A local brokerage firm predicts that China’s new energy vehicle (NEV) market will rebound in the following two months after seasonal factors fade.
However, many carmakers revealed significantly lower January sales.
According to a research note released today by CICC analyst Qiu Xiaofeng, China’s wholesale sales of NEVs are projected to total 1.5 million units in the initial quarter and 9 million units overall, or a penetration rate of 39%.
January low point for latest sales
As China’s purchase incentives for NEVs expired at the end of last year, enabling some customers to bring forward demand, and as automakers decelerated sales and production during China’s Chinese New Year holiday, the team said January was the low point for recent sales.
According to projections made public by the China Passenger Car Association (CPCA) on January 28, retail sales of new energy passenger vehicles in China are anticipated to reach 360,000 units in January, up 1.8 percent from a year ago but down 43.8 percent from December.
China’s new energy passenger vehicle wholesale sales are anticipated to total 410,000 units in January, down roughly 45% from December and mainly unchanged from a year ago, according to another report published by the CPCA on February 3.
The CICC reported that some manufacturers actively encouraged sales and production to slow down in January.
There are only 20 days left in the sales cycle before the Chinese New Year holiday, and the recent trend of falling lithium carbonate prices is evident.
Encouraged to do price cuts
Numerous local governments have released NEV subsidy policies, and concerns about a new Covid outbreak are fading, according to CICC.
Following Tesla’s price cut, other automakers’ price cuts are expected to encourage accelerated demand release.
Furthermore, the team expects the intensive release of new models beginning in February to drive demand to recover above expectations.
CICC anticipates wholesale sales of new energy passenger vehicles in China will reach 1.5 million units in the first quarter, accounting for approximately 15.7 percent of annual sales and a penetration rate of 30.2 percent.
According to the team, sales in the second through fourth quarters will account for 20.7 percent, 27.6 percent, and 35.9 percent of yearly NEV sales, respectively, and penetration will be 36.6 percent, 41.7 percent, and 43.0 percent.
NEV sector to grow continuously
CICC insists that there is a high certainty that the NEV sector will continue to grow in the passenger car market.
According to the team, the cost of NEVs is falling faster than that of traditional internal combustion engine (ICE) vehicles, and they have lower operating prices, which will cause more Chinese consumers to abandon ICE vehicles.
NEVs are advancing much faster than ICE vehicles in terms of technology, and electric cars have the edge of rapid technological development in terms of battery technology and intelligence, according to the team.
CICC also stated that the penetration level of NEVs in China has reached around 30% and will enter a relatively slow growth phase following the rapid growth of the previous two years.
According to the team, steady or everchanging increases in penetration may become the new normal, particularly in the high penetration of the battery electric vehicle (BEV) market.
