China’s new energy vehicle sales more than halved in January, as Covid-19 weighs on world’s largest car market

The sales of new energy vehicles (NEVs) in China sank 54.5 per cent in January, the China Association of Automobile Manufacturers said on Thursday.

Sales of NEVs, which include pure electric and plug-in hybrid cars, dropped to 43,700 units last month from 96,000 units in the same period a year ago. The overall sales of vehicles, including passenger cars, trucks and commercial vehicles fell 18 per cent year on year to 1.94 million units, said the association, which is a government-backed industry consortium.

Bolstered by heavy government subsidies aimed at encouraging the use of environmentally friendly cars, NEVs had been a bright spot in China’s carmaking industry between 2014 and June last year. Sales have been dropping since, after Beijing cut these subsidies by up to 60 per cent.

The outbreak of Covid-19, the disease caused by the coronavirus, also affected sales, said Gao Shen, a Shanghai-based independent manufacturing industries analyst. “Concerns about the troubled automobiles sector are mounting because the virus will continue to affect production and sales in the coming months.”

The outbreak, which has killed about 1,300 people and infected about 60,000, originated in China’s central Hubei province. The province is home to Dongfeng Motor, China’s second-largest carmaker by volume. It also makes and sells car in China in partnership with Honda, Nissan, Peugeot-Citroen and Renault. Last year, its sales declined 4 per cent to 2.93 million cars.

Production has been disrupted over the past two weeks in Hubei, which is China’s fourth-largest production centre for vehicles. The province accounts for 9 per cent of the country’s total production volume.