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China’s EV Makers Face Q2 2023 Domestic Slowdown as Overseas Markets Set to Overtake 10% Milestone

China’s EV market growth continued to slow, with Q2 2023 EV unit sales seeing a rise of only 37% YoY – lower than the global average
Strong results from four of China’s big 5 EV makers were offset by a mix of tepid and disappointing results across a range of key manufacturers
Chinese OEMs look prepped to expand globally, with share of global (ex-China) auto sales set to pass a significant 10% milestone in Q3 2023
SAIC Group and BYD Auto account for the bulk of exports, with the latter well positioned for long-term growth as it enters Europe in earnest later this year

Beijing, Hong Kong, London, New Delhi, Boston, Seoul – September 8, 2023

According to Counterpoint Research’s latestChina Passenger Electric Vehicle Tracker, Q2 2023battery electric vehicle (BEV) unit sales in the country grew only 37% YoY, lower than theglobal average of 50%, highlighting a slowdown in domestic growth as the frail Chinese economy impacted demand in the world’s biggest EV market.

BYD Auto and Tesla continued to dominate unfazed, accounting for more than one-third of domestic unit sales. But the market also saw GAC Group establish itself as a solid number three on the back of strong demand for its line of compact Aion sedan and hatchbacks as it aggressively reduced prices in the midst of a price war.

“We’re also seeing strong numbers from several mid-sized domestic players that are having success across a broad range of vehicles – from sub-compact city cars through to long-range luxury cruisers. But many automakers are struggling as the market eases,” notes Ethan Qi, Associate Director. “China’s a big market but there’s also a lot of small carmakers, so any kind of slowdown and you’re probably going to see some consolidation as weaker companies inevitably exit.”

China Passenger EV* Unit Sales Share and YoY Growth by Auto Group

Source: Counterpoint Research China Passenger EV Tracker. *Battery electric vehicles (BEV) only.

Many Chinese OEMs are looking externally for growth and are gaining a foothold in markets like Europe and Asia. “If you exclude China, by far the biggest market for EVs globally is Western Europe. It’s not China, but growth has started to accelerate this quarter,” says Qi. “Right now it’s all about MG, the SAIC-owned British badge that’s spearheading Chinese growth in the region with its compact cars and SUVs. It’s filling a vacuum in the affordable segment, where traditional names are struggling to supply consumers with EVs in that $20,000 – $40,000 sweet spot. This is where Chinese brands have a lot of depth.”

Chinese OEM Overseas EV Sales and Market Share

Source: Counterpoint ResearchGlobal Passenger EV Tracker

BYD Auto is enjoying success across a diverse group of markets mainly in Asia, but it is gearing up for Europe growth with new models to be shipped into the region later this year.

伊凡Lam高级分析师、制造业、指出,“BYD has all the classic advantages of a Chinese tech company including scale and proximity to the supply chain. What makes them stand out even more is their vertical integration right through to the battery. This helps them dominate at home. And as they expand production outside China, it will also make them a serious threat to global competitors.”

“I wouldn’t be surprised if they’re able to grab a lot of share quickly because of the latent demand for affordable EVs in Europe. And a planned 2025 factory will only bolster their advantage over the long term,” muses Lam. “The maxim ‘If you can make it in China, you can make it anywhere’ really does apply here.”

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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Southeast Asia BEV Sales Grow 10x YoY in Q1 2023, Thailand Leads

泰国占超过75%的贝福在销售e SEA region during Q1 2023.
Three out of every four BEVs sold were from a Chinese automaker.
The top three groups accounted for 68% of BEV sales.
BYD’s Atto 3 was the best-selling BEV.

New Delhi,London,San Diego, Buenos Aires, Hong Kong, Beijing, Seoul –July 20, 2023

Southeast Asia’s^#(海)乘客电池电动汽车(BEV)ales* grew by almost 10 times YoY in Q1 2023, according to the latest research from Counterpoint’sSEA Passenger Electric Vehicle Model Sales Tracker. The share of BEVs in total passenger vehicle sales experienced significant growth in Q1 2023, reaching 3.8% compared to a mere 0.3% one year ago.Thailandemerged as the leading country, capturing over 75% of the BEV sales, followed byIndonesiaandVietnam.Thailandalso boasted the highest proportion of BEVs in total passenger vehicle sales, followed by Singapore and Vietnam. However, plug-in hybrid electric vehicle (PHEV) sales saw a modest YoY growth of 5.8%.

