Sales of electric and hybrid vehicles jumped more than 40 percent in China last year, as demand for new energy models continues to surge and the sector remains entrenched in a grueling price war.
The Chinese electric vehicle (EV) market has witnessed explosive growth in recent years, driven in part by generous subsidies from Beijing.
However, the world’s largest automotive market has also seen fierce competition among domestic car manufacturers as a consumption slowdown fuels a price war that is weighing on profitability
Photo: AFP
Last year, almost 11 million new energy vehicles (NEVs) were sold, a year-on-year increase of 40.7 percent, the China Passenger Car Association (CPCA) said yesterday. NEVs accounted for nearly half — 47.6 percent — of all retail sales last year, the association said.
By comparison, such vehicles accounted for just 22.6 percent of sales in the European market in November last year, according to the European Automobile Manufacturers’ Association.
In China, NEV sales surpassed 1.3 million units last month, CPCA data showed, up 37.5 percent year-on-year and representing the fifth consecutive month of sales of more than one million.
Beyond just NEVs, the total number of vehicles sold last year in the Chinese market swelled 5.5 percent, reaching nearly 22.9 million units, the association said.
For EV companies, the price war is likely to carry on in the new year, CPCA secretary-general Cui Dongshu (崔東樹) said during a press conference yesterday.
More than 200 car models saw price cuts last year, compared with 148 in 2023, Cui added.
BYD has emerged as a clear leader in the Chinese market — the Shenzhen-based firm sold more than 4 million vehicles globally last year.
While BYD occupies roughly one-third of the Chinese market, the situation is bleaker overseas, where various governments have hiked customs duties on vehicle imports from China.
Last month, sales in foreign markets accounted for just 12 percent of BYD’s overall sales, according to the company’s figures.
“We are now experiencing significant pressure on exports,” Cui said, adding that Chinese NEV sales are “currently being suppressed by the European Union.”
The EU has said that extensive state support by Beijing for its domestic carmakers has led to unfair competition, with an investigation by the bloc finding that subsidies were undercutting local competitors.
Foreign automotive giants, on the other hand, are battling against slumping sales in the world’s second-largest economy.
Volkswagen AG’s vehicle deliveries fell 1.4 percent year-on-year last year, the German carmaker said yesterday, dragged down by fierce competition in China.
The VW brand, part of the larger Volkswagen group which includes Audi and Lamborghini among others, sold some 4.8 million vehicles worldwide last year, it said in a statement.
Deliveries rose about 20 percent in North and South America but shrunk 1.7 percent in Europe, the brand’s second-largest market by volume.
In China, VW’s most important market, sales plunged by 8.3 percent.
“2024 was a tough year worldwide, with a weak economy, political challenges and tough competition — particularly in China,” VW executive Martin Sander said in a statement.
Last month, Volkswagen reached an agreement with unions to cut 35,000 jobs across Volkswagen’s German locations by 2030. The drastic cuts should save about 4 billion euros (US$4.1 billion) a year in the medium term and avoid plant closures in Germany, which Volkswagen had previously warned might be required.
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