Sales of electric and hybrid vehicles jumped more than 40 percent in China last year, as demand for new energy models continues to surge and the sector remains entrenched in a gruelling price war.

The Chinese electric vehicle market has witnessed explosive growth in recent years, driven in part by subsidies from Beijing.

But the world's largest automotive market has also seen fierce competition among domestic car manufacturers as a consumption slowdown fuels a price war that is weighing on profitability

In 2024, almost 11 million new energy vehicles (NEVs) were sold, a year-on-year increase of 40.7 percent, the China Passenger Car Association (CPCA) said Thursday.

NEVs accounted for nearly half - 47.6 percent - of all retail sales last year, the association said.

By comparison, such vehicles accounted for just 22.6 percent of sales in the European market in November, according to the European Automobile Manufacturers' Association.

In China, NEV sales surpassed 1.3 million units in December, CPCA data showed, up 37.5 percent year-on-year and representing the fifth consecutive month of sales of more than one million.

Beyond just NEVs, the total number of vehicles sold last year in the Chinese market swelled 5.5 percent, reaching nearly 22.9 million units, the CPCA said.

For EV companies, the price war is likely to carry on in the new year, CPCA secretary general Cui Dongshu said during a Thursday press conference.

More than 200 car models saw price cuts last year, compared to 148 in 2023, Cui added.

BYD has emerged as a clear leader in the Chinese market. The Shenzhen-based firm sold more than four million vehicles globally in 2024. (AFP)