China’s passenger electric vehicle* (EV) sales grew 29% YoY in Q1 2023, according to the latest research from Counterpoint’s China Passenger Electric Vehicle Model Sales Tracker. Battery EVs (BEVs) made up nearly 70% of the sales. There was a remarkable 88% YoY surge in plug-in hybrid EV (PHEV) sales as well. Recently, PHEVs have been experiencing increased popularity in China. BYD secured its leading position with 79% sales growth and 9.8% points increase in market share YoY. The top 10 automotive groups, encompassing 28 brands, collectively accounted for over 80% of the total passenger EV sales.
Commenting on the market dynamics, Senior Research Analyst Soumen Mandal said, “The discontinuation of the 13-year-old New Energy Vehicle (NEV) purchase subsidy, paired with the Tesla-triggered price war, had an adverse impact on domestic EV start-ups. Especially, smart EV brands such as NIO, Xpeng and Neta reported disappointing sales figures compared to the previous quarter. Foreign brands, like Volkswagen, BMW, Mercedes-Benz, Tesla, Hyundai and Nissan, experienced a combined 4% points decrease in market share compared to a year ago. However, Tesla stands out as an exception. Other foreign brands have struggled to offer strong competition to domestic brands. Furthermore, Chinese brands such as BYD Auto, Dongfeng Motors, FAW, Great Wall Motors and Geely Auto are venturing beyond domestic borders to establish their presence across Europe, Latin America and Asia-Pacific.”
Eight of the top 10 best-selling EV models were of Chinese origin in Q1 2023. Except Tesla, no foreign models were able to secure a position in the top 10. The top 10 best-selling models collectively accounted for 46% of China’s passenger EV sales. Moreover, all the top 5 best-selling PHEV models in Q1 2023 were manufactured by BYD Auto.
Discussing the market outlook, Associate Director Brady Wang said, “The growth trajectory of China’s passenger EV market is expected to continue throughout 2023. Other supportive policies have been implemented to boost the market’s growth after the elimination of NEV purchase subsidies. In May, China’s Development and Reform Commission released a strategic document aimed at promoting EV adoption in rural areas. This will encourage auto manufacturers to introduce more affordable models, enhance sales systems, and facilitate trade-in services for rural consumers. We expect China’s EV sales to exceed 8 million units by the end of 2023.”
*Sales refer to wholesale figures, i.e. deliveries from factories by the respective brand/company.
*For EVs, we consider only BEVs and PHEVs. Hybrid EVs and fuel cell vehicles (FCVs) are not included in this study.
