EV Sales In China Continued Their Upward Climb In May – CleanTechnica

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Things are happening in the new car market in China that those of us outside of China may not fully understand. At the end of May, BYD announced sweeping price cuts of up to 34 percent, a move that sent shockwaves through the domestic industry and sent stock valuations — including its own — tumbling. What confused some people was that the price cuts are theoretically going to expire at the end of June, and maybe they will. But one of our sharp-eyed readers pointed out that the price cuts include credit for a scrappage incentive for those who trade in an older car. This is not dissimilar to Tesla showing prices that include projected savings or federal incentives that the buyer may or may not ever realize.

In any event, BYD announced it was reducing the price of the BYD Seagull by 20 percent to 55,800 yuan ($7,780). The dual-motor Han PHEV was cut by 34 percent to 102,800 yuan ($14,290). Bloomberg analyst Tim Hsiao said the new pricing plan may spark a “prolonged price war,” which could have ripple effects that extend into into the second half of this year. Other brands will have to either increase their own discounts or concede market share, said Bloomberg Intelligence analyst Joanna Chen.

Last week, the Chinese government summoned the heads of the major car companies to a “come to Jesus” meeting in Beijing, at which it urged the companies to “self regulate,” according to Bloomberg. It reported on June 5 that it is “rare for China’s market, industry, and economic regulators to jointly host a meeting with the car industry on operational matters like pricing. The move shows how much scrutiny the nation’s top leadership is paying to the sector, amid concerns the price war is becoming unsustainable and could send weaker companies into bankruptcy. However, the gathering didn’t result in a mandatory directive and it’s not clear what consequences manufacturers would face if they don’t follow the verbal warnings.”

NEV Sales Up Strongly In China

But before all those price cuts were announced, the Chinese market for new energy vehicles — which includes both plug-in hybrid and battery electric cars — was perking along quite nicely. CnEVPost reported this week that, according to data published by the China Association of Automobile Manufacturers, 1,307,000 NEVs (new energy vehicles) were sold in China in May. That is an increase of 37 percent compared to the same month last year and 6.6 percent compared to April, making May the best month for NEV sales so far this year. Every month of the year has been above the comparable figure for the previous year.

What the data reveal is that the market share of NEVs in China is rising again. In May, the data show that 48.7 percent of all new cars were new energy vehicles, which is well above the 2024 average of 40.9 percent and also slightly above the share in preceding months. In March, NEVs were 42.4 percent of the market and in April that figure was 47.3 percent. Prior to May, their market share exceeded the 45 percent mark only once.

In 2021, the NEV share was below 20 percent of all sales. At the end of 2022, they cracked the 30 percent mark on a monthly basis for the first time. Since the middle of 2024, NEV market share has been consistently above 40 percent except for January of this year when sales were off considerably as the result of the end of some EV incentive programs.

In the US, plug-in hybrids are generally looked on with skepticism, as they are neither fish nor fowl. But in China, they are often quite different than the namby-pamby offerings available in America. Some PHEVs in China have a combined range of 600 miles or more, with the ability to drive on battery power alone for 150 miles or more. The May sales figures show 834,000 battery electric cars were sold in May. That’s up 43 percent from May of 2024 and 1.5 percent over April. Plug-in hybrid sales in May were 473,000 units, which was up 27 percent over May of 2024 and a 17 percent increase from the prior month.

Overall, the Chinese new car market in May saw sales of 2.69 million — 11.2 percent more than in the previous year and 3.7 percent more than in April. It should be noted that the CAAM data includes both sales within China and exports. The numbers for all NEVs show in-country sales of 1,095,000 units — up 28 percent year on year and 17 percent higher than in April.

212,000 cars were exported in May, a new record for the Chinese auto industry and a 120 percent increase over May of 2024. Much of the growth in exports is attributable to plug-in hybrids. Although battery electric exports rose by 80 percent year on year in May, PHEV exports rose by a stunning 240 percent.

BYD continues to be the dominant automaker in China. In May, it sold 376,930 NEVs, up 14 percent year on year and up 1 percent over April. The company sold more battery electric cars than PHEVs for the second month in a row, something that has not happened at BYD since early in 2024. In terms of exports, BYD reached a sixth consecutive record month, with 89,047 vehicles shipped to overseas markets — a 137 percent increase year on year.

Tesla Sales Continue To Decline

Of particular interest to many CleanTechnica readers is this bit of information from China: Tesla sold 61,662 cars in May, which was down 15 percent from May of last year. According to CnEVPost, this marks the eighth consecutive month that Tesla has sold fewer vehicles manufactured at its Shanghai Gigafactory than it did in the same period the previous year. It is not known how many units Tesla exported from China in May.

In the period from January to April of this year, Tesla China sold just under 300,000 vehicles, including exports. That’s a decrease of 18 percent compared to the same period a year ago. For a company that once boosted it would double sales every other year until 2030, that is a troubling statistic.

Even in Europe, Tesla may soon be playing second fiddle to BYD. As we reported recently, according to market research firm JATO Dynamics, BYD sold more electric vehicles in EU countries in April than did Tesla — 7231 to 7165. Admittedly, that is not a huge difference and it is just one month (at the beginning of the quarter), but as Felipe Muñoz, global auto industry analyst for JATO, said after the numbers were released, “Although the difference between the two brands’ monthly sales totals may be small, the implications are enormous. This is a watershed moment for Europe’s car market, particularly when you consider that Tesla has led the European BEV market for years, while BYD only officially began operations beyond Norway and the Netherlands in late 2022.”

The message seems clear. Tesla is no longer a car company. It is a robotics company, an AI company, a robotaxi company, and a purveyor of automated driving systems. Elon clearly had become bored with being the head of a car company and has moved on to other things. The proof is in the numbers, and those numbers say Tesla is going downhill when everyone else is scaling new heights. Based on the current data, things are not going to end well for Tesla.