China’s New Energy Vehicle (NEV) market, after a sluggish start to the year, experienced a strong rebound in the third quarter, according to RBC Capital Markets analyst Tom Narayan. This resurgence is driven by a surge in sales of Plug-in Hybrid Electric Vehicles (PHEVs), which are now capturing market share from Battery Electric Vehicles (BEVs). This development poses a new challenge for international brands like Volkswagen and Tesla, who are vying for dominance in the rapidly expanding Chinese EV market.
September’s sales figures demonstrate the robust recovery. China’s NEV sales reached 1.123 million units, marking a 50.5% year-over-year increase, according to the Chinese Passenger Car Association (CPCA). This growth outpaces the previous months, with August registering 1.025 million units and July reaching 878,000. For the third quarter as a whole, NEV sales climbed 44% year-over-year, exceeding the 32% and 34% gains witnessed in the second and first quarters, respectively.
The surge in PHEVs is particularly notable. In September, PHEV sales soared 94.7% year-over-year, while BEVs saw a 28.8% increase. This trend has led to a noticeable shift in the market with PHEVs now accounting for 43% of total NEV sales, while BEVs hold the remaining 57%.
Tesla, a major player in the Chinese EV market, also reported impressive results for September. The company achieved 72,200 domestic retail sales in China (excluding exports), representing a 66% year-over-year increase. This growth surpasses their August sales of 63,456 and July’s 46,227, aligning with the broader positive trend in the BEV market. These strong figures demonstrate Tesla’s continued strength and appeal in the Chinese market.
The resurgence in the Chinese NEV market is a positive sign for the industry and offers reassurance to investors who were concerned about a potential slowdown. The rapid adoption of PHEVs, along with the ongoing growth of BEVs, highlights the continued momentum of the electric vehicle revolution in China. As the market continues to evolve, the competition between domestic and foreign brands will intensify, creating a dynamic landscape for innovation and growth.