The year of the rat will be an exciting one for Chinese automotive companies, especially for the New Energy Vehicle companies!

新年快乐 ! Happy New Chinese Year to all. The upcoming year will be an exciting one for New Energy Vehicle (NEV) companies in China, as many of them just start selling their NEV cars and will gain first sales results. This is happening in a tense environment, as sales figures of new car sales in the Chinese market have dropped in 2018 and 2019 after they increased for more than twenty consequent years. On top, subsidies for NEV vehicles were reduced, however, there seems to be a tactical change.

For foreign automotive companies, the Chinese car market is historically one of joint ventures. Although legal requirements have been lowered lately, most manufacturers do not suddenly try to find their own way. Market circumstances, required insights, and relationships are just too important for that. This is why most big foreign manufacturers work together with one of the big Chinese car companies. In short, the picture looks like this:


The NEV market is mainly driven by pure NEV startup companies. In 2018, NEV sales accounted for 4.6% of total car sales. Let´s take a look at the potential stars of this rising market:

So far, Aion, XPeng, and NIO can already present first sales results. In addition, Byton and AI Ways both just started selling their models at the end of 2019. Looking at the plans for 2020, most of the mentioned companies will launch new models in the next few months! It will also be exciting to see which company will start selling its cars outside China first! As of now, it seems that AI Ways and Byton are closest to launch. Finally, there are still new companies and joint ventures pushing into the market, such as Daimler together with Geely, Fiat Chrysler together with Foxconn, and the Evergrande Group.

However, some companies will also struggle in the near future. In June 2019, subsidies for NEV were cut by half by the Chinese government with plans to drop them completely by end of 2020. As a result, NEV sales dropped as well by about 50%. Although, there were rumors this week that the timeline of the subsidies will be shifted in order to stabilize sales of NEVs. In addition, the large automotive companies slowly start pushing into the market as well, such as Volkswagen with its ID3, increasing the competition. In any case, it will be an exciting year ahead in the Chinese NEV market!


Leave a comment

Your email address will not be published. Required fields are marked *

Pin It on Pinterest