Commenting on the market dynamics,Research Analyst Abhilash Guptasaid, “Thailand’s government-led efforts to promote EV sales have yielded positive outcomes, while Indonesia and Vietnam are also performing well in the region. However, Malaysia, Philippines and Myanmar require additional regulatory support and encouragement to foster EV growth. Despite overall passenger vehicle sales remaining relatively stagnant, the sales of BEVs have experienced a significant andrapid expansion. Besides, the market for hybrid electric vehicles (HEVs) has experienced remarkable growth in SEA, playing a pivotal role in the transition from traditional internal combustion engine (ICE) vehicles to EVs.”

Gupta added, “Chineseauto groups are experiencing rapid growth and outpacing their competitors in the SEA region, with their market share increasing from 38% a year ago to nearly 75%. In Q1 2023,BYD Group成为BEV领袖海地区capturing the majority of sales, followed byHozon New Energy, andSAIC Group. These top three groups collectively accounted for over 68% of the BEV market. In the PHEV market,Geely Holding Groupclaimed the top position, followed byBMW Group, andMercedes-Benz Group.”

BYD’s Atto 3 was the best-selling BEV across SEA, followed by the Neta V and Tesla Model Y. In PHEVs, Volvo’s XC60 sold the most, followed by the BMW 3 series and Mercedes-Benz E-Class.

Commenting on the market outlook,Senior Analyst Soumen Mandalsaid, “In addition to offering subsidies and tax incentives, Thailand’s government has set ambitious goals to position itself as a global hub for EV production. The country’s EV sector has witnessed a significant rise in foreign direct investment (FDI) in the past year. Notably, several Chinese automakers, including Great Wall Motors, BYD, Hozon New Energy and Changan Automobile, have shown interest in establishing or have already commenced the construction of production facilities inThailand. Similarly,Indonesia2023年3月宣布了一项补贴计划推广te the purchase and manufacturing of EVs, with a special focus on increasing local production. This move is expected to further accelerate the production and sales of EVs in the region.”

Mandal added, “The Chinese presence in the SEA EV market is poised to strengthen as they establish regional manufacturing bases, thereby driving further growth in the EV sector. The overall sales of EVs are experiencing an upward trajectory in the SEA region. The outlook appears promising, and there is an expectation that the share of BEVs in total vehicle sales will reach6%by the end of this year.”

*Sales refer to wholesale figures, i.e. deliveries from factories by the respective brands/companies.

^#SEA here includes Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

The comprehensive and in-depth ‘Southeast Asia Passenger Electric Vehicle Model Sales Tracker, Q1 2018 – Q1 2023’ is now available for purchase atreport.www.arena-ruc.com.

Feel free to reach us at press@www.arena-ruc.com for questions regarding our latest research and insights.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Abhilash Gupta

Soumen Mandal

Abhik Mukherjee

Peter Richardson

Follow Counterpoint Research

press@www.arena-ruc.com

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One in Two Cars Sold Will Have Electric Powertrain by 2030

China will be leading the global EV market, followed by Europe and US.
BEV will have nearly 40% share in the global passenger vehicle market by 2030.
FCV will remain niche even in 2030.

New Delhi,London,San Diego, Buenos Aires, Hong Kong, Beijing, Seoul – May 30, 2022

One in two cars will have an electric powertrain by 2030, according to the latest research from Counterpoint’sPassenger Vehicle Forecast*. The increase in environmental awareness among buyers, favourable carbon emission norms, support from governments and the collaborative efforts of ecosystem players are all helping electric vehicle (EV) adoption across the world. However, EV penetration was still below 10% of global passenger vehicle sales in 2021.

Commenting on the regional dynamics,SeniorResearch AnalystSoumen Mandalsaid, “China is leading the global EV market, followed by Europe and the US. RoW (rest of world) will be the fastest growing region in terms of EV adoption, driven by Vietnam, Singapore, Thailand and Canada.

