China set to achieve 9 million new energy vehicle sales in 2023

China set to achieve 9 million new energy vehicle sales in 2023

Industry experts anticipate that China will witness the sale of approximately 9 million new energy vehicles (NEVs) this year. Despite policy shifts impacting the sector’s stability, the NEV market’s robust growth remains certain and has emerged as a significant factor in stabilizing consumption trends.

Chen Shihua, Deputy Secretary-General of the China Association of Automobile Manufacturers, noted that NEV sales have exhibited substantial growth in the first half of the year, and a combination of government policies and resurgent consumer demand will maintain this upward trajectory.

“The policies of the automotive industry this year have largely focused on supporting NEVs, encompassing incentives for NEV consumption in rural regions, expanded rural charging infrastructure, and extended purchase tax reduction policies,” Chen explained.

He acknowledged that while the initial months of this year saw a decline in NEV sales compared to the same period last year due to the phased-out subsidies implemented since 2009, the core driving force in the Chinese market remains consumer preference.

Data from the China Association of Automobile Manufacturers revealed that NEV sales reached 780,000 units in July, marking a 31.6% YoY increase. Cumulatively, NEV sales for the first seven months of the year totaled 4.53 million units, reflecting a 41.7% YoY growth.

The ascendancy of NEVs has bolstered the market share of domestic Chinese brands. In July, these brands commanded a 57.2% share of the country’s passenger car market, with a January to July average of 53.8%.

Wang Chuanfu, Chairman and President of BYD, projected that Chinese brands could hold a 70% market share in China by 2025, attributed to their prominence in the NEV sector.

Hans-Paul Burkner, Global Chair Emeritus of Boston Consulting Group, emphasized that electric cars underscore China’s ascent up the value chain, boosted by cost competitiveness, quality, and innovation.

He Rongliang, a researcher at the China Center for Information Industry Development, highlighted Chinese manufacturers’ leadership in transitioning from mechanical hardware to electronic devices and software within the NEV sector. He emphasized their advancements in critical technology areas like LiDAR, onboard chips, mapping, algorithms, computing platforms, and autonomous driving systems.

China has maintained its position as the world’s largest producer and consumer of NEVs for eight consecutive years. In 2022, electric vehicles constituted a quarter of total passenger car sales in China, surpassing figures for the US and Europe. HSBC predicts that China’s EV penetration rate could reach 90% by 2030, further solidifying the nation’s EV dominance.

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