China’s auto sales experienced a slight decline in July, with a 5% drop compared to the previous year, according to the China Association of Automobile Manufacturers. However, the export of electric vehicles (EVs) surged by approximately 20%, as Chinese automakers expanded into global markets. Of the total vehicles sold, more than half were “new energy vehicles,” comprising electric and plug-in hybrid cars.
The decline in domestic sales can be attributed to factors such as sluggish demand in the Chinese market and increased tariffs imposed by the United States and the European Union. These tariffs were levied in response to government subsidies provided to Chinese automakers, which were viewed as providing an unfair advantage. In response, China’s Commerce Ministry submitted the provisional tariffs to the World Trade Organization for dispute settlement, criticizing the EU’s ruling for lacking factual and legal basis.
To stimulate demand and address concerns about climate change, China has implemented incentives to encourage consumers to trade in their older gasoline and diesel-fueled cars for EVs. This strategy aims to boost cleaner transportation and counter the impact of slowing economic growth. Although overall car sales have been lackluster, EV sales experienced a significant increase of nearly 30% in July compared to the previous year, reaching approximately 991,000 units. The majority of these sales were in China, with 887,000 units sold domestically and 103,000 units exported.
In contrast, sales of foreign automakers in China have stalled or even decreased amidst intense price competition within an oversaturated market. Meanwhile, Chinese automakers have seen their market share grow rapidly and now account for two-thirds of all vehicle sales in July. Chinese automakers have experienced a 10% increase in vehicle sales, with the majority of vehicles sold falling within the price range of 100,000 to 150,000 yuan ($14,000 to $20,500). In terms of EVs, the largest share of sales was in the price range of 150,000 to 200,000 yuan ($20,500 to $28,000).
While traditional automakers like Chery Automobile, SAIC Motor, and Geely Auto Group still export more vehicles, primarily conventional fuel engine models, EV manufacturers like BYD and Tesla are quickly gaining ground. In July, BYD exported 31,000 EVs and hybrids, while Tesla exported 28,000 units. Overall, BYD has exported 2.38 million EVs in the first seven months of the year, surpassing Tesla’s exports of 1.76 million units.
In terms of export destinations, Russia emerged as the largest market for Chinese-made vehicles, with 478,000 units imported in the first half of the year. Most of these vehicles were conventional internal combustion engine models. Additionally, Mexico imported 226,000 units, followed by Brazil with 171,000 units.
These statistics from the China Association of Automobile Manufacturers demonstrate the shifting dynamics of the global automotive industry. While Chinese automakers are facing challenges in their domestic market and international trade disputes, they are successfully expanding their presence in the EV market and seizing opportunities in the global arena. With the Chinese government’s continued support and efforts to promote clean transportation, the growth of the EV industry is expected to continue in the coming years.
