China's electric vehicle (EV) market is charging ahead, with sales of EVs and plug-in hybrids likely surpassing 50 per cent of total vehicle sales for the first time in July, according to preliminary data from the China Passenger Car Association (CPCA). This landmark achievement comes despite a two per cent decline in overall new vehicle sales to 1.73 million units during the month. EVs and plug-in hybrids, collectively termed new energy vehicles (NEVs) in China, accounted for a staggering 879,000 units sold in July, representing 50.8 per cent of the market. This surge underscores the rapid adoption of electric mobility in the world's largest auto market. The milestone indicates that the EV industry in China is thriving despite a global slowdown in demand. Wang Chuanfu, CEO of BYD Co., the world's largest EV and hybrid manufacturer, had forecasted China reaching this milestone back in March when EV and hybrid deliveries accounted for over 50 per cent of all sales on a weekly basis. He also mentioned that the industry is now in the elimination phase of the competition. July's overall car sales declined primarily due to a decrease in the second half of the month when some automakers paused production for their annual summer break. Sales also dropped as manufacturers reduced discounts following a decrease in industry price competition, as reported by the association on its WeChat account. This decline reflects a broader trend of weak auto spending in China, with car-related expenditures in the first half of 2024 down approximately 1.1 per cent compared to the previous year. To stimulate consumption, the state economic planner and finance ministry recently announced additional funding measures, including doubling subsidies for trading old cars for new ones to 20,000 yuan ($2,800). As competition in the EV space intensifies, pricing strategies are evolving. Some luxury brands like BMW have increased prices, while BYD continues to offer aggressive discounts. Attribution: Bloomberg
