Official figures released on Friday show that in China in 2018, sales of “new energy vehicles” (NEV) soared by 80 per cent against an otherwise flagging automotive market.
In the first half of 2018, NEV sales doubled from the year before with a 106% increase, and saw a 68% increase in the second half of 2018, according to data from research house EV-Volumes .
Overall sales of electric vehicles reached 1.1 million passenger vehicles as well 60,000 commercial light vehicles and 120,000 medium-heavy commercial vehicles.
The brought China’s NEV market share to 4.2% of a national fleet numbering around 240 million, and confirming again its position as the world’s largest electric vehicle market.
To put that in perspective, the next largest EV markets are Europe, where 410,000 EVs were sold in 2018, and the US, where 360,000 were sold.
In January 2019, the surge in NEV sales continued in China, with a 300% increase from the previous year, which unfortunately was not echoed in the following month of February.
Placed against non-NEVs, the increase of NEV sales compared to falling non-NEV sales, which saw a drop in the order of half a million for the months of November 2018 to January 2019, is stark:
Electric car sales database EV-Volumes says it waited longer than usual before releasing the data for 2018 to ascertain movements in the Chinese auto market which has been subjected to a trade war with the US, and has more recently removed subsidies for NEVs at the lower end of the range spectrum.
These factors may mean that for 2019, the NEV market in China may not be as bullish as previous years, with the Chinese government raising subsidies for new electric vehicle purchases this year from only vehicles with a range above 150km to 250km and halving subsidies for longer range NEVs.
While buyers in the first quarter were able to access last year’s subsidies, smaller A and B segment vehicles (that represent 30% of the market) will be looking less attractive to buyers, which could result in a drop in NEV sales for 2019 unless Chinese buyers decide to dig deeper into their pockets.
The change in subsidies will likely also consolidate the market as automakers either pause manufacture of smaller NEVs to upgrade batteries, or stop making them altogether, as happened in 2018 when the 150km range limit was introduced.
Still, NEV volume in China is predicted to reach 1.8 million units by the end of 2019, 3% lower than the previous year but increasing the overall NEV market share by 55% to 6.7%.