China’s burgeoning new energy vehicle (NEV) market encountered a notable downturn in January, attributing the decline primarily to seasonal fluctuations. Data released by the China Association of Automobile Manufacturers (CAAM) indicated a substantial 38.79% drop in NEV sales compared to December, with total sales reaching 729,000 units—an impressive 78.68% increase year-on-year.
Breaking down the NEV sales figures, battery electric vehicles (BEVs) bore the brunt of the downturn, witnessing a significant 46.06% decrease from December, with sales totaling 445,000 units. In contrast, plug-in hybrid electric vehicles (PHEVs) fared relatively better, experiencing a milder 21.98% decline to 284,000 units during the same period.
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Despite the month-on-month decline, the year-on-year growth remained robust, underscoring the continued momentum in China’s NEV market. The surge in NEV sales compared to January last year can be partially attributed to the low base effect caused by the timing of the Chinese New Year holiday, which fell later in January 2023 (January 21-27), compared to February this year (February 10-17).
Fuel cell vehicle sales painted a different picture, with January witnessing a noteworthy 133.3% increase year-on-year, signaling potential growth and diversification within China’s NEV market.
January typically marks a low point for vehicle sales in China, following the peak sales period at the end of the preceding year. This trend is further accentuated by the Chinese New Year holiday period, during which consumer spending traditionally slows down.
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A notable shift in NEV penetration was observed, dropping to 29.9% in January from December’s 37.7%. This represents the first instance since April 2023 that NEV penetration has fallen below the 30% mark, indicating a temporary setback in the market’s momentum.
Domestic NEV sales saw a significant year-on-year surge of 93.54% but experienced a notable month-on-month decline of 41.76%, reaching 629,000 units in January. Similarly, exports from China faced a downturn, with NEV exports declining by 9.01% to 101,000 units.
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BEV exports recorded a 17.4% decline from December to 82,000 units, while PHEV exports bucked the trend, rising by 52.2% to 18,000 units. This highlights a potential shift in export dynamics within China’s NEV sector.
The January sales data underscore the resilience and dynamism of China’s NEV market, despite short-term fluctuations driven by seasonal factors. The industry’s ability to navigate these challenges bodes well for its long-term growth and sustainability.
