Sales recover as buyers rush to bag deals
Nio, Li Auto and Xpeng benefit from discounting and government subsidies
The mainland’s electric vehicle makers saw sales recover in November as they offered discounts and as consumers rushed to take up government subsidies, bouncing back from an October performance blighted by pandemic control measures.
Shanghai-based Nio delivered 14,178 units in November, up 40.9 per cent from a month earlier, while Guangzhou-based Xpeng delivered 5,811 cars, a 13.9 per cent increase from October. Beijing-headquartered Li Auto sold 15,034 vehicles, up 49.6 per cent compared with a month earlier.
“November is a time when consumers rush to buy cars as they want to catch this year’s government subsidies … car makers are also offering discounts to boost sales by the end of the year,” said Zhang Xiang, a visiting professor at the engineering department of Huanghe Science and Technology University.
The market leader in China, American car maker Tesla, also announced discounts for its products in October in an effort to drive new sales.
China’s electric vehicle industry has been hit hard this year by lockdowns amid the country’s zero-Covid policies.
The overall car industry lost 1 million vehicles in production volume in April amid severe lockdown measures to contain the Covid-19 pandemic in Shanghai, and Changchun, a major carmaking production base.
Zhang added that January and February 2023 might see slower growth as many consumers had already made new purchases by the end of the year.
Beijing will phase out cash subsidies for electric vehicle buyers in the country from January 1.
Electric cars are expected to account for over 35 per cent of sales of passenger vehicles next year in the mainland, up from an estimated 27 per cent share this year and 15 per cent in 2021, according to credit rating agency Fitch Ratings.
China is the world’s largest electric vehicle market, with sales expected to top 6 million units this year, more than double last year’s 2.99 million.
Chinese makers saw their share prices jump in New York on Wednesday. Nio rose 21.7 per cent to US$12.78, Xpeng 47.3 per cent and Li Auto 18.7 per cent.
Xpeng said the company had “mitigated challenges brought about by Covid-related restrictions and disruptions” and “expects that deliveries will significantly increase in December 2022 as a production ramp-up of its G9 model accelerates under normalised operating conditions.”
Dozens of cities across the mainland have imposed strict pandemic curbs in recent months as they battled to keep the Omicron variant of the coronavirus at bay.
However, Sun Chunlan, the top official in charge of Covid-19 controls, on Wednesday signalled small, progressive refinements would be made to current restrictive measures.