When I last wrote about the Chinese NEV market in January 2020, Corona was just about to start and companies did not yet see it coming. For all of us, the last year went quite different from what we expected, and many people and organizations had to cancel or postpone plans. As a win over Corona is likely in 2021, another view on the Chinese NEV market, which was just about to take off, becomes interesting. Who made progress in 2020? Who struggled? Who is in the pole position for 2021? This article provides some answers.
New Energy Vehicle (NEV) sales in China increased by 10.9% in 2020 compared to 2019. While the total amount of car sales reached 1.37 million cars, this equals a market share of about 5.4% of all car sales in China.
The month of December 2020 was extraordinary strong for NEVs, with a 49.5% increase compared to December 2019. For 2021, the total amount of NEVs is estimated to reach 1.8 million units.
The strong recent growth is a consequence of the new governmental 15-years development plan for the NEV industry for the years 2021 to 2035 released in November, which aims at transforming China into an automotive powerhouse. The plan includes the goal to increase the share of NEVs of total car sales by 20% by 2025 and to completely electrify public transportation by 2035.
Direct subsidies will be reduced in 2021, even though not as sharp as expected a year ago. Plans suggest that the government will provide subsidies until at least 2022. In addition, the government introduced a policy that car makers need to reach certain levels of NEV sales from their total sales, which will additionally push NEV sales.
Considering the list of the most important NEV startups and pure NEV companies in China, most of them drastically increased their sales in 2020. AI Ways and Li Auto even started their initial sales last year:
The table above includes only Chinese NEV companies, which are usually startups (e.g. Byton, AIWays) or separate units of larger companies (e.g. Aion) or companies that are new to the automotive market (e.g. Foxconn).
The overall Chinese NEV market includes many foreign manufacturer and NEV models from large Chinese automotive companies that do not primarily focus on NEVs. Although these are not the focus for this article, the full picture would be completed by:
1) Chinese automotive companies, from which BYD, GAC, SAIC, and BAIC are especially important.
2) Multiple foreign companies, from which Tesla is by far the most important one, dominating the overall NEV market by far. By the first half year 2020, sales of the Tesla model 3 reached almost 50,000 sales, while the second most successful model, from BYD, had only approximately 21,000 sales.