According to industry data released on Friday, sales of new energy vehicles (NEVs) in China decreased 18.6% month over month in January after the country reduced NEV subsidies by 30%.
According to figures from the China Association of Automobile Manufacturers, sales of NEVs, which comprise battery-powered electric vehicles, plug-in petrol-electric hybrids, and hydrogen fuel-cell vehicles, hit 431,000 in January, up 135.8% year on year (CAAM).
December sales increased as purchasers rushed in ahead of a January subsidy drop, according to Cui Dongshu, Secretary-General of the China Passenger Car Association (CPCA), another industry organisation.
In China, 518,000 NEVs were sold in December, up 159.5 percent year over year.
China has high ambitions for pushing NEVs as part of its attempts to reduce air pollution, and considers the market has developed enough so that demand would lead the industry instead of subsidies.
According to CAAM, total automotive sales in the world’s largest car market increased 0.9 percent year over year in January to 2.53 million vehicles, the first increase in eight months.
CAAM said in a statement that demand continued to rise in January as the lunar new year approached, while chip supply continued to increase. However, because to the impact of the COVID pandemic in some locations, sales growth has halted, according to the report.
Due to a global scarcity of chips, which are used in everything from brake sensors to power steering and entertainment systems, automakers all over the world have had to halt or suspend production, raising prices and reducing sales.
According to CPCA figures released on Monday, Tesla Inc, a California-based electric vehicle manufacturer, sold 59,845 automobiles built in China in January.
Due to severe competition, Tesla is the only foreign automaker among China’s top ten best-selling NEV brands, as local manufacturers such as Nio (NIO.N), Xpeng Inc, and Li Auto Inc cater to Chinese consumers with vehicles that are more tailored to local tastes.
(Adapted from USNews.com)