© Reuters. A view shows traffic during evening rush hour at the central business district (CBD) in Beijing, China, January 15, 2021. Picture taken January 15, 2021. REUTERS/Tingshu Wang/File photo
BEIJING (Reuters) – China’s electric vehicle sales slowed in the opening months of this year, industry data showed on Friday, with competition intensifying as market leader BYD (SZ:) headed a deeper round of price cuts.
Sales of battery-powered EVs rose 18.2% in January-February versus 20.8% for all of 2023, showed data from the China Passenger Car Association.
Together with plug-in hybrids, new energy vehicle (NEV) sales jumped 37.5% in the two-month period, versus 36.2% for 2023. The result outpaced the overall passenger vehicle market’s 16.3% growth as widespread discounts fuelled demand.
NEVs accounted for 33.5% of total car sales in January-February versus 28.3% in the same period a year earlier, grabbing market share from petrol-powered cars of which sales rose 7.8%.
Some EVs are priced on a par with petrol-powered cars, pressuring sales of the latter, said Cui Dongshu, secretary general of the association, told reporters on Friday.
BYD this year has lowered prices more than rivals and across a wider number of models. It has cut prices of the 13 models that made up 93% of its total 2023 China sales by 17% on average, Reuters calculations showed.
Cuts include nearly 12% for its best-selling Yuan Plus crossover – or the Atto 3 overseas – and 5% for its lowest-priced EV Seagull.
A dozen automakers have joined the price war, including Geely Auto, GAC Aion, Leapmotor (HK:) and Xpeng (NYSE:), with discounts mostly ranging from 9% to 17%.
The price cuts came as BYD’s NEV market share fell to 30.7% in February, its lowest since June 2022, Reuters calculations showed.
BYD is the world’s biggest EV seller having unseated U.S. rival Tesla (NASDAQ:), even if most of its sales are in China.
It exported 19% of its cars overseas in February, its highest ratio ever. It sold 8% of all outbound cars in 2023.
Association data showed China’s February car exports rose 18% to 298,000 passenger cars, with NEVs accounting for 26.4% of the total.
Exports have become a growth engine for carmakers struggling with weakening domestic demand. They have been selling new EV models in droves to markets such as Australia where they do not face trade barriers and where sales have surged due to subsidies and tax benefits as well as high fuel prices.
However, in some markets, China’s rising auto export prowess has caused friction. European authorities have launched an investigation into whether Chinese EV makers unfairly benefit from state subsidies, while the U.S. has begun a probe into whether Chinese-made vehicles could be used to spy on Americans.
