Rising popularity, favorable policies make electric and hybrid cars the rage

Sales of new energy vehicles or NEVs in China are expected to reach 6 million units this year, as the sector's growth gathers momentum on rising popularity among consumers, said the country's major industry association on Tuesday.

Carmakers sold 564,000 electric and plug-in hybrid passenger vehicles in July, up 123.7 percent from the same month last year, according to the China Passenger Car Association.

That swelled NEV sales in the first seven months to 3.03 million units, up 123 percent year-on-year.

"They have exceeded our expectations. So, we are revising up our estimates to 6 million (units) from 5.5 million (units) for this year," said Cui Dongshu, secretary of the association.

Cui estimated that their monthly sales are expected to average over 600,000 units from August to December. Combined with electric trucks and buses, sales of all types of NEVs in China could reach 6.5 million units, he said.

He said Chinese consumers' acceptance of NEVs is growing continuously. The association's data showed that NEVs accounted for 26.4 percent of total passenger vehicle sales in July. In the same month last year, the corresponding figure was 16.6 percent.

The availability of new models, favorable policies including extra license plates and subsidies this year, as well as local governments' introduction of environmentally friendly fleets, are fueling their sales, said Cui.

Local authorities in Shandong province have said that NEVs will account for 100 percent of new vehicles they purchase by 2025.

A breakdown of July sales showed 16 carmakers sold over 10,000 personal NEVs each. Most of them are local Chinese marques and five of them are startups, including Xpeng.

BYD topped the list by delivering 162,200 units, followed by Wuling at 59,300 and Geely, 32,000 units.

Tesla, which frequently figured among the top three players, slipped to fourth position at 28,217 units.

This was primarily because it suspended production for days in the month to upgrade the production line at its Shanghai plant. Now the facility can produce 750,000 vehicles a year, the most among Tesla's plants worldwide.

Last month, Tesla exported 19,756 Shanghai-made vehicles. In the first seven months, its exports from China exceeded 110,000 units to markets including Europe, Japan, Australia and Singapore.

SAIC ranked No 2 last month, exporting 13,413 units. It was followed by eGT, a joint venture between Dongfeng and the Renault-Nissan Alliance, at 6,103 units.

Carmakers in China shipped 49,000 personal NEVs overseas in July, nearly 22 percent of the total vehicle exports.

Cui said China-made NEVs are gaining growing acceptance in overseas markets, and their manufacturers' expanding after-sales service networks are expected to boost the vehicles' reputation.

In late July, Chinese EV startup Nio said its first overseas vehicle battery plant, located in Hungary, is expected to be operational in September.

The plant will serve as a production, service and R&D center for Nio's battery-swap stations in Europe.

Nio entered the European market in 2021, with Norway as its first stop. In the second half of this year, it will expand to Germany, the Netherlands, Sweden and Denmark, the company said.

"The operation of the plant will add further momentum to the construction of battery-swap stations in these countries, providing a solid foundation for local battery-swaps and charging services," the company said.