China EV sales: Model 3 shines as market shows signs of recovery

Tesla saw its strongest month in sales in China yet in March, led once again by the Tesla Model 3 as the Asian economic leader shows early signs of a Covid-19 recovery, and as a reversal on EV subsidies is confirmed by the cnetral government.

China’s overall auto sales in March fell 40.8% from a year earlier to 1.045 million units according to figures released by the China Passenger Car Association (CPCA), but were three times higher than February.

The trend is even stronger in the “new energy vehicle” (NEV) market, which saw a quadrupling of sales from February that saw 56,000 electrified vehicles sold in March, 46,800 units of which were 100% electric drivetrain.

One in five of these were Tesla electric vehicles. Tesla saw its strongest month yet with 10,160 (locally made) units sold according to the South China Morning Post, quoting figures from the CPCA, and the majority were Tesla Model 3s.

This was despite confusion over whether a reversal on China’s electric vehicle subsidies would include non-domestic electric vehicle makers such as Tesla and Volkswagen AG.

China’s electric vehicle subsidies, which currently are worth up to 25,000 yuan (about $A5,600) for vehicles with at least 250km driving range, were cut back in mid-2019 as the country sustained its position as global EV market leader by volume.

On Wednesday, the Chinese state department confirmed an extension of subsidies as part of a plan to “roll out a set of fiscal and financial policies to expand domestic demand, assist businesses reopening, sustain employment, and help all types of businesses to weather this difficult time”.

Under the extension, the December 31, 2020 end date on subsidies will instead be extended by two years to December 21, 2022 “to better promote the sector’s development and boost car sales”. Whether the extension is limited to local auto makers is not clear.

The extension comes as Warren-Buffet electric vehicle maker BYD reported a 42% drop in sales in 2019 as a result of the July 2019 subsidy cut and emissions rules changes.

Despite this drop, EV Blogspot noted a new record in sales in March for BYD’s most popular EV, the BYD Qin Pro EV. On the March leaderboard the BYD vehicle was followed by the BAIC EU-Series which jumped 3 places from February, and the GAC Aion which dropped from number 2 to number 4.

While it is Tesla, BYD and Chinese auto giants like BAIC  and GAC that continue to lead the charge alongside BMW’s 530Le, EV Blogspot notes that EV startups like Nio and Hozon Auto are beginning to creep up the ladder.

Nio retained its place in the top ten at number nine with its ES6, while Hozon crept into number 19 with its Neta No1 crossover.

Nio has now also launched deliveries of its refreshed ES8 large SUV, which the company says it has revised “based on customer feedback” acorss 180 points including a larger battery with 100kWh capacity.

Tesla started deliveries from its Shanghai Gigafactory in the last days of December 2019 with a goal to produce 150,000 locally made Model 3s.

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