New Energy Vehicles: "Golden Cross" Followed by Million-Unit Sales

In July, China's new energy vehicles reached a pivotal milestone, with the monthly penetration rate surpassing 50% for the first time—a threshold that signifies the proportion of new energy vehicles in overall passenger car sales has exceeded that of traditional fuel vehicles for the first time, marking a "golden cross" moment in the history of new energy development.

This momentum continued into August. The China Automobile Dealers Association's Passenger Car Market Information Joint Conference estimated that in August, the sales of new energy vehicles would break the 1 million mark for the first time this year, propelling the industry to a higher level.

How did new energy vehicle manufacturers perform in terms of sales in August? What new changes have emerged?

The penetration rate of new energy vehicles is expected to remain above 50%.

According to the Passenger Car Association, in August 2024, the national new energy passenger car market is expected to see a significant increase, with the wholesale sales volume projected to jump to 1.05 million units, a year-on-year increase of 32% and a month-on-month increase of 11%.

Cui Dongshu, Secretary-General of the Passenger Car Association, stated that some small and medium-sized vehicle manufacturers performed strongly in August, and it is estimated that the penetration rate of new energy vehicles will continue to stabilize above 50%.

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In August, BYD remained the best-performing vehicle manufacturer in terms of sales, having broken the 300,000-unit monthly sales mark for the sixth consecutive month. Its new energy vehicle sales amounted to approximately 373,100 units, a year-on-year increase of 35.97%, and a month-on-month increase of 9%, setting a historical record.

At the same time, BYD also released its interim financial report for August, showing that the company achieved a total operating revenue of 301.127 billion yuan, a year-on-year increase of 15.76%; net profit was 13.631 billion yuan, a year-on-year increase of 24.44%. This represents a significant improvement in both gross margin and net profit.

Apart from BYD, the sales champion among the new force brands remains Li Auto. In August, Li Auto delivered 48,122 new vehicles, a year-on-year increase of 37.8%.Car manufacturers in the 30,000-unit sales range include Seres, GAC Aion, and Leapmotor. Seres achieved a sales volume of 36,181 units in August, a significant year-on-year increase of 479.55%. Among them, the Enovate brand series sold 34,242 units, with a staggering year-on-year growth of 949.40%; GAC Aion's sales volume was 35,355 units; Leapmotor set a new historical high with a delivery volume of 30,305 units, with a year-on-year increase of over 113%, becoming the third new force car manufacturer to break through 30,000 monthly sales.

In the 10,000-20,000 unit sales range, new forces such as NIO, XPeng, and Xiaomi are on the list. NIO delivered 20,176 new vehicles in August, surpassing 20,000 units for four consecutive months; XPeng Motors delivered 14,036 units in August, a 3% year-on-year increase and a 26% month-on-month increase. Xiaomi's SU7 model has broken through 10,000 units for three consecutive months, and it is expected to achieve the annual delivery target of 100,000 units ahead of schedule in November.

It is worth noting that Geely Galaxy and Deep Blue Automobile have entered the 20,000-unit monthly sales level for the first time. Geely Galaxy sold 26,510 new vehicles in August, with a month-on-month growth of about 59% and a year-on-year growth of over 138%; Deep Blue Automobile sold 20,131 new vehicles in August, with a 37% year-on-year increase, setting a new monthly sales record.

Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology, said in an interview with China News Service's National Express that the polarization in the automotive market further intensified in August, with leading companies like BYD continuing to maintain a strong position. The strategic cooperation between Leapmotor and the European Stellantis Group has helped it open up the European market, with some sales growth coming from exports. The significant sales growth of Deep Blue Automobile is attributed to its unique design, high cost-performance ratio, and cooperation with Huawei to carry the HarmonyOS system, which has increased its technological content and thus promoted sales growth.

What positive news emerged in August?

In August, there were also many favorable policies in the field of new energy vehicles.

Firstly, on August 16, seven departments including the Ministry of Commerce issued the "Notice on Further Doing a Good Job in the Replacement of Old Cars with New Ones." According to the notice, for individual consumers who scrap old cars and purchase new ones in accordance with the "Implementation Rules for the Subsidy of the Replacement of Old Cars with New Ones," the subsidy standards have been increased from 10,000 yuan for purchasing new energy passenger cars and 7,000 yuan for purchasing fuel passenger cars to 20,000 yuan and 15,000 yuan, respectively.

