BEIJING -China’s car sales rose 14.4% in March from a year earlier, as government-subsidised trade-ins bolstered demand for electric vehicles and plug-in hybrids, despite deepening deflationary pressures in the world’s largest auto market.

Passenger vehicle sales hit 1.97 million units last month, and were up 6.1% to 5.18 million units in the first quarter, data from the China Passenger Car Association (CPCA) showed on Wednesday.

EVs and plug-in hybrids outsold gasoline cars for the first time in four months to make up 50.4% of overall sales in March.

The program likened to the U.S. “cash-for-clunkers” stimulus awards a shift toward EVs with higher subsidies and had covered 2 million cars as of early this year, as households remained cautious about spending amid job and income worries.

Chinese EV giant BYD, reliant on its home market for 90% of global sales, beat Tesla in global EV deliveries for the second straight quarter in the January-March period.

BYD kicked off a smart EV price war in February, prompting a slew of automakers including Leapmotor, Geely and Toyota to bill affordable smart driving technology as a standard setup rather than a premium feature on their new cars.

Nonetheless, a fatal crash involving one of Xiaomi’s SU7 sedans at the end of last month has stirred a debate over the safety of smart driving systems, prompting founder Lei Jun to vow to “respond to the concerns of families and society”.

Xiaomi, which has been on a roll since the SU7 launch in March last year, raised its 2025 target for EV deliveries to 350,000 units in mid-March.

Car exports fell 8% last month from a year earlier, reversing an 11% increase in February.

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