(Yicai) Oct. 29 -- As the demand for vehicles with internal combustion engines is still there, it is too early to consider their gradual elimination, Cui Dongshu, secretary-general of the China Passenger Car Association, told Yicai.

At wholesale last month, fossil fuel-powered car sales rose 6.4 percent to about one million units from a year ago, according to dats from the China Association of Automobile Manufacturers. In the first three quarters, they rose 1.7 percent to about eight million, compared with an 18 percent drop last year.

Meanwhile, retail sales fell 4 percent year on year, despite rising 5 percent from August, per figures from the China Passenger Car Association. In the nine months ended Sept. 30, they shrank 4 percent from the same period of last year, compared with a 14 percent drop in 2024.

Cui linked the sales recovery to government subsidies. This year, owners scrapping fuel cars with engines of 2.0 liters or less can receive CNY15,000 (USD2,110), while those trading-in such vehicles are eligible for as much as CNY13,000.

Moreover, markdowns on ICE cars have been much steeper than those for new energy vehicles. Discounts for NEVs remained at a mid-to-high level of 10.2 percent last month, compared with 23.9 percent for fuel autos, staying around the 22 percent level for the 10th straight month, according to the CPCA.

Another factor is that ICE vehicles are also starting to have smart features. Newly launched models, including those pending approval by the Ministry of Industry and Information Technology, boast major improvements in intelligent driving, smart cockpit, connectivity, and interactive functions.

In addition, some automakers have shifted their strategies to jointly develop new energy and ICE vehicles. For example, Geely Automobile Holding recently announced that it will continue to release new fuel vehicles, as they account for about half of its total sales.

Of the 75 new models launched last month, 35 were powered by fossil fuel, while 16 of the 35 released this month were, accounting for about half of the total in both periods, according to incomplete statistics compiled by Yicai.

Despite the increase in fuel car sales, NEV sales are the fastest growing in China. In September, the adoption rate of NEVs was 53.5 percent at wholesale and 57.8 percent at retail, with both figures setting new record highs, according to the CPCA.

Editor: Futura Costaglione