China's NEV sales surge amidst decline in internal combustion market
PUBLISHED
2024-07-10
Content
China's rising sales of so-called New Energy Vehicles (NEVs) can’t make up for the continuing weakness in sales of conventionally powered (or ICE, internal combustion) vehicles.
For the third month in a row, June saw Chinese car sales slide 6.7% year over year to 1.767 million units. That was up 3.2% from May, according to China’s Passenger Car Association.
Industry data showed that falling demand for petrol-powered cars plunged 27% to 910,000 units in June, with a shortage of new models being blamed. Analysts say it's another sign of the continuing reluctance of Chinese consumers to make large purchases.
This is why the Chinese government introduced a scrappage and replacement subsidy scheme earlier this year. Although it has kept the fall lower than it might have been, it has failed to boost sales for the past three months.
Sales of new energy vehicles surged 28.6% to 856,000 during the month, the second highest monthly figure on record behind last December’s 947,347 units. This was up a more sedate 6.4% from May.
The figures show the falling sales of conventional vehicles saw the share of total vehicle sales held by NEVs rise to 48% from about 35% in June 2023.
Battery electric vehicles (BEVs) accounted for 57.6% of all NEV retail sales in June at 493,000 units, up 9.9% year-on-year but down half a percent from May as BYD, the largest maker, pushed sales of plug-in hybrids (PHEVs) over BEVs.
Plug-in hybrid (PHEV) sales jumped 67% in June from a year earlier to 363,000 (or 42.4% of all NEV retail sales). That was up 17.4% from May.
NEV exports also fell after the first round of tariffs were announced for Chinese electric vehicles, with the final levels for the next four months announced last Thursday, July 4.
NEV exports rose 12.3% in June from a year earlier but were down 15.2% from May, the data showed, with NEV exports accounting for 21% of total car exports, down 3 percentage points from June 2023.
Exports by Tesla from its Shanghai plant played a major role, with a fall in the June quarter to their lowest level since the third quarter of 2022 when the factory was closed because of Covid restrictions.
Europe, Southeast Asia, and Australia are major export markets for Tesla EVs made at the Shanghai plant.
Meanwhile, the Chinese government said that by June 30, ownership of NEVs totaled 24.72 million vehicles, accounting for 7.2% of the country’s total vehicle ownership of 440 million.
According to China's Ministry of Public Security, that was up from 20.41 million NEVs at the end of 2023, or 6.07% of the total ownership of 336 million vehicles.
Author
Name | Glenn Dyer | Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey. |