This article first appeared on the BNEF mobile app and the Bloomberg Terminal.
- China passenger EV sales were up 30% year-on-year in July
- Covid-19 slashed China EV sales by nearly 40% in 1H 2020
Sales of passenger electric vehicles (EV) in China grew by nearly 30% in July from a low base last year, ending a year long decline. EV sales fell sharply when China cut EV subsidies by 50% in July 2019 and had been sliding since then.
The recovery is largely driven by pent-up demand in major cities and stimulus measures introduced by the government, including an extension of national subsidies until 2022. But EVs that cannot meet new requirements will not qualify for subsidies after July 22. This likely helped the rebound as consumers rushed to buy certain models in July to take advantage of incentives.
Demand for premium EVs, such as Tesla’s Model 3, NIO’s ES6 and BMW’s 5 Series, combined with policies aimed to spur local EV sales, will drive growth further in 2H 2020. Still, Covid-19 and the associated economic impacts may slow down the pace of recovery, especially as demand for taxis and ride-hailing services is unlikely to rebound soon. BNEF expects total China passenger EV sales will drop 14% to 932,000 units this year.
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