July is usually a low point for car sales in China, but this year, many Chinese new-energy vehicle (NEV) makers defied expectations with record-high deliveries, especially by emerging players. Demand is likely to grow further during the coming months with favorable government policies, experts said. Chinese NEV makers' sales to dealers totaled 750,000 in July, up 34% year-on-year, the China Passenger Car Association (CPCA) said. BYD sold 261,105 NEVs in the month, ranking first, followed by Tesla's 64,285, GAC Group's new-energy brand Aion's 45,025 and Geely's 41,014.
Besides established companies, emerging players continued to show strong momentum, with Li Auto leading the pack by delivering a record-high 34,134 vehicles to consumers in July, up 227.5% on a yearly basis. NIO ranked second, delivering 20,462 vehicles in the month, up 103.6%. NIO's monthly deliveries exceeded 20,000 for the first time, according to data released by the company. XPENG Motors delivered 11,000 cars, continuing its growth for a sixth consecutive month.
Consumers remained enthusiastic about buying NEVs in July, driven by government policies aiming to bolster automobile consumption, as well as carmakers' and dealers' promotional activities, the CPCA said. “July has been traditionally an off-season for car sales, but with local stimulus policies remaining strong and producers continuing promotional activities, consumers' wait-and-see mood weakened,” Cui Dongshu, Secretary General of the CPCA, told the Global Times.
The boom in July was even better than expected, reflecting the strong resilience of consumption and the effectiveness of producers' marketing campaigns, Cui said. The central and local governments are making every effort to promote consumption, with many support policies already taking effect. The potential of the automobile sector is large, and the market's growth momentum is likely to persist in the second half of the year, Cui said.
Efforts should be made to build high-quality charging infrastructure, promote the use of NEVs in rural areas, and maintain and improve tax breaks for NEV purchases, the National Development and Reform Commission (NDRC) said. The number of rural motor vehicles and drivers has grown rapidly, exceeding millions of units annually. The proportion of drivers in rural areas has reached more than 50% of the national total, said Wang Qiang, Vice Director of the Traffic Management Bureau under the MPS. This year's NEV sales are expected to total 8.5 million, about 1.6 million units more than last year, the CPCA said.
The number of charging piles for electric vehicles expanded at a rapid pace in China during the first half of the year on booming demand for EVs, industry data showed. More than 1.44 million charging piles were added from January to June, up 40.6% from the same period in 2022, the China Electric Vehicle Charging Infrastructure Promotion Alliance said, taking the vehicle-pile ratio to 2.6:1. The number of NEV sales in the country surged 44.1% year-on-year in the first half to nearly 3.75 million units. NEV output reached nearly 3.79 million units, rising 42.4% year-on-year, data from the China Association of Automobile Manufacturers (CAAM) showed. China’s NEV sales had gone up from 1.37 million in 2020 to 6.89 million in 2022, it said. As EV demand has undergone sustained expansion in recent years, production and sales of charging piles are expected to climb further, ushering in greater opportunities for market players, said Lin Boqiang, Dean of the China Institute for Studies in Energy Policy at Xiamen University.
Increased sales of NEVs will boost demand for charging stations and the industry may enter an era of high growth, he said. Charging stations have become an indispensable component for bolstering the competitiveness of NEV companies both at home and abroad, and many EV makers worldwide are already stepping up construction of charging piles. Tesla has built more than 1,600 supercharging stations and over 10,000 supercharging piles in China, covering all provinces, Lin said. EV startups, including NIO, Li Auto and Xpeng are actively deploying charging stations to improve mileage efficiency and user experience.
Traditional oil giants, such as China National Petroleum Corp (CNPC), China Petrochemical Corp (CPC) and China National Offshore Oil Corp (CNOOC), have also entered the sector to compete for a share of this lucrative market, which will, in turn, lead to increased competition, he said. The construction of charging infrastructure is still lagging behind sharp demand from the EV sector in China, said Essence Securities in a research note, adding that the current vehicle-pile ratio holds great potential for expansion. The government should step up construction of charging stations as support infrastructure for NEVs to alleviate range anxiety among consumers, it said.
The government has steadfastly aided the development of the NEV industry in recent years, aiming to build a high-quality charging infrastructure by 2030 to achieve the country’s goal of reaching carbon neutrality by 2060. China has established the world’s largest charging infrastructure system in terms of quantity and coverage area, providing strong support for the rapid development of NEVs, said the NDRC.
The Chinese government released a document last month that detailed five major targets in building a high-quality charging infrastructure system by 2030, with extensive coverage, moderate scale, reasonable structure and perfect functions. Convenient and efficient intercity charging networks and interconnected charging networks in urban agglomerations will be built, especially charging infrastructure on road networks between key cities. Efforts will also go toward enhancing the layout and construction of public charging infrastructure in rural areas, the China Daily reports.
