The Cadillac CT6 Plug-In (Made In China)

The Cadillac CT6 Plug-In (Made In China)

China's plug-in electric vehicle sales got off to a very rocky start in 2017.

In fact, January results plunged by 74% year-over-year...the kind of drop we are not accustomed to seeing anywhere else in the world when it comes to EV sales.

In total only 5,682 NEVs were sold, while production decreased by 69.1% to 6,889.

Especially interesting is collapse of plug-in hybrid sales, down to just 704 (down 90%), while BEVs noted 4,978 deliveries.

In 2016, China logged sales of 507,000 vehicles, missing an over ambitious target of 700,000.  For this year, the only slightly higher target of 800,000 deliveries indicates even the government knows there is trouble brewing...but with January's poor result, that number looks to already be unobtainable.

Why the sales drop?  Uncertainty and the pullback of incentives.

Sales falling as incentives decreased by 20% according to Chinese sources, while there is even stronger hit coming from government:

"The system received a major shock when manufacturers were informed at the end of last year that all of their vehicles would be re-evaluated for inclusion in a catalog of models eligible for subsidies. But the revised catalog, which previously covered 2,193 models from 235 producers, has yet to be published, leaving the industry in limbo.

“According to the rules, all products must first be included in the catalog, and only after that can manufacturers get subsidies for sales and promotions,” CAAM official Xu Haidong said. “The new catalog hasn’t come out yet, so manufacturers don’t dare to sell because if they do, they can’t receive any subsidies.”

Xu added that the uncertainty is likely to affect sales through February and March, but levels should rebound after the new catalog comes out. He predicted that overall sales should reach 700,000 to 800,000 units this year as clarity returns to the market when the catalog is released."

Situation should become clear in two months or so.

source: Caixin