The electric vehicle (EV) market in China has reached a significant milestone, with half of all vehicles sold in July being either new pure electric vehicles (EV) or plug-in hybrids. This data, provided by the China Passenger Car Association, highlights the rapid adoption of new energy vehicles (NEVs) in the world’s largest auto market. NEV sales saw a 37% increase last month compared to the same period last year, accounting for a record 50.7% of car sales.
Just three years ago, NEVs only made up 7% of total vehicle sales in China. However, heavy investments in EV supply chains have propelled the growth of the domestic EV industry, leaving many established foreign brands struggling to catch up. In contrast, the United States only saw electric and hybrid vehicles account for 18% of sales in the first quarter of this year, according to the US Energy Information Administration.
The pace of growth for NEVs in China has been accelerating, with a 28.6% surge in June followed by a 37% jump in July. Sales of pure electric vehicles also saw significant growth, climbing 14.3% in July compared to 9.9% in June. This solid growth in NEV sales has helped local brands like BYD and Li Auto set new monthly sales records in July.
Despite the success of NEVs, overall domestic car sales in China fell by 3.1% in July, marking the fourth consecutive month of decline. Weak consumer confidence and economic struggles, exacerbated by a prolonged crisis in the property market, have contributed to this decline. In response, China’s state planning agency announced in late July that cash subsidies for vehicle purchases would be doubled to $2,785 per purchase, retroactive to April when the subsidies were first introduced.
China’s top EV firm, BYD, continued to offer discounts in July, albeit less intensively than in the first half of the year. The company offered price reductions of up to 17.3% on the hybrid SUV BAO 5 under its off-road Fangchengbao lineup at the end of July. Vehicle exports in July also saw a 20% year-on-year increase, although this growth was lower than the 28% increase seen in June.
In India, the electric vehicle penetration improved sharply in the two-wheeler and three-wheeler segment last month. Electric 2W volumes crossed the 100,000 mark, while E3W volumes reached a new peak of 63,000. The government extended the Electric Mobility Promotion Scheme (EMPS) subsidy until September 30, further incentivizing the adoption of electric vehicles in the country.
Overall, the growth of the electric vehicle market in China and India highlights the increasing global shift towards sustainable transportation. With advancements in technology, infrastructure, and government support, the future of electric vehicles looks promising as they continue to gain traction in the automotive industry.