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New electric vehicle sales plunge in China for the fifth month in a row

By Lawrence Gash

Beijing welcomes Tesla and reduces subsidies for Chinese EV makers as sales fall

Sales of new electric vehicles (EV) in China fell in November for the fifth consecutive month. The sector has struggled to grow as government subsidies subside.

According to the China Association of Automobile Manufacturers (CAAM),November electric vehicle sales fell by 43.7 per cent on the previous year to 95,000 units. This figure is just shy of October’s 45 per cent drop off, which was one of the steepest declines this year.

In a statement CAAM’s assistant secretary-general Chen Shihua said:

"Because of the insufficient demand of the domestic market, the pressure for automakers to upgrade their technology to the national standard, and the major subsidy cuts for new energy vehicles, the recovery of production and sales is still limited.”

Three weeks ago Fu Bingfeng, CAAM’s executive vice-chairman outlined his vision for stimulating the market.

“Our works now will focus on boosting real consumption-side demands, including improving infrastructure and supply chain.”

This might be easier said than done however, as at a press conference this morning the CAAM stated that China's overall auto sales are expected to fall by two per cent in 2020 to 25.3 million units. If the overall auto forecast points towards stagnation then the EV market will likely suffer more than the traditional auto market.

Although EV sales in China peaked in June 2018, throughout this summer Beijing became increasingly unwilling to subsidise the Chinese EV industry and has reduced the level of state support offered to local manufacturers.

Instead it has welcomed manufacturers from overseas, particularly the foremost electric vehicle brand, Elon Musk’s Tesla. Tesla’s Shanghai Gigafactory 3 is currently under construction and will produce Model 3 and Model Y cars with an initial production rate target of 250,000 electric cars per year.

Further Reading

Chinese auto-executives hope for rebound in electric vehicle market

Porsche Taycan electric sports car tops 30,000 pre-orders

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