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Trade Trends News
11-03-2024
China's electric vehicle sales slowed in the first few months of the year, industry data showed, with competition intensifying as market leader BYD led a deeper round of price cuts.
Pure EV sales rose 18.2 percent from January to February, compared with 20.8 percent for the full year of 2023, according to data from the China Passenger Vehicle Information Association.
Together with plug-in hybrids, new energy vehicle (NEV) sales rose 37.5% in two months, compared with 36.2% in 2023. This result outpaced the 16.3% growth in the overall passenger car market as widespread discounts spurred demand.
New-energy vehicles accounted for 33.5 percent of total car sales in the January-February period, compared with 28.3 percent a year earlier, stealing market share from gasoline-powered vehicles, whose sales rose 7.8 percent.
Cui Dongshu, the association's secretary-general, told reporters on Friday that the prices of some electric cars are comparable to those of gasoline-powered vehicles, putting pressure on the latter's sales.
BYD has cut prices more than its rivals this year and across more models. The company has cut prices by an average of 17 percent on 13 models that will account for 93 percent of its total sales in China in 2023, Reuters calculations show.
The price cuts include nearly 12 percent for its best-selling Yuanjia crossover, or Atto 3 overseas, and 5 percent for its least expensive electric car, the Seagull.
More than a dozen automakers joined the price war, including Geely (HKEx: 0175), which opened a new tab, Guangqi Aian, Zero Run Motors (HKEx: 9863), which opened a new tab, and Xiaopeng (HKEx: 9868), which opened a new tab, with discounts mostly ranging from 9 percent to 17 percent.
The price cuts come as BYD's market share for new energy vehicles fell to 30.7 percent in February, its lowest level since June 2022, Reuters calculations show.
BYD became the world's biggest seller of electric cars, beating U.S. rival Tesla (TSLA.O) to open the new tab even though most of its sales are in China.
The company exported 19 percent of its cars overseas in February, the highest percentage on record. in 2023, it sold 8 percent of all outbound cars.
China's auto exports rose 18 percent to 298,000 passenger cars in February, with new-energy vehicles accounting for 26.4 percent of the total, association data showed.
Exports have become a growth engine for automakers struggling with weak domestic demand. They have been selling new EV models in large numbers to markets such as Australia, where there are no trade barriers and where sales have surged thanks to subsidies, tax incentives, and high fuel prices.
In some markets, however, China's growing automotive export prowess has sparked friction. European authorities have begun investigating whether Chinese electric car makers are unfairly benefiting from state subsidies, while the United States has begun investigating whether Chinese-made cars could be used to spy on Americans.
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