BYD becomes first carmaker to stop manufacturing fossil-fueled cars

Chinese electric vehicle maker BYD suspended fuel car production in March, making it the first car company across the globe to adopt this strategic approach. This will have a positive impact on the development of the domestic new-energy vehicle (NEV) industry, and show a new way forward for international carmakers. In the future, BYD will only make pure electric and plug-in hybrid vehicles. The passenger car sales of BYD hit a record high at 104,338 in March, a year-on-year increase of 160.9%, setting a new record for monthly NEV sales in China. The company produced 106,658 NEVs during the month, up 422.97% from 2021. Among BYD's 104,338 units sold, pure electric vehicles accounted for 53,664 units, while sales of plug-in hybrid vehicles reached 50,674 units.

It is not surprising for BYD to adopt this strategy as the company has been reducing the production of internal-combustion cars, and its competitiveness in this sector was also relatively low, Independent Car Analyst Wu Shuocheng, told the Global Times. Wu added that BYD can fully focus the brand's strengths on NEV production. As to whether other domestic enterprises will take the same approach, Wu noted that it will vary depending on each company's sales and production investment in fuel cars.

Multiple countries, including China, have mapped out plans to gradually replace traditional fuel cars with NEVs. Sales of NEVs will account for about 20% of the country's new vehicle sales by 2025, according to a plan jointly issued by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) in March. Wu noted that it would not be hard for the nation to achieve the 20% goal, and the sales of NEVs in some cities in China have already surpassed the figure. BYD also said that it will continue to provide after-sales services for sold fuel vehicles, the Global Times reports.

Leading Chinese electric vehicle startups have seen strong car deliveries in March despite challenges such as the Covid-19 pandemic, showing the consumption momentum in new energy vehicles (NEVs) – including EVs – and local consumers’ enthusiasm for environmentally friendly vehicles. The rising car deliveries came as the Ministry of Industry and Information Technology (MIIT) said recently that more efforts will be made to encourage the use of NEVs and the nation will accelerate the development of domestic resources to cope with price increases in raw materials for batteries. Electric vehicle pioneer Li Auto said it delivered 11,034 of its Li One sport utility vehicles (SUVs) in March, up 125.2% year-on-year. For the first quarter, Li Auto said it had delivered 31,716 vehicles, an increase of 152.1% year-on-year. Li Auto is scheduled to release its next model, the L9 SUV, on April 16, as it aims to further stand out amid intensified competition in China’s EV market.

Another EV startup Xpeng said it delivered 15,414 vehicles in March, up 148% from February. For the first quarter, Xpeng delivered 34,561 cars, an increase of 159% year-on-year. Xpeng’s P7 flagship sedan also exceeded 9,000 deliveries, a monthly record, the company said. Nio delivered 9,985 vehicles in March, up 62.8% from February. The company delivered 25,768 vehicles in the first quarter, an increase of 28.5% year-on-year.

Xin Guobin, MIIT Vice Minister, said at a forum in late March that the Ministry will make more efforts to cope with costlier raw materials. It will accelerate the development of domestic resources, crack down on unfair competition and guide upstream and downstream enterprises in the industrial chain to strengthen cooperation and help ease prices of key raw materials. More measures will also be taken to improve the supply of key raw materials and parts, and guarantee the capacity of vehicle-charging services, Xin added. Experts have been cautiously optimistic about this year’s NEV sales. Fu Bingfeng, Executive Vice President of the China Association of Automobile Manufacturers (CAAM), said earlier that production and sales of NEVs are expected to maintain growth this year, the China Daily reports.

The number of NEVs registered in China increased by 138.2% in the first quarter. By the end of March, 8.9 million NEVs were registered in China, accounting for 2.9% of registered cars.