MNI INTERVIEW: China EVs To Continue Outselling Fuel Cars

MNI (BEIJING) - China’s electric vehicle sales will account for above 50% market share going forwards following July’s purchases surpassing internal combustion engine (ICE) cars for the first time on record, a leading Chinese car industry expert told MNI.

“Now that NEVs have broken the 50% mark we expect sales to remain above gasoline cars given current trends,” said Cui Dongshu, secretary general of the China Passenger Car Association, pointing to sales of new energy vehicles during July which totalled 879,000, up 37% y/y, taking 50.8% of the market. Faster technological improvements and more obvious cost reductions than ICE vehicles drove the result, he said.  

Yearly penetration for NEV sales would increase towards 50% by year end, up from the current 43.1% based on 11.6 million total sales so far, Cui noted.

MNI reported last month the switch to electric vehicles would drive China's crude oil refinery processing and imports lower in 2024. (See MNI INTERVIEW: China Oil Imports To Fall Despite H2 Boost)

CANADIAN IMPACT

Canada’s recent decision to impose 100% tariffs on Chinese NEV imports, following the U.S.’s lead, would have little impact on China’s exports given the market was small and the country’s cold climate and expansive terrain was not suited to NEV cars and infrastructure, Cui added.

China would instead focus on developing nations as the strongest growth markets, he continued, noting Europe came second with the U.S. and Canada in third.

Europe's recent decision to impose tariffs of up to 36.3% on Chinese NEVs would curtail the expansion of exporters in the short run due to increased costs, however the move would accelerate efforts to find a sustainable relationship with more local assembly and supply chains, Cui added. But he denied state subsidies had led to the rapid expansion of the country’s NEVs, noting the increase was down to strong market competition.

Despite rising trade tensions, exports can maintain sustained growth given they were spread over a wide range of countries and regions, Cui said. 

China's exports of new energy vehicles reached 1.17 million from January to July, up 25% y/y, with the U.S. and Canada accounting for 28,000 units, or 2.4% of the total shipments.