China, the world’s largest electric vehicle (EV) market, saw a 9.4% year-on-year increase in EV sales in May, according to figures released Tuesday by an industry association.
Impressive Sales Figures
Last month, approximately 531,000 fully electric cars were sold in China, reported the China Passenger Car Association (CPCA). Additionally, 881,000 hybrid models also found buyers.
Month-over-month, EV sales jumped 14.8%, rebounding from an 8.8% decline between March and April.
Chinese Brands Dominate the Market
Dozens of innovative local brands have emerged in recent years in China, competing fiercely with foreign manufacturers who are struggling to adapt.
In May, Chinese automaker BYD once again emerged as the undisputed leader in electric vehicles in its home country, selling over 250,000 cars. This put it far ahead of American rival Tesla, which has a massive factory in Shanghai and is preparing to establish a second one for battery production, with over 72,000 cars sold.
BYD Expands Global Reach
BYD, which markets its cars in about fifty countries, including Europe, is among the many Chinese manufacturers now accelerating their overseas expansion. The group surpassed Tesla as the world’s largest seller of electric vehicles in the fourth quarter of 2023.
Economic Slowdown and Price Wars
The Chinese electric vehicle market has experienced rapid growth in recent years, driven in part by purchase subsidies. However, the economic slowdown, which is weighing on consumer spending, has led to a price war among manufacturers in recent months, impacting their profitability.
Western Scrutiny and Potential Tariffs
These figures are released at a time when Chinese manufacturers are facing increased scrutiny in Western countries.
Under pressure from France, which has several historic automakers, the European Commission launched an investigation last year into Chinese state subsidies for the sector.
In the coming days, the commission will announce whether it will increase tariffs on Chinese electric cars, currently taxed at 10%. Authorities could implement these countervailing measures as early as July 4th.
In May, Chinese exports of hybrid and electric vehicles declined by 4% year-on-year, according to the CPCA.