The EV market in China is influenced by government policies. However, China has reducedsubsidieson EVs by 30% in 2022 compared to 2021. Further, the rising inflation rate and supply shortages due to COVID-19 outbreaks have forced OEMs to increase EV prices. April was the weakest month for EV sales in China this year. We expect the situation to improve after COVID-19 restrictions are relaxed and OEMs resume production. The EV sales in China are projected to cross six million units by the end of this year.

Europeis aiming to reduce emission levels by 15% in 2025 and by 37.5% in 2030 from the 2021 levels. This is one of the major reasons for Europe’s EV sales to cross the two million mark in 2021, despite the COVID-19 outbreak. More than 10 countries including Norway, Denmark, France, Germany, United Kingdom and Netherlands have proposed to phase out new sales of petrol and diesel cars. This will help Europe maintain its second position in the global EV market by 2030.

EV sales in the US increased by nearly 100% YoY in 2021. The Biden government has set an ambitious target of 50% of sales being EVs by 2030. Federal and state administrations had previously taken a less supportive approach to EV adoption compared to China and Europe. The latest policy will encourage both OEMs and consumers to be more comfortable opting for EVs over traditional fuel vehicles. Moreover, the US will provide $7.5 billion to build 0.5 million public EV charging stations. We expect the battery electric vehicle (BEV) will account for nearly 30% market share in US passenger vehicle sales by 2030 – but not the half that the government has targeted.”

Other countries contributing to EV adoption include Norway, Japan andIndia. EV adoption in Norway has already crossed 85% of sales in 2021 and we expect Norway will achieve 100% electrified passenger vehicle sales by 2025. Japan, however, is lagging in EV adoption compared to other developed countries. Toyota and Renault-Nissan have recently adopted a worldwide EV policy and we expect Japan will benefit from these homegrown OEMs. India is aiming to have 30% of its passenger vehicle sales as EVs by 2030. Already, homegrown players such as Tata Motors and Mahindra Electric and a few foreign players like MG Motor and Hyundai are competing for the Indian passenger EV market.

A few years back, it was thought that fuel cellvehicles(FCVs) would be one of the key technologies for the automotive market. However, FCV penetration hasn’t increased much and only a few players such as Hyundai, Toyota, Honda and SAIC are offering FCVs. Commenting on the competitive dynamics,Associate DirectorBrady Wangsaid, “The EV market is getting more competitive as new companies, including smartphone ecosystem players, are entering the field. Companies such asFoxconnandXiaomihave already announced their entry into the smart electric car field to diversify business opportunities. Sony has partnered with Honda to produce affordable EVs.

Teslais also a relatively new entrant. It introduced the groundbreaking Model S around 10 years ago and now dominates the global EV market. New start-ups likeNio, Li Auto, Xpeng, Lucid Motor, Fisker and Rivian are also trying to followTesla’s wheel tracks and disrupt traditional auto OEMs, many of which hesitated to invest in EV development in the initial phase. As next-gen cars will be much more software-driven, we will likely see more new players entering the market. However, the traditional players will still have an advantage thanks to their scale of manufacturing and well-established supply chains. Nevertheless, we expect a fierce battle between traditional and newer players in the coming years as EVs become increasingly mainstream.”

Commenting on EV infrastructure developments,Research VPPeter Richardsonsaid, “Increased EV adoption will not, by itself, contribute to the goal of reducing overall vehicular pollution. While increased EV sales are positive, we also need to focus on setting up smart production ramps, more efficient battery manufacturing processes, battery recycling plants and charging infrastructure powered by renewable energy sources like solar, wind, hydro and nuclear. Unless we also adopt clean energy sources, the vision of attaining net-zero carbon emission will remain out of reach.”

In the initial years of EV adoption, there was a chicken-egg dilemma between governments andOEMs. Now, both parties are making collaborative efforts to make the transportation industry greener and more environmentally sustainable, helping smooth the transition from traditional fuel vehicles.

*Under electric vehicles, we are considering only battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and fuel cell vehicles (FCVs). Hybrid electric vehicles are not included in this study.

