Is the Wait Over... Chinese Electric Vehicle Companies Break Monthly Sales Records

Consumers Hesitant Despite 40% Discount Step Up to Buy
BYD Sells Over 260,000 Units, Showing Strong Performance

Last month, monthly sales of Chinese electric vehicle (EV) companies consecutively broke their highest records. It is evaluated that the cautious stance of consumers, which had been caused by the industry's discount competition, has ended, and they have started full-scale purchasing.

According to the South China Morning Post (SCMP) in Hong Kong on the 2nd, suppressed demand from Chinese consumers exploded, leading to record-high sales last month for Chinese EV companies such as BYD, Li Auto, and NIO.

[Image source=Reuters Yonhap News]

BYD, the world's largest electric vehicle manufacturer, sold 262,161 vehicles last month, which is a 3.6% increase compared to the previous month. Li Auto also delivered 34,134 units, and NIO delivered 20,462 units, each surpassing their previous highest records. In Li Auto's case, this is more than a threefold increase compared to July last year (10,422 units).

Xpeng delivered 11,008 units, a 27.7% increase compared to the previous month (8,620 units). However, this is a decrease compared to last year (11,524 units). The company drew significant attention last month on the 25th when it formed a partnership with Germany's Volkswagen and agreed to receive a large-scale investment from Volkswagen.

In contrast, Tesla's sales in China seem to be declining. Although Tesla does not separately announce monthly sales figures, according to the China Passenger Car Association, Tesla delivered 74,212 Model 3 and Model Y vehicles to Chinese buyers last month, which is a 4.8% decrease compared to the previous year. The recent news that the U.S. National Highway Traffic Safety Administration (NHTSA) has started an investigation into the loss of power steering control in the 2023 Model 3 and Model Y models has further dampened enthusiasm.

Eric Han, senior manager at Shanghai consulting firm Shuolei, explained, "Chinese drivers who had been cautious in the first half of this year have made purchasing decisions," adding, "Automakers such as NIO and Xpeng are increasing production."

Prior to this, the Chinese automotive industry had entered a price competition to revive sluggish consumption. Especially from January to April, companies repeatedly lowered sales prices by up to 40%, resulting in a chicken game scenario, but sales volume did not significantly improve. The total sales of pure electric and hybrid vehicles across mainland China in the first half of this year recorded 3.08 million units, a 37.3% increase compared to the previous year. This is less than half of last year's growth rate (96%). SCMP explained, "Consumers hesitated to purchase while expecting deeper discounts," and "steep discounts did not lead to increased sales."

The Chinese government has actively promoted consumption as the GDP growth rate in the second quarter was only 6.3%. In particular, it has announced support measures such as extending the purchase tax exemption to encourage the purchase of automobiles, which are representative high-priced durable goods. Originally, the government planned to end the purchase tax exemption by the end of this year.

This content was produced with the assistance of AI translation services.