• PV sales reached 25.54 million units in 2023, up 10.4% year-on-year, marking the first time in five years the growth rate has exceeded 10%. This surge is attributed to the stronger-than-expected economic recovery in the second half of the year and the automakers’ extensive strategies of trading price for volume.
• NEVs and traditional fuel vehicles will be in a long-term battle for market share, with sales of the latter still experiencing a steep downward trend.

Market demand sub-200K RMB rationalizes, while the 300K-500K RMB bracket is set for a showdown between smart features and luxury amenities.

• From the perspective of consumer budgets, the competitive landscape at the top of the market is divided into three price ranges. Below 200K RMB, the segment is dominated by electric vehicles, with BYD standing out as a leader. In the 200K to 300K RMB bracket, VW faces stiff challenges. For the 300K-500K RMB segment, the leading position is contested by BBA and intelligent brands such as Li Auto and NIO, while the market above 500K RMB is still led by the BBA group.
• The 200K-500K RMB market segment is poised to welcome several new models from popular NEV brands like Li Auto, AITO, and Xiaomi in 2024, marking the year’s most significant industry highlight. Meanwhile, the perennially stable luxury market share of the BBA may face disruption in 2024.

The automotive market is increasingly shifting towards the central-northern regions and mid-tier cities.

• Regionally, market shares in the Northeast, North China, Northwest, and Central China regions have grown, while other areas have seen a decline in their market share.
• By city, the market share in fourth and fifth-tier cities continues to decline, while second and third-tier cities have seen an increase in their shares, indicating a market shift towards mid-tier cities.

As overseas influence has grown, PV exports have become a new volume growth area.

• PV exports have maintained a high growth trend. In 2023, the export of complete vehicles reached 3.8 million units, a year-on-year increase of 60%, with new energy vehicles hitting 1 million, a 71% increase.

High-quality development leads to the reshaping of industrial chain ecosystems.

• The automotive industry once centered around OEMs, but in the past two years, industry profits have begun to disperse upstream and downstream.

High-quality development leads to innovative exploration of channel models.

• The rise of direct sales models presents new opportunities for the automotive industry, transforming not only the sales channels but also contact points such as finance, maintenance, and software services in the aftermarket.

A more distinct segmentation in purchasing decisions has emerged.

• Nearly 90% of gasoline consumers make comparisons within the fuel vehicle market, creating an independent competition; approximately 80% of pure EV users compare among electric models, forming a separate competitive segment in the EV market.
• Plug-in hybrid & range extender users not only compare within their own vehicle types but also with gasoline vehicles, posing a threat to the fuel vehicle market.

The market share of fuel vehicles in the 100K to 200K RMB price range has declined the most, gradually being encroached upon by new energy vehicles.

• In the fuel vehicle market, market shares have declined in price segments below 300K RMB, while shares remain stable above the 300K RMB price point.
• Pure electric vehicles have seen a market share increase in the 100K to 400K RMB price range, while plug-in hybrids/range extenders have maintained rapid growth in price segments above 100K RMB.

BYD surpassed VW and Toyota to become the sales champion of 2023.

• Benefiting from the explosive growth of the new energy market, BYD surpassed Toyota and VW, achieving the sales champion of 2023 with a growth rate of nearly 50%.
• Traditional market leaders such as VW, Toyota, Honda, Nissan, and others experienced a sales decline in 2023.

The SUV segment saw the largest growth in the 100K to 200K RMB price range, while the market share of sedans has gradually declined.

• In the sedan market, the under 200K RMB price segment experienced a significant reduction in market share, while the 200K to 400K RMB range saw some growth.
• In the SUV market, the market share in the 100K to 200K RMB price range is now on par with that of sedans, and the 300K to 400K RMB range has also seen some growth.

VW continues to lead the sedan market, while BYD dominates the top spot in the SUV market.

• In the sedan market, VW’s sales reached 1.494 million units, followed closely by BYD, with Toyota falling far behind the first two.
• In the SUV market, BYD achieved sales of 1.02 million units, with Toyota ranking second and VW in third place.
• In the MPV market, Wuling, primarily with its Hongguang models in the budget segment, ranks first, followed by Trumpchi in second place.

Sales in the East China region lead and continue to grow, while the Central and Northern regions have all seen an increase in sales.

• In 2023, except for a decline in sales in the South China region, all other regions experienced growth in sales, with the Northwest increasing by 29% and the Northeast by 21%, showing remarkable performance.

The penetration rate of new energy products has been increasing year by year, exceeding 40% in first-tier cities.

• The penetration rate of new energy products in first-tier cities reaches as high as 43%, with the rate in new first-tier cities also surpassing 35%.
• The penetration rate in second and third-tier cities has seen a substantial increase of up to 9%.

BYD leads its competitors across first to fourth-tier cities, while Tesla’s customer base is concentrated in first-tier and new first-tier cities.

• Across first- to fourth-tier cities, BYD has, for the first time, overtaken VW to claim the top spot, with VW and Toyota following in second position.
• Tesla’s sales are concentrated in first-tier and new first-tier cities.

NEV lead with sales on the rise, achieving a 34.7% market penetration rate.

NEVs make a significant contribution to exports, standing alongside solar energy and lithium batteries as the ‘New Trio’ in foreign trade exports.

BEVs Lead in the New Energy Sector, with New Entrants in PHEV/EREV Segment.

Domestic brands occupy over 80% of the new energy market share, while joint venture growth is slow.

The scale of the new energy market exhibits an ‘oval’ distribution, with penetration rates in a ‘dumbbell’ configuration.

New energy sedans show steady improvement, while SUVs surge powerfully.

The elimination round for new energy players is approaching, with competition intensifying and the industry landscape beginning to take shape.

