by Jiang Yiman

In 2024, premiums for new energy vehicle (NEV) commercial insurance in China surpassed 100 billion yuan for the first time, reaching 117.7 billion, a sharp increase of over 50% from the previous year. Claims paid also rose significantly, growing by over 60% to 58.7 billion yuan, underscoring the rapid growth of this sector.

This surge in NEV insurance aligns with the booming NEV market. According to the China Passenger Car Association (CPCA), NEV production rose by more than a third, while domestic sales grew nearly 41%, outpacing the previous year’s growth rate. NEVs now account for nearly half of all passenger vehicle sales in China.

Looking ahead, the CPCA expects government subsidies for trade-ins to remain steady in 2025, with domestic car sales projected to exceed 23 million units. NEVs are forecast to make up over 57% of these sales, reflecting the sector’s growing dominance.

Recognizing the market's potential, NEV manufacturers have moved aggressively into the insurance business. In 2024, Xiaomi entered the sector indirectly by acquiring a stake in a property insurance company. NIO obtained an insurance brokerage license through an acquisition, following similar moves by Li Auto and BYD in 2022. BYD also launched its own property insurance company after acquiring another firm and rebranding it.

BYD Property Insurance has emerged as a standout player. By late 2024, its average insurance premium per vehicle was nearly double that of traditional insurers like PICC and Ping An. This premium advantage highlights the strategic alignment between NEV manufacturers and the insurance sector, as they capitalize on the unique needs of this growing market.

The integration of insurance into the NEV ecosystem reflects a broader trend where automakers aim to capture more value across the customer lifecycle. As the NEV market continues to expand, this strategy is expected to reshape the automotive insurance landscape in China.

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