Car sales in China drop, but new-energy vehicles are on the rise

RETAIL sales of passenger cars in China slipped in November as lockdowns due to the country’s still-strict approach to Covid kept buyers away from showrooms.

Data from China’s Passenger Car Association (PCA), released on Thursday (Dec 8), showed that last month’s sales totalled 1.67 million units. This was a 9.5 per cent decrease from the same period a year ago, and a 10.5 per cent drop from October’s sales.

However, sales figures for new-energy vehicles, which include pure-battery electric cars and hybrids, were on the rise. They jumped 58.2 per cent year on year to 598,000 units, led by deliveries from local giant BYD and US pioneer Tesla.

BYD, backed by Warren Buffett, shipped 230,427 units in November; Tesla delivered a record 100,291 electric vehicles. PCA said that 62,493 of the locally-built Tesla Model 3 sedans and Model Y sport utility vehicles were sold to the domestic market, leaving 37,798 available for export.

China’s automotive industry, like most others, has been hampered by the country’s zero-Covid approach, which officials only recently started stepping away from. For much of the past three years, authorities have been locking down swathes of the country, forcing people into quarantine camps, and subjecting large portions of the population to mass testing.

These measures disrupted economic growth and dented consumer confidence. Companies such as Volkswagen and Honda have been forced to suspend production as employees were stuck at home, and components could not reach factories. Nearly every firm has been hit by supply-chain snarls.

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Guangzhou-based Xpeng, for example, delivered only 5,811 vehicles in November and 5,101 units in October. Another Chinese electric vehicle maker, Li Auto, said that two of its models had been delayed due to a lack of “essential components”.

Cui Dongshu, secretary-general of the PCA, said that Covid outbreaks and lockdowns in Guangdong, Chongqing, Henan and other “major automotive-consumption regions” have hit both the supply and consumer ends. These conditions have led to an “abnormal” consecutive month-on-month decline.

However, car sales are expected to pick up in December, ahead of state subsidies for cleaner vehicles and tax cuts for low-emission petrol cars falling away. The PCA forecast that new-energy vehicle wholesales in 2022 will touch 6.5 million. A total of 5.74 million new-energy vehicles were delivered during the first 11 months of the year. BLOOMBERG