New energy is accelerating penetration across cities of all tiers, with the growth rate of penetration in first-tier cities showing signs of fatigue.

CATL and BYD command a 70% share of the market’s power battery installation volume, with LFP being the predominant battery material.

Public charging advances steadily, private charging strides rapidly forward, and the charging station count increasingly meets demand.

It sold 2.38 million terminal units in 2021 and it will reach 3.5-4 million units in 2022.
In 2021, the year-on-year growth rate will more than 150% and the growth rate will continue in 2022 to reach 50-70%.
The penetration rate will reach 11% in 2021 and it will increase rapidly to 15-17% in 2022.

The sales volume of BEV was 2.38 million in 2021, up 158.61% year on year, in strong contrast with the steady growth of fuel vehicles, which accelerates the pace of the transformation of the vehicle market to new energy.

• The BEV market started relatively low in 2020, but the market after the epidemic showed the characteristics of gradual improvement and the super strong trend has continued to this day.
• China’s car market entered a relatively stable growth feature in 2021, but the BEV market maintained a high growth trend. From January to March, the new energy started strong and continued to strengthen from May to December.

Situation Of Market :

BEV penetration rate exceeded 10% in 2021, which will usher in the market explosion.

• Industrial growth is in line with the “S-shaped curve” and 10% -15% is the rapid rising inflection point. If the penetration rate exceeds 10% in 2021, BEV will usher in the outbreak period.
• In 2021, the BEV market exceeded 10% for seven consecutive months and gradually increased, reaching 18% in December. Referring to the industrial development curve and the European market with rapid electric transformation, China’s BEV market will usher in a market explosion period.

Supply side :

Double points to promote the electric transformation of the industry and boost the outbreak of the BEV market.

• Under the background of “carbon peak and carbon neutrality”, during the 14th Five-year Plan period, the new energy policy has been changed from purchase restriction and subsidies to double points to guide the industrial transformation.
• According to the relevant policies of the Ministry of Industry and Information Technology, the proportion of new energy vehicle credits needs to reach 14% in 2021 and will continue to improve in the future. However, from the specific performance of car companies, the double points of traditional car companies are still under pressure and the transaction price of double points is high and the pressure of electric transformation of car companies in 2022 is still large.
• According to the relevant policies of financial subsidies for new energy vehicles issued by the four ministries and commissions in 2020, the subsidy standard in 2022 will be reduced by 30% on the basis of 2021. Under the same conditions, the EV with pure electric mileage above 400km will be reduced by 5400 yuan and the EV with pure electric mileage of 300-400km will be reduced by 3900 yuan.

Supply side :

The relief of supply chain pressure provides a good industrial environment for BEV outbreak.

• China’s auto supply was shrouded in a dark cloud of core shortage and rising raw materials in 2021 and the supply chain pressure will gradually ease in 2022.
• Due to the global epidemic combined with the trend of automobile intelligence, China’s automotive chips were widely scarce in 2021 and the supply is catching up with the demand in 2022 and the supply of automotive chips will gradually recover.
• The continuous rise of raw material prices has brought huge cost pressure to downstream automobile manufacturers and with the expansion of production and sales scale in 2022, the rising cost of raw materials will be diluted.

Demand side :

Domestic demand continues to grow, providing a good macro environment for the BEV outbreak.

• During the 14th Five-year Plan period, the macroeconomic and residents’ income increased steadily and the growth of income is the basic driving force for the growth of automobile consumption demand.
• During the 14th Five-year Plan period, the macro economy is still expected to achieve an average annual growth rate of 5.6%. In 2020, in response to the epidemic, the central government increased and reduced taxes and fees for private enterprises and the proportion of household income in GDP increased. In 2022, under the central government’s “six guarantees” policy, the proportion of household income in GDP is expected to remain stable.
• In 2021, the overall passenger car market of China stopped falling and recovered and the passenger car industry after shock and adjustment will enter a period of steady growth, laying a good foundation for the growth of BEV.

Demand side :

Private consumption is dominated, providing a solid user base for the BEV outbreak.

• Private consumers will become the dominant market. After the opening of the private market, the acceptance degree of BEV models will accelerate, and the sales volume of BEV will increase rapidly.
• Taxi and online ride-hailing will no longer be the dominant force in the BEV market. From 2017 to 2019, the proportion of BEV rental category gradually increased, decreased slightly in 2020 and low in 2021, less than 14%.
• From 2017 to 2021, the personal market share gradually increased, with the most significant increase in 2021, reaching 70.3%.

Market prediction :

In 2022, the BEV market size will exceed 3.5 million and the penetration rate will reach 16%.

• Under the combined action of policies, supply, demand and products, the terminal sales volume will reach 3.5 million units in 2022, with a penetration rate of 16%.
• At present, the Chinese market is still in the transition stage from the early stage to the late stage of popularization and the new car sales are gradually shifting from the incremental market to the stock market. Although China’s auto market fluctuated in 2018, in the long run, the production and sales of China’s auto market are now at the end of the short-term adjustment and it will maintain a moderate growth trend in the future.
• In the context of the global energy transformation, under the joint action of policies, supply, demand and products, China’s BEV market has entered an outbreak period.

Market prediction :

Sales to the head concentration, the market competition in 2022 intensified.

• Traditional brands accelerate their efforts and the rapid growth of new power brands drives the continuous increase of BEV market concentration and intensifies the market competition.
• Among the traditional joint venture brands, Volkswagen accelerated the transformation of electrification and the ID family entered the sales TOP10 brand for the first time.
• The sales of new power brands grew rapidly, not only the first echelon of NIO and XPeng Motors grew rapidly, but also the second echelon of which NETA and LEAPMOTOR.
• In 2021, the market concentration continued to increase and the sales share was rapidly concentrated to the head and mainly concentrated in the traditional independent brands and new power brands.