Uncertainty Over EV Subsidies in China Turns BYD’s Plug-In Sales Down, Way Down

8 months ago by Mark Kane 11

BYD Qin EV300

BYD, the largest plug-in electric car manufacturer in both 2015 and 2016, fell victim to the subsidy uncertainty in China.

BYD Tang

We could see the trend of fear among the Chinese consumer already starting to develop in late 2016, when BYD wasn’t able to sell around 10,000 units monthly, delivering just around 8,000 in November and December after hitting the 5 digit mark several months in a row.

However, January of 2017 was disastrous, as we note only several hundred sales of the Qin (208) and Tang (278) plug-in hybrids for BYD.

No data of all-electric models as of now, suggests a 91% drop to total 486 sales!

At the core of the issue is a notification by the government at the end of 2016 that all the New Energy Vehicles (all-electric and plug-in hybrid) models would be re-evaluated for incentive eligibility in 2017, after some scandal on claiming rebates occurred earlier in 2016.

Sounds like a good idea to us, however the only problem is that the catalog of eligible vehicles for 2017….has yet to get published by the Chinese government – leaving everyone out in the cold in January, and most of February.

We assume that BYD’s plug-in vehicle customers are also waiting for the company to be included on the new subsidies list, rather than paying the MSRP bill.

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11 responses to "Uncertainty Over EV Subsidies in China Turns BYD’s Plug-In Sales Down, Way Down"

  1. ModernMarvelFan says:

    Well, this just gives EV critics more evidences that EV sales are incentives driven. *sigh*

    1. Dav8or says:

      Low cost, or moderately priced EV sales absolutely are. Luxury EV sales are not so much for obvious reasons. I expect to see the same declines here if the new government kills the federal tax credit.

      Bolt sales will plummet, Leaf sales will plummet, i3 sales will plummet, iQonic sales will plummet, even Model 3 sales will fall off after the initial rush has subsided and all the Model S owners have either traded their S, or added the 3.

      On the other hand, Model S and Model X sales should remain as they were as well as possibly Lucid Air and who knows? Maybe even Faraday Future too.

      EV sales over all are not dependent, but at this point, mass adoption is very much dependent.

      1. SJC says:

        Ending EV tax credits in the U.S. would have a large effect on the development and sales of affordable EVs. Maybe that it what the right wing had in mind all along.

  2. Cosmacelf says:

    Not really. It would be different if the govt said no subsidies. Instead they said there might be subsidies if you wait. So obviously, the majority of customers are waiting.

  3. Frank says:

    Also approved subsidies from prior years have not been paid. Companies no longer willing or able to subsidize the subsidies.

  4. Bob Nan says:

    Subsidies cause a lot of uncertainty. Once if its approved, then the sales will skyrocket.

    If they want to eliminate, then it should be done in a phased manner like cutting by 20% every year over the next 5 years.

  5. Joe Kettle says:

    PRC touts 800,000 ev sales goal for 2017. But hasn’t paid 2nd half 2015 nor all of 2016 subsidies to ev manufacturers.

    Looks more like ev manufacturers are pulling production until they are paid. BYD i believe only did 100 ev units while GEELY and KNDI did 0 even though they had some models approved.

    Smog is getting bad enough in China that Im thinking about selling torches and pitchforks on Alibaba.

  6. The free market is starting to clear out EV’s that can’t beat petroleum vehicles without incentives. Opening the door for honeybadger style EVs designed to crush petroleum vehicles at point of sale without incentives. The most sustainabile products are products that crush the competition at point of sale without any artificial props.

  7. Just_Chris says:

    Time to flood the export market then, I’m up for it, I’m pretty sure the free trade agreement the Aussie government signed would mean that China could dump as many cars as it liked here.

  8. a-kindred-soul says:

    It’s a misunderstanding of this story that incentives make an EV sell or not.

    In other words: this story is not about “look, if there are no incentives BYD would sell 90% less.”

    This is about people, who want to buy an EV, knowing that the EV they like will be cheaper soon. People are not crazy: they wait.

    This would also happen if GM would accidentally leak the information that they will lower the MSRP of the Bolt by a few thousand starting May. Bolt-sales would kind of stop.

    Yet without the information leak Bolts would sell well (as they do).

    So again: this doesn’t tell us that EVs won’t sell without incentives, it tells us something about human behavior when we know the same product will be cheaper soon.

    That is also the reason why economists are afraid of deflation.