Major Chinese automakers Geely and Changan Automobile reported strong electric vehicle sales growth for May, posing serious challenges to leading player BYD which launched a new round of price cuts and could face potential regulatory scrutiny in its homeland.
Why it matters: The figures come on the heels of China’s top industry regulator promising to strengthen efforts to rein in “involution-style” competition in the country’s auto industry, with measures such as random inspections on product consistency and joint crackdowns on unfair competition, according to a report by China’s state-run news agency Xinhua.
- China’s Ministry of Industry and Information Technology (MIIT) on May 31 warned that recent disorderly price wars have significantly disrupted normal business operations and posed a threat to the industry’s healthy and sustainable development, an official with the ministry told Xinhua.
- According to another statement published on the same day by the China Association of Automobile Manufacturers (CAAM), “a major carmaker” kicked off recent price cuts on May 23, which has sparked what they called market panic. BYD on May 23 announced a limited price cut of up to RMB 53,000 ($7,372) on its EVs, TechNode reported.
Details: BYD on June 1 posted May sales of 376,930 passenger electric vehicles, a 14.1% rise from a year before but essentially flat growth compared with April. By comparison, Geely and Changan’s EV sales were up 135% and 70% from a year ago, respectively.
- Geely attributed last month’s all-time high partly to the strong performance of its small hatchback Xingyuan, a competitor to BYD’s Seagull, with deliveries exceeding more than 200,000 units just 200 days after its launch. Geely’s higher-end lineups Lynk & Co and Zeekr also posted solid growth over the period.
- State-owned Changan saw its EV sales grow 70% from a year earlier to 94,828 units in May. Specifically, sales of its mainstream EV brand Deepal were up 78% year-on-year to 25,521 units, while premium marque Avatr’s deliveries surged 179% annually to 12,767 units over the month.
- Stellantis-backed Leapmotor became the top-selling EV startup for a third consecutive month and reported deliveries of 45,067 units in May, a 148% surge from the previous year. The affordable, extended-range hybrid C10 and C11 have helped the Hong Kong-listed firm continue to gain momentum.
Context: Retail sales of China’s passenger new energy vehicles (NEVs), including all-electrics and plug-in hybrids (PHEVs), are expected to grow by 24% year-on-year and 8.3% month-on-month to 980,000 units, according to estimates from the China Passenger Car Association (CPCA). The market faced slowing growth during the second half of the month after the five-day Labor Day holidays, said the CPCA.
READ MORE: Great Wall Motor’s CEO goes public criticizing BYD over unfair competition
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