Sales of plug-in electric vehicles in China, where they are called New Energy Vehicles (NEV), are very strong this year.
The results are so good that the China Passenger Car Association (CPCA) recently revised upward its forecast for 2022, from 5.5 million passenger cars to 6 million passenger cars (plus commercial vehicles on top of that).
According to CPCA, in July, the wholesale sales of new energy passenger vehicles increased 129% year-over-year to 564,000, including 428,000 all-electric and 136,000 plug-in hybrid cars. Retail sales increased last month by 117% year-over-year to 486,000.
After seven months of 2022, the total retail sales of NEVs increased 121% to over 2.7 million, which is pretty close to the 3 million units noted in the 12 months of 2021.
With five months to go and more than half a million units sold per month, 6 million appears to be not only possible but maybe even a bit cautious. Especially because the final months of a year are usually the strongest in China. We would not surprised if the volume would increase to 1 million units a month within the next 12 months.
It's worth noting that in July, NEV share out of the total Chinese car market was above 26% (both, wholesale and retail sales).
China is clearly on the rise with many new models in the pipeline. However, if the penetration is above a quarter of the total market right now, the growth might slow down in the coming year or two.
For Chinese manufacturers, it's a crucial time. If they want to continue to grow at a current rate, they have no choice but to expand beyond China (which some of them are already doing). And the only plug-in markets big enough to matter in the next several years, are Europe and North America.
It's worth paying attention, especially to the BYD, which reports more than 162,000 plug-in electric car sales, including over 4,000 exported - the highest monthly result that we have seen so far (after over 2,000 in May, which was the previous record).