Chinese car market continues to pick up speed – but electric vehicle sales drop

Sales in the world’s largest market are recovering and were above the previous year’s level in May. However, there is a clear minus for the year as a whole.

Polestar 1 production plant

China’s car market is recovering more and more after the corona crisis. In May, sales on the world’s largest car market climbed 14.5 percent year-on-year to just under 2.2 million vehicles, according to data from the CAAM manufacturing association on Thursday. The government’s support measures and increased consumer confidence have ensured that more cars are bought again, said a representative of the association.

Car sales were up 4.4 percent in April after plummeting 43 percent in March. In February the decline was particularly high, at minus 80 percent, because public life practically came to a standstill at the time because of measures to combat the pandemic.

Despite the recovery, manufacturers are unlikely to be able to fully make up for the slump in sales from the first few months to the end of the year. The association is now anticipating a 15 percent drop in sales for the full year. In April the forecast was still minus 15 to 25 percent.

While total passenger car sales increased in the past two months, fewer vehicles with climate-friendly drive technology were sold. Sales of new energy vehicles (NEV), including battery-powered cars, plug-in hybrids, and hydrogen-powered vehicles in China, fell to 82,000 units. Sales of electric vehicles have been weakening for some time. The main reason is the elimination of government subsidies when purchasing NEV vehicles.

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