Analysis on the overall trend of China new energy vehicles market

Automotive Research Institute has released a report on the overall trends of China new energy market in July, 2017. The report analyzed the impacts of subsidy and policies toward the market, and presented the situations of the market based on the sales in the first half of the year.

1.NEV subsidies have undergone annual cut and technology development is promoted

With the development of new energy market, subsidies to NEVs are decreasing gradually. According to the subsidy standards, subsidies from central government reduced 20% compared with last year, while local subsidies should not exceed 50% of the central government subsidies.

In order to promote key technology’s upgrading and NEV market’s development, subsidies also favor those models whose battery’s energy density can meet the requirements.  For example, buyer of those vehicles whose density is higher than 120Wh/kg can receive 1.1 times subsidies.

2.Implementation of Dual-points System

To establish a long-term mechanism for NEVs' development and promotion, MIIT published the Credit System of CAFC and NEV (exposure draft) in June and the final version will be issued in the near future.

3.NEV market has reached a certain scale while passenger vehicles still dominate the market.

NEV market expands rapidly, with compound annual growth rate reaching to 137% from 2011 to 2016. NEV sales reached 607 thousand in 2016, passenger cars accounting for 68%.

4.NEV market fluctuates with the changes in the policy

At the beginning of 2017, subsidies to NEVs were cut, which resulted in January sales decline. With the release of NEV Promotion Directory and growth of consumer needs, sales of NEV are picking up gradually. NEV sales reached 158 thousand in the first half of 2017, increasing 31.4% compare with the same period of last year. NEV  market was still dominated by BEV.

5.BEVs dominate new energy vehicle market and the shares of SUV is expanding

BEVs occupied most shares in NEV market, and shares are increasing year by year.

With the development of the NEV market and consumers' preference for SUV, shares of pure electric SUVs are increasing. SUV dominates main market shares in PHEV models.

6.A00 class dominates BEVs while A and the above class dominates PHEVs.

Thanks to the cost advantage and new business model's promotion, A00-class vehicles dominate substantial market shares among BEVs. With the changes of consumers' needs, the shares of A-class vehicles raised gradually.

A-class and B-class vehicles dominate great parts in PHEV market, where no compact vehicles have been introduced

7.Zhidou D2, Roewe eRx5 respectively get the crown in BEV and PHEV segments.

Zhidou D2, with 18,693 sales in the first half of 2017, became the best-seller in BEV market, while BAIC EC series and BYD e5 ranked second, third. Year-to-date sales of other models are all below 10 thousand.

Among PHEV models, Roewe eRx5 was the most popular one. Top 5 PHEV models are either from SAIC passenger vehicles brands or  BYD.

8.NEV sales are mainly from purchasing-restricted cities

NEV sales are mainly from the cities that restrict license plates and purchasing for a second car. Sales in those cities take up 62.5% of the whole NEV market.

Every city’s NEV policy determines the NEV models introduced in that city. Beijing NEV market is dominated by BEVs while Shanghai is by PHEVs. Guangzhou issues license plates for those whose first vehicle is a NEV, which in some degree have impacts on sales of NEVs.