China's electric vehicle (EV) sales experienced a slowdown in the initial months of this year, according to industry data released on Friday. Market leader BYD initiated a deeper round of price cuts, intensifying competition in the sector.
Data from the China Passenger Car Association revealed an 18.2% increase in battery-powered EV sales in January-February, compared to 20.8% for the entire year of 2023.
When considering plug-in hybrids, new energy vehicle (NEV) sales witnessed a 37.5% surge in the two-month period, surpassing the 36.2% growth recorded in 2023.
NEVs constituted 33.5% of total car sales in January-February, up from 28.3% the previous year, gaining market share from petrol-powered cars, which saw a 7.8% rise in sales.
Cui Dongshu, the secretary-general of the association, noted that some EVs, priced similarly to petrol-powered cars, are impacting the latter's sales. BYD, responding to the competitive landscape, implemented significant price reductions this year, covering a broad range of models.
The company lowered prices by an average of 17% for the 13 models that constituted 93% of its total 2023 China sales. Other automakers, including Geely Auto, GAC Aion, Leapmotor, and Xpeng, also joined the price war with discounts ranging from 9% to 17%.
Despite these measures, BYD's NEV market share decreased to 30.7% in February, its lowest since June 2022. BYD, the world's largest EV seller, primarily in China, exported 19% of its cars overseas in February, marking its highest ratio ever.
The association's data indicated that China's car exports in February rose by 18% to 298,000 passenger cars, with NEVs accounting for 26.4% of the total.
While exports have become a vital growth engine for Chinese carmakers facing weakening domestic demand, they have also led to international scrutiny. European authorities are investigating whether Chinese EV makers benefit unfairly from state subsidies, and the U.S. has initiated a probe into the potential use of Chinese-made vehicles for spying on Americans.
Paraphrasing text from "Investing" all rights reserved by the original author.
