BYD says plug-in electrics will exceed 50 pct of new car sales in China in next 3 months

The CEO of BYD, the Chinese giant challenging Tesla as the world’s biggest electric vehicle maker, says sales of New Energy Vehicles (NEVs), including battery electric vehicles (BEVs) and plug-in hybrids (PHEVs), will make up more than half of all new cars sold in China within the next three months.

“The penetration rate of NEVs crossed 48.2 per cent last week, and if it continues at this rate, I estimate that the penetration could cross 50 percent in the next three months,” Wang Chuanfu said in a recent speech at the China EV 100 Forum in Beijing.

According to CnEVPost, Wang forecast that China would cross the 50% threshold sometime this year but has now now brought forward his prediction saying it will likely happen during the next 90 days.

Around 9.5 million NEVs were sold in China in 2023 making up 31% of the world’s largest car market. Of these 6.7 million were fully electric BEVs and 2.8 million were PHEVs meaning BEVs make up around 70% of all NEVs.

While total 2023 results for NEVs were impressive, a look at the month of December shows just how fast things are changing.

In December 1.13 million NEVs were sold in China making up 40% of the the total 2.79 million passenger cars sold. According to Wang, the market share of NEVs increased even further to 48% last week. Based on the ratio of BEVs to PHEVs this suggests that fully electric vehicles now make up around 34% of all new cars sold in China.

China’s growing EV market share in stark contrast with Toyota chair’s recent comments

Despite the staggering growth of electric vehicles in the world’s largest car market, earlier this year, Toyota chairman and grandson of the company’s founder, Akio Toyoda, said he still believes internal combustion engine vehicles will make up the majority of sales in the future.

“No matter how much progress BEVs make, I think they will still only have a 30% market share.” said Toyoda at the time.

In May last year, The Driven interviewed technology futurist Tony Seba who predicted that NEV penetration in China would reach 40-50% by the end of 2023, a prediction that proved to be right.

50% of ICE vehicle factories currently dormant in China

The situation in China is getting bleak quite fast for ICE vehicle makers. A recent report from the Financial Times says “zombie” ICE vehicle factories are on the rise in China and that the asset value of ICE vehicle factories has plummeted as legacy carmakers scale back production because of the growing popularity of electric vehicles.

This gigantic stranded asset problem facing fossil carmakers has been anticipated for many years by keen observers of the industry however now it seems “its happening”.

The Financial Times says in 2017, Hyundai invested $US1.15 billion in a new factory in Chongquing in south-western China the capacity of 300,000 ICE vehicles per year but just 6 years on and the company has been forced to sell the new factory in December “for less than a quarter of the investment value.”

China’s 2023 ICE vehicle production is down a staggering 37% from its peak of 17.7 million in 2017. According to Shanghai consultancy Automobility, only half of the country’s installed capacity of ICE manufacturing plants was currently being used.

With NEV sales now predicted to cross the 50% mark in the next 3 months, the ICE vehicle death spiral appears to be speeding up rapidly.