Spot / Automotive industry: electric vehicles account for 11% of auto sales in China in May
The author is an analyst for NH Investment & Securities. He can be contacted at [email protected] – Ed.
– Auto sales in China in May amounted to 1.63 million units (+ 1.1% year-on-year). While the annual growth rate has weakened slightly due to the weakening of the low base effect induced by Covid 19, healthy demand has been maintained overall. By power source, sales of ICEV fell to 1.45 million units (-6.1% year-on-year), while sales of xEV (EV / PHEV) increased to 180,743 units ( + 165.2% year-on-year), representing 11.1% of the total market (compared to 5.2% in May 2020 and 9.8% in April 2021), the highest monthly level.
– Tesla sold 21,936 units (Model 3: 9,208 units; Model Y: 12,728 units) in May, raising its share of electric vehicle sales to 12.1%. It should be noted that Tesla sales fell to 11,671 units in April due to a boycott caused by quality issues; however, the company’s sales recovered to some extent in May, topping 20,000 units. That said, uncertainties remain regarding quality issues and political trends in China. On the other hand, the sales of three new Chinese electric vehicle players (Nio, xPeng and Li Auto) amounted to 16,720 units (+ 60.5% year-on-year), giving them a share of 9.3% of the Chinese electric vehicle market (compared to 9.7% in May 2020 and 11.3% in April 2021).
– Hyundai / Kia May (retail) sales in China were 31,212 units (-28.9% year-on-year; market share of 1.9%) and 15,012 units (-27.5% year-on-year; 0.92%), respectively. Their combined market share remained low at 2.8%. Given the recent improvement in its global competitiveness (including in the United States), the weak sales of Hyundai Motor Group (HMG) in China is attributed to the failure of its local branding strategy. While HMG’s sales in China will likely remain sluggish for now, we expect a turnaround from 2023, a time when the company is expected to shift its business strategy towards new energy vehicles (NEVs). We also welcome the strengthening of HMG’s global competitiveness as evidenced by the continued expansion of market share in the US market.