Shanghai (ZXZC)- China's NEV outputs and sales reached 100,000 units and 98,000 units in July, jumping 15.6% and 19.3% year on year after 12 consecutive months of downturn, according to the China Association of Automobile Manufacturers (CAAM).

“This is this year's first-time year-on-year growth in NEV sales,” said Xu Haidong, a deputy secretary-general of the CAAM, when the association released the latest sales figures last week. He added that the country's NEV sales are forecasted to reach 1.1 million units in 2020.

The significant sales recovery and the CAAM's optimistic prediction towards the annual NEV sales may be grounded on the stimulus effect brought about by both abundant governmental incentives and OEMs' endeavors.

(BYD Han EV, photo source: BYD)

The domestic auto market is witnessing faster recovery as the consumption demands are being unleashed thanks to the positive change in the pandemic prevention and control. The CAAM data show that there were 2.201 million and 2.112 million new vehicles output and sold in China last month, a year-on-year jump of 21.9% and 16.4%. To be specific, PV outputs and sales grew 13.2% and 8.5% from a year ago to 1.729 million and 1.665 million units, while the CV business continued its robust upward momentum with the outputs and sales surging 70.3% and 59.4% respectively.

Among the NEVs sold last month, roughly 89,000 units were PVs, an increase of 28.7% from the previous year. The vigorous rise primarily stemmed from the 38.1% growth achieved by the all-electric PV unit, whose sales amounted to 70,000 units.

For the first seven months, China's NEV sales fell 32.8% over the year-ago period to 486,000 units. The CAAM said the decrease in year-to-date sales further contracted over the first half of 2020 due to the growth gained in July.

(Nezha N01, photo source: HOZON Auto)

In fact, policies and company's strategic adjustment carried anywhere near the NEV sales rebound.

Xu Haidong said the drawn-out slide in NEV sales coming with the subsidies phase-out since mid-2019 prompted automakers to adjust strategies accordingly and attach more importance to rural market while deploying upscale market.

To spur the car consumption demands in rural areas, Chinese authorities issued in mid-July a notification saying there will be many activities held in the second half of 2020 for bringing automobiles to the countryside.

The serial activities began in Qingdao, Shandong province in late July, where over 40 NEV models offered by more than 20 automakers were exhibited for sale, the majority of which were mini-sized and small-sized all-electric models.

The CAAM considered that the program for bringing automobiles to rural regions will play an important role in sustaining the growth of small-sized BEV sales.

Aside from automakers' strategy change, the governmental incentives also helped boost NEV sales. It is roughly estimated that there were at least 7 cities in China launching policies to subsidize NEV purchase or battery charging in the first half of the year, including Guangzhou, Tianjin and Shanghai. Besides, Beijing planned to increase 20,000 NEV (new energy vehicle) license plates at one go in the second half of 2020, which will be all allocated to car-free families, according to the draft regulations released by Beijing Municipal Commission of Transport in June. 

Apart from the combined efforts made by the government and companies, the small prior-year base volume led by the NEV subsidy phase-out was also one of factors contributing to the growth. According to the CAAM's data, China's NEV outputs and sales reached only 84,000 units and 80,000 units, shrinking 6.9% and 4.7% year on year respectively.

(NIO ES6, photo source: NIO)

The sales data of such NEV startups as Tesla, WM Motor, HOZON Auto and Li Auto have been consolidated into the overall NEV sales from April, which is another contributing factor to the positive rise.

Tesla sold in July 11,041 Model 3s locally produced at Gigafactory Shanghai, which were still honored the best-selling BEV model in China, according to the China Passenger Car Association (CPCA). The CAAM noted that Tesla sales for 2020 are estimated at about 100,000 vehicles.