China Passenger Car Association’s (CPCA) recently released data revealed that the new passenger NEV retail sales in the country declined 48.3% to 332,000 units in January 2023 from December 2022’s record of 640,000 units. As for the year-on-year changes, they fell by 6.3%.
Notably, the result failed to achieve CPCA’s January 28 projection of 360,000-unit sales, suggesting that China’s NEV market weakened in late January.
As for the overall market, China reported a YoY sales decline of 37.9% to 1.293 million units. It also represents a significant drop of 40.4% from 2.17 million units in December 2022.
New passenger NEV retail sales in China – January 2023
China reported sales of 214,000 all-electric vehicles (BEVs) in the first month of the year, representing a YoY decline of 22.2% and also down by 53.2% from a month ago. Nonetheless, it continued to dominate the NEV market with a share of 64.5%.
Plug-in hybrids (PHEVs) saw a YoY sales growth of 48.8% to 118,000 units in January, with a market share of 35.5%. However, its sales also declined by 36.1% from December 2022.
| Sales | Changes from December 2022 | |
| BEV | 214,000 | down 53.2% |
| PHEV | 118,000 | down 36.1% |
| Total | 332,000 | down 48.3% |
All that said, CPCA claimed that China’s NEV industry had the worst January in 2023 in over a century.
NEV penetration rate in January 2023: Retail and Wholesale
Notably, the NEV’s retail penetration rate was 25.7% in January. It represents an increase of 8.7 percentage points from January 2022’s record of 17%. However, it also declined from December’s record of 29.5%.
Per the report, NEV penetration rates varied across local Chinese brands (43.8%), premium brands (21.4%), and mainstream joint venture brands (2.7%).
As for wholesale, China reported a YoY sales decline of 7.3% and a month-on-month decline of 48.2% to 389,000 units in its NEV sales in January.
Notably, NEVs’ wholesale penetration rate reached 26.8% last month. It represents a decline from December’s record of 33.8%. However, it saw an increase of 7.4% percentage points over the 19.4% penetration rate in the same period last year.
China’s NEV sales may rebound in February 2023
The CPCA claimed that China’s NEV industry changes as consumers wait for the government’s early-year plans. Another significant reason that caused the weak results in January is the removal of subsidies, which caused price increases in NEVs.
“At the beginning of the new year, consumers have entered a transitional stage of policy wait-and-see, and the outbreak of new car sales last year has also highlighted the service problem during the peak charging period during the Spring Festival holiday. After the epidemic, the cost of new energy rigid models continues to come under pressure, the price adjustment brought about by the subsidy decline is complicated, and the market pattern of new energy vehicles is being reshaped.”
CPCA
That said, as customers have already surpassed those phases, the second month of the year may be better than January. The CPCA expects that NEV sales in the country will rebound in February, considering the month’s 20 working days that may boost production.