The comprehensive and in-depth ‘Global Passenger Vehicle Forecast, 2018-2030F’ is now available for purchase atreport.www.arena-ruc.com. Feel free to reach out to us at press@www.arena-ruc.com for questions regarding our latest research and insights.

Background

Analyst Contacts:

Soumen Mandal

Peter Richardson

Brady Wang

Counterpoint Research

press@www.arena-ruc.com

Related Reports:

Global Passenger Electric Vehicle Sales Fall 8% in Q3 2019

The top three brands, Tesla, BAIC Group and BYD Auto accounted for 40% of total EV sales during Q3 2019.
Subsidy reductions in China continued to adversely affect sales.
EV Sales declined in China and the US, but Europe experienced high growth.

The global passengerelectric vehicle(EV)* sales have fluctuated during 2019. They reached a high point in the second quarter but fell back in Q3 to 480 thousand units – down 21% sequentially and 8% annually. When compared to Q3 2018, the EV sales increased in key European countries including Germany, UK, France, and Sweden, but declined in China and the US.Tesla, BAIC Group,BMWand Hyundai performed well, increasing their global EV market share after declining sales of EVs. But many Chinese brands lost market share due todifficult conditionsin their domestic market.

Exhibit 1: Global Passenger Electric Vehicle Market Share by Brand (%) – Q3 2019

Commenting on the market dynamics,Soumen Mandal, Research Associate, said, “Reduced incentives and economic uncertainty in China heavily affected EV sales during the quarter. The latest subsidy cut in the country began in June when the government reduced the EV subsidy by 50%, adversely affecting sales during Q3 2019. Moreover, pressure on automakers to upgrade their technology to meet national standards reduced the number of new vehicles launches, which had a further effect of cooling demand. China is planning to cut subsidies completely from 2020 for new EV purchases will see slower growth in the next few years. Reduced subsidies are impacting local Chinese manufacturers, such as BYD, which has already seen deep cuts in its sales volume in 2019. A more measured reduction in subsidies would help the EV market in China adapt to the new pricing situation more easily.”

The top five EV model accounted for one-third of total sales in Q3 2019. Tesla improved its delivery capability around the world, with the Model 3 performing well in the Europe and US markets. Two out of the top five EV model are from the Chinese brands. BYD Yuan andSAICRoewe Ei5 models were victims of subsidy cut which led them to slip from top 5 EV models in Q3 2019, despite these models providing good specifications.

Exhibit 2: Top 5 Electric Vehicle Models during Q3 2019

Commenting on the brands’ performance,Senior Analyst, Aman Madhok, noted, “Increasing overseas sales helped Tesla to increase its market share in the global EV market. The company is focusing on further increasing its foothold in Europe and China by setting-up newbatterymanufacturing plants in Berlin and Shanghai.”

Aman adds, “Following the reductions in local subsidies by the Chinese government, the big Chinese brands are looking to expand in global markets to improve their scale. Lower priced Chinese EVs are expected to do well in developing countries, but they face challenges in terms ofsafety, in-car experience and brand perception. Without an improvement in the China market situation, Chinese EV makers will likely face consolidation.”

Key Takeaways:

Tesla sales grew 19% YoY, reaching 97,000 units, taking 20% of global EV sales. A 40% YoY increase in Model 3 sales due to strong overseas expansion drove Tesla’s performance.
BAIC Group(尽管同比增长了50%,达到47000台slowing China market) due to a better performance of the upgraded Senova, EU and EX series.
BYDEV sales were down by 30% YoY globally, reaching 45,000 units due to the revised New Energy Vehicle (NEV) policy in China.
China is the largest EV market, accounting for 48% of global sales in Q3 2019. But new EV sales decreased by 16% YoY.

*Definitions

The report includes pure electric vehicles (also known asbatteryelectric vehicles – BEVs) and plug-in hybrid electric vehicles (PHEVs). Hybrid electric vehicles (HEVs) are not included in the study.

Counterpoint Research tracks model-level EV sales in 55 countries worldwide.

Analyst Contacts:

Aman Madhok
+91 9560384548
aman@www.arena-ruc.com

@madhokaman