China Plug-in Sales 2016 Q4 and Full Year

The year finished with 351 000 Plug-in passenger cars delivered, which makes China by far the largest market for Plug-ins (or New Energy Vehicles, NEV, as they are called in China). The increase over 2015 was 85 %, which is much less than in previous years, but more than in any other of the large economies. Share in Passenger Car sales was 1,45 % for the year, which is still  far cry from leading Norway (24 %), but best among all larger car markets with total sales above 1 million, Chinas PEV share is similar to France and UK for 2016. The overall passenger car market in China increased by 15 % of 24,3 million units in 2016.

July was the first month when NEVs share passed the 2 % mark in total passenger vehicle sales. Our expectations that this trend continues throughout the year were not fulfilled. December, usually the grand final for Plug-in sales, was particularly disappointing. More stringent requirements for local subsidies and more controls to avoid bogus registrations were part of the story.

From 2017 onwards, central NEV subsidies are reduced by 20 %, Local subsidies by 50-60 %. Some of the support is redirected to the availability of better batteries. Beyond 2017, the Government has expressed ambitious targets for production, market shares and technical content of NEVs, which also will affect importers of regular vehicles.  ZEV targets (like in California) and trading of emission certificates are other proposals. The deck is being reshuffled and the NEV market in China is going to stay interesting, to say the least.