Monthly Archive: June 2023

China launches nationwide promotions to boost auto consumption

The moves include holding auto festivals in 100 cities and promoting consumption of NEVs in rural areas.

China launches nationwide promotions to boost auto consumption-CnEVPost

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China has launched a nationwide promotion covering the rest of the year to boost auto consumption, which is critical to economic growth.

The Ministry of Commerce (MOC) announced specific arrangements in a notice issued today on a campaign to promote auto consumption, including holding auto festivals in 100 cities and promoting new energy vehicle (NEV) consumption in rural areas.

The MOC will promote local governments and enterprises to introduce initiatives to support auto consumption, use local financial resources, and encourage financial institutions to introduce auto credit financial support measures, according to the notice.

The MOC will organize the launch of the NEV consumption season campaign in the near future and guide various NEV consumption promotion activities in rural areas.

Car companies are encouraged to launch practical models suitable for rural areas, and the MOC will coordinate and promote the improvement of charging infrastructure systems in rural areas.

The China Association of Automobile Manufacturers (CAAM) was asked to organize auto companies to participate in these activities and to introduce preferential initiatives for car purchases, according to the notice.

At the same time, the notice stressed that local government departments should do their part in reviewing fair competition for support policies, including subsidies, that are planned to be introduced to ensure they are universally applicable to all enterprises.

The campaign will run from June to December, according to the notice.

The move comes at a time of weak growth in Chinese auto sales, with the sector facing challenges after state subsidies expired at the end of last year.

China's retail sales of passenger cars rose 28.6 percent to 1.74 million units in May, up 7.3 percent from April, according to data released earlier today by the China Passenger Car Association (CPCA).

China launches nationwide promotions to boost auto consumption-CnEVPost

From January to May, China's passenger car retail sales were 7.63 million units, up 4.39 percent year-on-year.

NEVs fared slightly better, but at a significantly lower rate than last year.

Retail sales of new energy passenger vehicles in China were 580,000 units in May, up 60.9 percent year-on-year and up 10.5 percent from April, according to the CPCA.

From January to May, retail sales of passenger NEVs in China were 2.42 million units, up 41 percent year-on-year. For comparison, last year's January-May passenger NEV retail sales grew 117.21 percent year-on-year.

China launches nationwide promotions to boost auto consumption-CnEVPost

China NEV retail up 10.5% MoM to 580,000 in May, CPCA data show

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China contributes 56% of global EV sales in Q1, Counterpoint says

The US overtook Germany as the world's second-largest EV market in the first quarter, while China remained in the lead, Counterpoint said.

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In the first quarter, the US overtook Germany as the world's second-largest electric vehicle (EV) market, while China still holds the lead, market research firm Counterpoint Research said in a report yesterday.

Global passenger EV sales grew 32 percent year-on-year in the first quarter, with one in seven vehicles sold in the quarter being electric, the report said.

Global EV sales were largely driven by China with 56 percent of total EV sales in the first quarter coming from this market, said Abhik Mukherjee, a research analyst at Counterpoint.

In China, while overall passenger vehicle sales fell 12 percent in the first quarter, EV sales rose a remarkable 29 percent year-on-year, the report said.

The removal of subsidies for NEV purchases in China led to lower-than-expected EV sales in January.

cut prices on its models globally in January, and then other car brands announced similar price cuts on their models starting in February, which led to improved sales of EVs, the report said.

During the February-March period, nearly 40 automakers, including , , , Volkswagen, BMW, Mercedes-Benz, Nissan, Honda and Toyota, cut the prices of their vehicles by hundreds to tens of thousands of dollars, which eventually stoked a competitive price war in China, the report noted.

Initially, it was thought that the price war would soon be over and the automakers would benefit from increased sales. However, as the price war continues to stretch, several Chinese automakers have reported reduced earnings or even losses, according to the report.

Globally, battery electric vehicles (BEVs) accounted for 73 percent of all EV sales in the first quarter, while plug-in hybrid electric vehicles (PHEVs) made up the rest.

The top 10 EV models accounted for 37 percent of total passenger EV sales in the first quarter, with Tesla's Model Y remaining the world's best-selling model, followed by Tesla's Model 3 and BYD's Song, Counterpoint said.

In the first quarter, Tesla's Model Y became the world's best-selling passenger car model, even surpassing traditional fuel cars, according to the report.

By the end of 2023, global EV sales are expected to exceed 14.5 million units, said Soumen Mandal, senior analyst at Counterpoint, adding that US EV sales are expected to grow significantly this year with the implementation of the tax credit subsidy.

China NEV retail up 10.5% MoM to 580,000 in May, CPCA data show

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China NEV retail up 10.5% MoM to 580,000 in May, CPCA data show

NEV penetration at retail in China was 33.3 percent in May, up 6.7 percentage points from 26.6 percent a year earlier and up from 32.3 percent in April.

