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China Plug-in Vehicle Sales for the 1st Half of 2018

China keeps impressing the industry and its observers with an amazing uptake of Plug-ins, or New Energy Vehicles, NEVs, as they are called in China. NEV deliveries for the first half of 2018 were clearly above the past 2 years growth rates:  Nearly 373 000 plug-in passenger cars, including 15 000 imports, were delivered in January thru June. This is 114 % more than for the same period of last year.

On top of that come 49 000 commercial vehicles, so far, mostly LCV and electric buses, 60 % more than 2017 1-6. China is, by far, the worlds largest market for Plug-ins. 50 % of global plug-in volume was sold in China, for 2018, counting passenger cars only. For electric commercial vehicles, 70 % of the global volume is in China and exports of electric buses from China to other markets are significant.

In May, the NEV share reached a new high with 4,8 % in a total monthly passenger car market of nearly 2 million units. Keen to raise the standard of the Chinese EV industry, the Government introduced new requirements to receive NEV subsidies in June: a minimum 150 km e-range for BEVs and a specific battery capacity of 105 W/kg. This has slowed down the pace considerably as some popular BEV models did not comply and stopped selling. June growth was reduced to 80 % and preliminary results for July show a 61 % y-o-y increase. We expect this trend to continue during the 2nd half, until best-sellers like the BAIC EC-Series are back on track again.

Despite the slow-down, we expect NEV sales in China to reach 1,1 million passenger cars this year, up 83 % from 2017. In addition we expect 275 000 commercial vehicles the be delivered in 2018. For passenger cars we expect the NEV share to reach over 6 % in December and 4,2 % for the complete year. Back in 2016, the Chinese Government set NEV targets for 2020: 6 % share in vehicle sales and 5 million NEVs on the road. With the current adoption rate, these targets, considered highly ambitious in international comparison back then, will be surpassed by a good margin.

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Over 1 million deliveries this year

China is, by far, the largest market for Plug-Ins. 2018 NEV passenger car sales thru June were 373 000 units, 3 times higher than in USA, the #2 in the country ranking.  With 96 % of sales from domestic OEMs, China is also the largest producer of Plug-ins. Since the boom started in 2015,  y-o-y growth has been accelerating, +65 % to 2016, +72 % to 2017 and the expected +83 % to 2018.

This year, we expect NEV sales to reach 1100 000 units, counting passenger cars, 74 % of them BEVs and 26 % Plug-in Hybrids (PHEV). In a total market forecasted to reach 26,3 million passenger cars (+2,2 % vs 2017), this means 4,2 % NEV share.

Our detailed, regular reporting is for the passenger car market. In addition, 49 000 commercial vehicles were sold in the NEV category in 2018 H1. For 2018 we expect this number to reach 275 000 units, half of them large buses, most of them fully electric. For electric busses, 98 % of world sales are in China, today. The domestic sales leader is Yutong, the export leader is BYD. We are maintaining a database for worldwide electric commercial vehicle sales. Contact us for more details.

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⅔ rd of volume in the second half

The monthly share development helps to explain the forecast: Only ⅓rd of Chinas NEV sales are during the first half of the year. The first quarter is usually hampered by pending approvals and subsidy paperwork. Is takes until April for shares to connect to the endpoint of the previous year.

This year had a good start and a new share record for NEVs was set already in May. The May result contains a good amount of sales brought forward from models which lost their subsidies in June (the aforementioned tougher requirements on battery capacity). Among them the worlds best selling EV, the BAIC EC series. This put a 15-20k dent into June sales, which is likely to continue into Q3 and parts of Q4.

Still, unless shares and growth completely depart from the usual seasonality, we can expect 1,1 million NEV sales when 2018 is closed. The December share can be as high as 6,5 %, which is twice as high than for other larger economies with total vehicle markets of 1 million and more.


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