October Retail Sales of New Energy Vehicles in China to Hit 550K Units
On October 24, according to the China Passenger Car Association, it is estimated that retail sales of passenger cars in China this month would be about 1.91 million units, up 11.4% year-on-year, among which the retail sales of new energy vehicles would be about 550,000 units, up 73.5% year-on-year, with a penetration rate of about 28.8%.
By contrast, in September 2022, the retail sales volume of new energy vehicles in China was 611,000 units, up 82.9% year-on-year, of which the sales volume of pure electric vehicles and hybrid models was 457,000 units and 154,000 units respectively, and the overall penetration rate of new energy vehicles was 31.8%.
According to the retail target survey in October, 80% of automobile manufacturers in China have achieved double-digit year-on-year growth under the pressure of their annual sales targets. Many autumn auto shows will resume at the end of October and manufacturers will step up their annual sales drives before the expiration of the national purchase tax. Considering fallout from the chip shortage in October last year, the China Passenger Car Association expects the average daily retail sales in October this year to reach about 27% year-on-year.
According to the Ministry of Industry and Information Technology, from 2016 to 2022, the annual subsidy amount given by the state to new energy vehicle buyers increased from 860 million yuan to 10.54 billion yuan ($118 million – $1.45 billion), totaling more than 30 billion yuan. The number of new energy vehicles in China also increased from 20,000 at the end of 2012 to 11 million in June this year.
However, these subsidies will end on December 31, 2022. The cancellation of subsidies is a severe test for the new energy automobile industry. The entire industry is looking for ways to reduce manufacturing and marketing costs while ensuring the same quality. Difficulties such as chip shortages and price increases of raw materials are also plaguing these manufacturers.
Recently, BMW, Tesla, Volkswagen and other global automobile brands have announced plans to expand production in China, and strengthened cooperation with local suppliers. The country’s huge market capacity is one of the appealing factors.
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Chinese car companies have begun to accelerate their pace of exploring global markets. Instead of simply selling cars, they have set up R&D centers and service centers to form a whole value chain of R&D, vehicle manufacturing, parts supply, finance and logistics. According to the China Association of Automobile Manufactures, nearly 10 Chinese car companies have entered the European market, and one out of every 10 electric cars sold in Europe comes from China.