BYD chairman expects China's NEV penetration to exceed 50% within next 3 months

A month ago, BYD chairman and president Wang Chuanfu predicted that China could see monthly new energy vehicle (NEV) penetration exceed 50% within this year.

China has the highest NEV penetration rate in the world for a major economy. BYD has been agressively cutting prices of NEVs since the start of the year to spur customers to buy NEVs instead of ICE cars.

Now, he expects that significant milestone to be seen within the next three months.

"The penetration rate of NEVs crossed 48.2% last week, and if it continues at this rate, I estimate that the penetration could cross 50% in the next three months," Wang said in a speech at the China EV 100 Forum in Beijing.

That penetration rate could even be higher in the next three months, meaning NEVs will dominate the market, Wang said.

China saw monthly NEV penetration rate exceeded 40% in 2023 and the figure was expected to exceed 50% this year, Wang said Feb 18 at a conference held by the Guangdong provincial government.

In China, NEVs include battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs). About half of BYD's monthly sales are BEVs and the other half are PHEVs.

With the current opportunities and challenges, players in China's NEV industry need to embrace change and stick to the right strategic direction, he said in his speech today.

NEVs are an irreversible trend, and new things see market change faster and more efficiently in China than abroad, he said.

In 2023, global sales of new energy passenger vehicles exceeded 13 million units, with an overall penetration rate of about 18%, Wang noted.

Last year, China's domestic sales of new energy passenger vehicles were roughly 7.88 million units, with an overall penetration rate of more than 35%, he said.

Along with enhanced R&D efforts for NEVs, the number of new models entering the market is rising rapidly, he said, adding that China's NEV transformation continues to advance and is breaking through the tipping point of iteration.

If China's NEV penetration rises from 35% last year to 45% for the whole of this year, that would mean an additional 2 million NEV sales, Wang said.

At the same time, overall sales could see significant growth as exports of NEVs increase, he said.

Wang also noted that the market competition is getting tougher, and the NEV industry is entering a stage of tough elimination for the weak.

On the one hand, China's automotive industry, after 70 years of development, has entered a structural adjustment, and looking around the world, it is inevitable that industry concentration will increase, he said.

On the other hand, China's NEV industry has gone through 20 years of development and has entered a cyclical adjustment stage, and players need to gain scale effect and brand advantage as soon as possible, he said.