As expected China’s January car sales were weaker than forecast thanks to a combination of the earlier timing of the Lunar New Year break and the ending of most purchase subsidies for new energy vehicles (NEVs).
Not even the re-opening after the lifting of the Covid zero policies of President Xi could spark a surge in sales in a holiday-dominated month.
But the performance of battery powered NEVs was a bit stronger than expected and February is expected to see a stronger performance overall with more selling days.
That’s the positive from the data for renewable materials companies such as Australian lithium copper and nickel companies (and their investors).
Retail sales of all passenger vehicles in China were 1.293 million units in January, down 37.9% year-on-year and down 40.4% from December’s 2.17 million units which were boosted by the ending of purchase subsidies for NEVs and ICE (internal combustion engine) vehicles.
China’s retail sales of new energy passenger vehicles in January totalled 332,000 units, down 6.3% from January, 2022 and down 48.3% from December’s 640,000 units in December, according to data from the China Passenger Car Association (CPCA).
That was also down on the 360,000 estimate issued at the end of January and before final registration and sales figures were issued by car companies.
But there’s an easy explanation for the sales slide (besides the ending of subsidies) – there were 20 selling days in January instead of the usual 30, as businesses and manufacturers wound down for the early Lunar New Year holiday.
China’s longest holiday period more often than not falls in February, and car sales typically surge in the weeks before but plunge when hundreds of millions of people and take a break for festivities and businesses close.
The car companies, though, expect better things this month which has 20 working days, four more than a year ago (When Lunar New Year started February 1).
Battery electric vehicles (BEVs) continued to dominate, with 214,000 units solid in January, down 22.2% year-on-year and down 53.2% from December, accounting for 64.5% of all NEV retail sales.
Plug-in hybrid (PHEV) retail sales in January totalled 118,000 units, up 48.8% year-on-year, but down 36.1% from December and accounting for 35.5% of all NEV retail sales.
Meanwhile Tesla’s Shanghai factory delivered 66,051 electric vehicles in January, of which 39,208 were exported.
This was up 18% from December and 10% from January 2022 and a response to price cuts in late December and early this year.
BYD kept its market leadership in NEVs by boosting deliveries 59% to 151,341 last month – 150,164 electrified passenger vehicles, up 62% from a year earlier. and commercial vehicles which rose nearly 400% to 1,177.
Battery powered cars rose 54% to 71,338 while deliveries of plug-in hybrids spiked 69% to 78,826.
