Why EV sales in China are going down
What's the story
China's electric vehicle (EV) market has witnessed a 3.9% drop in sales for July, marking the seventh consecutive month of decline. The fall is attributed to waning government incentives and weaker consumer demand. According to the China Passenger Car Association (CPCA), domestic sales of pure electric and plug-in hybrid vehicles also fell by 5.8% from June.
Industry impact
Small EV companies at risk, warns expert
Phate Zhang, the founder of Shanghai-based industry data provider CnEVPost, has warned that the bleak market outlook could affect most small EV companies.
He said some may even be forced to shut down their businesses.
Zhang also hinted at a possible price war, saying, "The grim reality is that all of the players may need to resort to price cuts to boost sales in the coming months."
Sales slump
Overall car deliveries in mainland China also down
The CPCA data also shows a massive 20.9% year-on-year decline in overall car deliveries in mainland China, including petrol-powered vehicles and EVs.
The total stood at 1.46 million units for July.
Notably, EVs made up 65.1% of the total car sales last month, highlighting their importance in China's auto market despite the ongoing challenges.
Delivery data
Significant drop in EV deliveries
From January to July, Chinese carmakers delivered a total of 5.67 million EVs to domestic customers, marking a 12.5% decline from the same period last year. The CPCA data highlights ongoing challenges faced by the country's auto industry amid changing market dynamics and consumer preferences.