural friction, and slower-moving fleet segments. The BEV share now accelerates more naturally, retaking the growth lead from PHEVs/EREVs by 2026. Total vehicle sales begin to decline after 2025, reflecting the growing impact of TaaS and urban saturation.

Why 2028 Will Be the Tipping Year for BEVs

Many ask why I project such a sharp acceleration in BEV market share specifically in 2028 — sharper than anything we’ve seen even in mature EV markets like Norway. Here’s why:

ICE Supply Chain Collapse: By 2028, legacy OEMs will face severe pressure as ICE-specific parts suppliers shrink or shutter entirely. Maintaining production for a dying drivetrain becomes economically unsustainable. Supply chain fragility will hit availability and serviceability.
Oil Volatility and Fuel Costs: As global oil demand declines unevenly, pricing volatility will increase. Expect sharp fuel cost spikes in markets without hedging mechanisms. This economic uncertainty will push even late adopters toward stable, electricity-based mobility.
Regulatory Pressure and Ownership Costs: China is tightening regulations fast. Expect punitive taxes on new ICE purchases, rising maintenance and insurance costs, and fewer city registration licenses for fossil fuel vehicles. Even owning an existing ICE vehicle will become economically burdensome.
Used ICE Value Collapse: As BEV penetration passes 70%, resale values for ICE cars will crater. Consumers will begin to see ICE as a stranded asset, accelerating the behavioral shift.
Consumer perception shifts irreversibly: By 2028, owning a BEV in China will no longer be about “going electric” — it will be the expected norm. ICE and even PHEVs will increasingly be seen as outdated tech with poor resale value and higher lifetime costs. The prestige curve flips, and cultural momentum moves with it.
Fleet Electrification Tipping Point: Large commercial and municipal fleets — traditionally laggards — will begin large-scale BEV rollouts as TCO becomes undeniable and government mandates kick in.
Cultural Shift Solidifies: The EV is no longer seen as the future — it becomes the default. PHEVs and ICEs will be associated with compromise or obsolescence.

2028 won’t just be another year on the disruption curve. It will be the tipping point — the moment when structural resistance collapses and EV inevitability becomes mainstream consensus.

Final Thoughts

PHEVs bought BEVs time. Now BEVs are returning the favor by ending the PHEV era. China is entering its final phase of combustion — and this time, there’s no turning back. As charging speeds leap, battery costs plunge, and 800V BEVs flood every price segment, the disruption is no longer coming. It’s already here. We’re just refining the landing curve.

The 2030 destination hasn’t changed — only the exact route we take to get there.

Which legacy automaker survives the EV shakeout in China? Let me know in the comments.

References

Global Comparison: No other major auto market is moving as fast or as comprehensively. Norway may have reached 90% EV sales in 2024, but it’s a tiny market of 5 million. The EU still has legacy resistance, the U.S. is politically fragmented, and India and Africa are just beginning. China’s scale, industrial capacity, and central planning coordination make its transition unprecedented — not just in speed, but in completeness.