China’s EV market: BYD sets new sales record in June, signalling recovery in demand after failed price war

The world’s biggest electric-car maker sold more that a quarter of a million units in June, beating the record it set just a month earlier
More motorists are now switching to electric after a price war between leading EV makers failed to spark demand, say analysts

Electric & new energy vehicles

Daniel Renin Shanghai

Published: 2:30pm, 3 Jul 2023

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BYD, the world’s biggest electric vehicle (EV) maker, sold more than a quarter of a million units in June, beating the record it set just a month earlier in the latest sign that a recovery in mainland China’s battery-powered car industry is on a solid footing.

The Shenzhen-based carmaker backed by Warren Buffett’s Berkshire Hathaway shifted 253,046 cars last month, a 5.3 per cent increase over the 239,092 cars delivered in May, it said in a filing to the Hong Kong stock exchange on Sunday evening.

In the first half of 2023, BYD handed 1.26 million vehicles to customers, almost double the figure a year ago. The carmaker reported 1.86 million deliveries for the whole of 2022, which was three times higher than its sales in 2021.

“BYD’s record monthly sales prove that the Chinese EV market is back on the fast track,” said Chen Jinzhu, chief executive of Shanghai Mingliang Auto Service, a consultancy. “Its June sales number looks impressive, showing that an increasing number of Chinese motorists are shunning petrol cars and choosing battery-powered vehicles.”

Among the vehicles sold in June, BYD delivered 128,196 pure electric cars, up 7.2 per cent from May. The company sold 123,489 plug-in hybrid cars, a 3.4 per cent monthly increase.

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Behind the scenes at BYD Auto: China’s biggest electric vehicle factory

It delivered 1,361 commercial vehicles in June, compared to 1,128 units a month earlier.

BYD’s strong performance comes after three of China’s leading EV start-ups – Li Auto, Xpeng and Nio – reported a jump in deliveries on Saturday.

Beijing-based Li Auto posted a record 32,575 deliveries last month, up by 15.2 per cent from May. It was the third consecutive monthly sales record for the electric-vehicle maker.

Shanghai-based Nio handed 10,707 cars to customers during the period, 75 per cent more than a month earlier.

Xpeng, based in Guangzhou, posted a 14.8 per cent month-on-month jump in deliveries to 8,620 units, its best sales so far this year.

The trio are viewed as China’s best response to Tesla, since their vehicles feature high-performance batteries, preliminary autonomous driving technology and sophisticated in-car entertainment systems.

The impressive numbers echoed a bullish forecast by the China Passenger Car Association (CPCA) last week, which estimated that 670,000 pure electric and plug-in hybrid vehicles would be handed to customers in June, up 15.5 per cent from May and 26 per cent from a year ago.

China’s Tesla rivals see sales jump in June, as demand for EVs rebounds

Tesla, the American EV giant, does not publish its monthly sales for the Chinese market. But data from the CPCA showed the company’s Gigafactory in Shanghai delivered 42,508 vehicles to buyers in May, up by 6.4 per cent from the previous month.

A price war broke out in the mainland’s automotive market in the first four months of this year as builders of both EVs and petrol cars looked to attract consumers worried about the economy and their income. Dozens of carmakers slashed their prices by as much as 40 per cent to retain their market share.

But the heavy discounts failed to drive up sales as budget-conscious consumers held back, believing even deeper price cuts might be on the way.

Many Chinese motorists who had been waiting on the sidelines in the expectation of further price cuts have now decided to enter the market as they feel the party is over, a research note by Citic Securities said.

A buying spree for battery-powered cars came at the expense of petrol cars in the world’s largest automotive market.

China reported sales of 5.21 million petrol-powered vehicles in the first five months of 2023, down 7 per cent on the year, according to data by the CPCA.