Strong Performance of New Energy Vehicles

In the past six months, new energy vehicles (NEVs) have remained a highlight in the automotive market. According to CAAM, the production and sales of NEVs continued to grow rapidly in the first half of the year, with market share steadily increasing to 35.2%.

Major car manufacturers have been making significant strides in the NEV sector. As of early July, several companies have announced their sales data for the first half of the year. BYD has maintained its lead in the NEV market, with cumulative sales reaching 1.613 million units, a year-on-year increase of 28.46%. Chery Group surpassed the one million sales mark for the first half of the year, with NEV sales hitting 180,900 units, up by 181.5% year-on-year. Geely’s NEV sales grew by 117% to 320,200 units, thanks to the strong performance of its sub-brands such as Zeekr and Lynk & Co. Additionally, Seres reported cumulative NEV sales of over 200,000 units, marking a significant year-on-year increase of 348.55%.

In the realm of new energy vehicle startups, Huawei HarmonyOS and LI Auto delivered 194,000 and 189,000 units respectively in the first half of the year, firmly establishing themselves as leaders among the new energy vehicle startups.
The data indicates that NEVs have become a crucial growth driver for various car manufacturers, with companies like BYD and emerging NEV players fully transitioning to the new energy sector. According to the China Passenger Car Association (CPCA), the market penetration rate of NEVs exceeded 50% in certain months of the first half of the year.

“With the increase in high-quality supply and a richer product matrix, the NEV sector is stimulating consumer demand,” noted SPDB International Holdings Limited, highlighting the ongoing upward trend in NEV penetration rates.

Since the beginning of the year, the automotive market has faced intense competition, reflected in comprehensive upgrades across products, technology, services, and marketing by major car manufacturers. Amid this fierce domestic competition, overseas markets have become a breakthrough point. Companies like BYD and Geely are accelerating their global expansion through overseas factories, joint ventures, and technology collaborations.

Exports Driving Overall Market Growth

Exports have been another bright spot in the auto market for the first half of the year. Following last year’s milestone of surpassing Japan to become the world’s largest auto exporter, China’s automotive exports continued to grow rapidly in the first half of this year. According to CAAM, from January to June, China exported 2.793 million vehicles, a year-on-year increase of 30.5%. Chen Shihua, Deputy Secretary-General of CAAM, emphasized the significant contribution of exports to the overall market growth.

However, facing policy challenges in European and American markets, Chinese electric vehicles are encountering more trade barriers. Industry experts suggest that local production overseas might be the way forward. Cui Dongshu, Secretary-General of the CPCA, mentioned that establishing production bases in regional centers could help mitigate international conflicts during exports and balance international resources and interests.

Chinese car manufacturers are also exploring emerging markets in Southeast Asia, the Middle East, and South America. CPCA data indicates that Russia, Brazil, and Mexico were the top three countries for Chinese auto exports from January to May this year, with Russia being a core market maintaining export growth.

Looking ahead to the second half of the year, Chen Shihua of CAAM believes that favorable policies such as trade-in incentives and NEV promotions in rural areas, combined with the launch of new products, will help further unleash the potential of the automotive market and support stable growth for the industry throughout the year.

Source: China News