Retail sales of new energy passenger vehicles (passenger NEVs) in China were 580,000 units in May, up 60.9 percent year-on-year and up 10.5 percent from April, according to data released today by the China Passenger Car Association (CPCA).

This is higher than the preliminary figure of 557,000 units announced by the CPCA on June 7, and in line with its estimate released on May 23.

Battery electric vehicles (BEVs) accounted for 388,000 in May, or 66.9 percent of all NEV retail sales. This was up 44.9 percent year-on-year and up 7.5 percent from April.

Plug-in hybrid vehicles (PHEVs) accounted for 192,000 units in May, contributing 33.1 percent of NEV retail sales, an increase of 109.1 percent year-on-year and up 17.22 percent from April.

Retail sales of all passenger vehicles in China were 1.742 million units in May, up 28.6 percent year-on-year and up 7.3 percent from April.

NEV penetration at retail in China was 33.3 percent in May, up 6.7 percentage points from 26.6 percent in the same month last year and up from 32.3 percent in April.

The penetration rate of NEVs was 57.1 percent for local brands, 23.0 percent for luxury brands and 4.0 percent for mainstream joint venture brands.

From January to May, retail sales of passenger NEVs in China were 2.42 million units, up 41 percent year-on-year.

Wholesale sales of passenger NEVs in China were 673,000 units in May, up 59.4 percent year-on-year and up 11.5 percent from April.

This means that the penetration of NEVs at wholesale in May was 33.7 percent, up 7.2 percentage points from 26.5 percent a year ago and down from 33.9 percent in April.

The penetration of Chinese domestic brands' NEVs at wholesale in May was 50.4 percent, compared to 33.6 percent for luxury brands and 4.3 percent for mainstream joint venture brands.

From January to May, wholesale sales of passenger NEVs in China were 2.78 million units, up 48 percent year-on-year.

In May, China exported 92,000 passenger NEVs, of which BEVs accounted for 92.6 percent. This represents a year-on-year increase of 135.7 percent, up 1.2 percent from April, and contributed 30.5 percent of all passenger vehicle exports.

Looking ahead, the CPCA believes it would be normal if Chinese passenger car sales in June were lower than a year ago, as China halved the purchase tax on major fuel vehicles starting June 1 last year, allowing for a big increase in sales that month.

BYD confident of gaining higher market share in next 3-5 years, says president

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Power battery industry faces serious overcapacity in China, says Changan chairman

China will need 1,000-1,200 GWh of power battery capacity by 2025, but the industry is already planning for 4,800 GWh of capacity, according to Changan's chairman.

The chairman of one of China's largest automakers has warned about oversupply in the power battery industry, at a time when the risk is a growing concern.

China's power battery industry is currently suffering from a serious overcapacity and the sector is bound to return to a rational state, Zhu Huarong, chairman of Changan Automobile, said today in a speech at an automotive forum in the southwestern Chinese city of Chongqing.

China will need 1,000-1,200 GWh of power battery capacity by 2025, but the industry is currently planning for 4,800 GWh of capacity, Zhu said.

In a speech at the 2022 China Auto Forum on November 9 last year, Zhu said the tight supply of chips and batteries facing China's new energy vehicle (NEV) industry had eased, but their expensive prices stand out, seriously affecting the profits and production of NEV companies.

High battery prices were caused by factors including raw material price increases, capital speculation, sellers' hesitation to sell and middlemen hoarding, Zhu said at the time.

Zhu's latest comments come as the issue of power battery overcapacity is a growing concern.

In a research note yesterday, Morgan Stanley analyst Jack Lu's team said that despite a near-term recovery in orders for China's battery industry, there will still be excess battery capacity and price competition is inevitable.

More and more second-tier battery suppliers are adopting increasingly aggressive pricing strategies, and may have to do the same, Lu's team said.

Power battery overcapacity is an industry consensus, but in the first quarter, expansion of power and storage batteries continued, the official Economic Information Daily said in a report yesterday.

In 2022, China's power battery shipments were about 480 GWh, while the installed power battery capacity was only about 260.94 GWh. Even counting the export volume and the installed power battery capacity in the segment including construction machinery, the current inventory pressure of the whole industry is still high, the report said, citing industry research institute GGII.

In the next few years, the structural overcapacity of power batteries will intensify, and the industry will enter a deep reshuffling stage, with a degree of competition that may be more severe than imagined, the report said.

China's power battery installed capacity in April was 25.1 GWh, up 89.4 percent year-on-year and down 9.5 percent from March, according to data released by the China Automotive Battery Innovation Alliance (CABIA) on May 11.

The power battery production in April was 47.0 GWh, up 38.7 percent year-on-year and down 8.3 percent sequentially, according to the CABIA.

May's data is expected to be available in a few days.

China EV battery installations in Apr: BYD regains top spot over CATL in LFP market

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