BEIJING - China's new energy vehicle (NEV) sector continued to see substantial expansion in both sales and production in the first half of 2018, industrial data showed Wednesday.

NEV sales increased 111.5 percent year on year to 412,000 units in the first six months, while production rose 94.9 percent to 413,000 units, according to data from the China Association of Automobile Manufacturers (CAAM).

China has remained the world's largest NEV market for three consecutive years, as the country intensified efforts to encourage the use of NEVs to ease pressure on the environment by offering tax exemptions and discounts for car purchases. Some 777,000 NEV cars were sold in 2017.

The government expects annual NEV output to hit 2 million in 2020, and for NEV sales to make up 20 percent of the overall auto market by 2025.

China's auto market also expanded steadily in the reporting period. A total of 14.07 million vehicles were sold in China in H1, up 5.57 percent year on year, according to CAAM. Meanwhile, some 14.06 million vehicles were produced, up 4.15 percent.

Sales of passenger cars reached 11.78 million units, with commercial vehicles amounting to 2.29 million units, said CAAM.