Zhang Xiang believes that with the increased intensity of the old-for-new policy, the promotion of new energy vehicles to rural areas, and the promotion of automotive financial policies, the sales volume of new energy vehicles is expected to continue to grow. In addition, the advantages of new energy vehicles in terms of price, exemption from purchase tax, green license plate policy, and charging costs have further driven market demand.

Secondly, the annual inspection of new energy vehicles will be implemented starting from March 1, 2025. On August 25, the national standard "Inspection Regulations for the Safety Performance of New Energy Vehicles in Operation" (hereinafter referred to as the "Regulations"), drafted by five units including the Traffic Management Science Research Institute of the Ministry of Public Security, was officially released.

The "Regulations" also mention that this is the first safety inspection standard specifically for new energy vehicles in China, where the safety inspection of power batteries will become a mandatory item, and the safety characteristics of the drive motor, electric control system, and electrical safety will also be adjusted for inspection.Zhang Xiang believes that it is very necessary to establish annual inspection standards specifically for new energy vehicles. Not only can it more effectively detect potential safety hazards and prevent accidents such as spontaneous combustion, explosion, or loss of control, but having separate inspection standards will also make the inspection process more scientific, further ensuring vehicle safety.

Car blogger "Lao Guo Mechanism Bureau" Guo Yining, in an interview with China News Service's Guo Shi Zhi Tong Che, stated that new energy vehicles are the trend of the times, so the annual inspection policy will not have a significant impact on consumer enthusiasm for purchasing cars, and it is expected not to significantly affect the sales volume of new energy vehicles. Although the "three electric systems" of electric vehicles are relatively stable, it is still necessary to conduct annual inspections for battery performance.

"Many car companies promise lifetime warranty for batteries when selling cars, but there are disputes over the specific warranty standards and inspection methods. Therefore, it is necessary to introduce third-party organizations to conduct more impartial inspections to ensure that the rights and interests of car owners are protected," said Guo Yining.

In addition, on August 21, 2024, the Ministry of Industry and Information Technology released a public solicitation for comments on two mandatory national standards, "Passenger Car Fuel Consumption Evaluation Methods and Indicators."

The main technical changes in this revision are mainly to update the energy consumption limit requirements for passenger car models. By raising the threshold requirements for energy consumption, it will effectively reduce the level of energy consumption of car models, curb the development trend of vehicle enlargement, and prevent a rebound in the overall average energy consumption level.

In Guo Yining's view, once the policy is determined and implemented, there will be a very large growth space for the plug-in hybrid market in the future, while the market share of fuel vehicles will further shrink. Although the sales volume of pure electric vehicles will increase with the popularization of plug-in hybrid models, the increase will not be too significant.

"Golden September and Silver October" sales are expected to reach a new high.

"Golden September and Silver October" have arrived, and September, as the golden car-buying season in the fall, with suitable climate and increased travel demand, has driven market enthusiasm. Major car companies will also accelerate the launch of new models, optimize promotional strategies, and strive to compete for market share.

At present, the Chengdu Auto Show is being held. This year's Chengdu Auto Show has unveiled 73 new models, including 27 global debuts and 38 national debuts.

This year's Chengdu Auto Show has specially set up a "special pavilion" for new energy vehicles, attracting more than ten new energy vehicle brands to participate. China News Service reporter Liu Zhongjun took the photo.Donghai Securities believes that as the "Golden September and Silver October" approaches, the sales volume and penetration rate of new energy vehicles are expected to reach new highs. It is anticipated that by the end of 2024, the annual sales of new energy vehicles will reach 11.5 million units, representing a year-on-year increase of 20%.

Zhang Xiang believes that in September, major car manufacturers will leverage platforms such as the Chengdu Auto Show to launch new models and attract consumer attention through the widespread adoption of autonomous driving technology. At the same time, price competition remains the "main theme" for the second half of this year, with large car manufacturers using price reductions to phase out smaller ones, promoting industry consolidation, and increasing industry concentration. It is expected that the number of car manufacturers in China's automotive industry will be significantly reduced in the future, leading to a more concentrated market landscape.