The Zhitong Finance App learned that on November 27, Cui Dongshu, Secretary General of the Passenger Transport Federation, published an article stating that the NEV market became seasonally stronger in October, domestic retail sales rose slightly from September, and exports continued to grow strongly. Consumption upgrades and swaps are growing rapidly, so in October the NEV market was strong, driving strong growth in the plug-in mix. In January-October, new energy passenger vehicles achieved strong positive growth of 35%, which is also a good performance that exceeded expectations.

1.October NEV wholesale was strong

In October, the wholesale sales volume of new energy passenger vehicles reached 880,000 units, up 30% year on year and 6% month on month. Since this year, a total of 6.8 million vehicles have been sold, an increase of 35% over the previous year.

In January-October, the wholesale sales volume of new energy passenger vehicles reached 6.8 million units, an increase of 35% over the previous year. Since this year, there has been a downward trend in power battery prices due to the decline in raw materials such as lithium and nickel, which is beneficial for enterprises to cut production at the beginning of the year, remove historical inventories, and achieve a strong increase in new products.

In January-October, sales in China were strong, reflecting good demand for new energy, and there is still potential for growth in the future.

Strong retail sales growth rate for new energy vehicles in 2.10

In October, the NEV market sold 770,000 units, up 38% year on year and 3% month on month.

Since this year, a total of 5.97 million vehicles have been sold, an increase of 35% over the previous year. The trend of new energy vehicles in October was relatively stable, and the inhibitory effect brought about by the fuel vehicle promotion wave was not strong.

Strong growth rate of new energy vehicle exports in March

In October, 112,000 new energy passenger vehicles were exported, up 8% year on year, up 23% from September, and accounted for 28.6% of passenger car exports. This is very good in the face of low exports of Tesla at the end of the quarter. New energy product brands made in China are increasingly going abroad. Due to the continuous increase in overseas recognition and the improvement of service networks, they mainly target markets in developed countries, so the market prospects are improving.

In January-October, a total of 850,000 units were exported, an increase of 0.9 times over the previous year. Judging from the monitoring of retail sales data in overseas markets for independent exports, SAIC Motor and other independent brands have performed well in Europe. In addition to the impressive performance of traditional car exporters, exports from new forces have also been gradually launched recently, and data from overseas markets is also beginning to show. The low base in October boosted exports, and NEV exports are expected to continue to grow at a high level over the next few months.

4. Characteristics of the use of new energy passenger vehicles

In 2018-2019, the share of new energy passenger vehicles in the rental category gradually increased, and since then, the share of pure electric rental leases that began in 2020 has continued to decline. This year's market demand is gradually strengthening towards private consumption. The share of rental leases in October 2023 was 7.9%, which is lower than at the beginning of the year.

Recently, the share of plug-in hybrid in the private market has also continued to rise. Demand for plug-in leasing continues to decline, and pure electric power is still the best choice for leasing. The proportion of pure electric rental leases declined markedly in October.

5. The performance of regional markets is gradually improving

Demand for new energy passenger vehicles was strong in the past few years, mainly in megacities with purchase restrictions, and has continued to decline recently. Excluding purchase restrictions in megacities, new energy passenger vehicles accounted for 31.2% of total sales in major cities in 2023, down 1.3 percentage points from 2022. This also shows that sales in the NEV market in major cities are gradually slowing down, and the basic population size limits demand. Due to the large population base and poor public transportation, demand in the medium-sized city market has been strong recently, and new energy is gradually being launched in the county and township markets.

Regardless of the special factors of purchase restrictions in megacities, the growth of the car market is mainly in medium-sized cities, counties, and townships.

Compared to the gradual expansion of fuel vehicles to lower county-level markets, the pace of new energy vehicles is faster. In particular, the share of new energy vehicle sales in large cities that are not restricted in purchasing has reached a high share. The hybrid models in the county and township markets are also gradually expanding, and there is great potential for the future.

6. The performance of the new energy city market is gradually improving

The main drivers of new energy vehicle growth in October were also core cities with no purchase restrictions, such as Zhengzhou, Xi'an, and Wuhan. Market regions such as Hangzhou and Shanghai have declined.

Compared with the same period in 2022, new energy vehicles in 2023 will still increase significantly. Shanghai, Guangzhou, Chengdu, Hangzhou, and Zhengzhou are all growing relatively rapidly, forming the core driving force for growth.

The Chengdu market is also a characteristic environment where new energy vehicles are showing high growth. Products with high value and low cost of use have great potential in the southwest region. The performance of Wuhu, Foshan, etc. was relatively poor, and there was no incremental contribution.

7. Differences in regional demand for electric vehicles

The gradual launch of the pure electric private household market is driving the development of the industry. Although demand from large cities with purchase restrictions is very strong this year, their share has gradually declined. The market share of large and medium-sized cities with travel restrictions has continued to rise, and the private consumption market in small cities, counties, and townships has been recovering more slowly.

The current performance of the pure electric vehicle rental market is gradually declining. Rental leasing accounted for a peak in sales of pure electric vehicles in 2019, then the share of rental leasing declined in 2020, then fell to about 15% in 2021-2022, and remained at 15% in October 2023. Among them, the share of cities with purchase restrictions declined markedly.

Recently, the share of rental cars in medium-sized cities and counties and townships has risen, and the private market in medium-sized cities is still rising rapidly. The rental market in major cities without purchase restrictions was quite large this year.

Judging from the performance of the main models, it also reflects the improvement in the performance of the main models in large and medium-sized cities. In particular, the increase in share represented by BYD in October was an increase of 1-2 percentage points in the mid-size market compared to the same period. Judging from Tesla's perspective, the main regions in October extended even further to the small to medium city markets compared to the same period, and the pure electric market growth in megacities was relatively good.

8. Regional demand for hybrid passenger cars

There is great potential for growth in the private consumer market for plug-in hybrid models, and there is good demand in the small to medium city markets.

The share of plug-in hybrid models per unit car and rental continues to shrink. The main demand for plug-in and hybrid rental models is in megacities and large urban markets. This year, hybrid rental in megacities has shrunk sharply.

In recent years, the share of plug-in hybrids in cities that are not restricted in purchasing has gradually increased, and BYD and Ideal are relatively strong. The Ideal L7 had a strong performance in October, surpassing some established star models.

In October, the mix of plug-ins strengthened. Large and medium-sized non-restricted purchase cities were still the main force for plug-ins. The share of demand in cities with restricted purchases declined, and the mixing of county and township markets gave a good impetus.

Dependence on purchase-restricted cities such as BYD and Han has declined, and low-priced cities such as Qin and Song have shown strong performance in small and medium-sized cities.

9. Regional penetration rate of pure electric passenger cars - October

Currently, the share of pure electric vehicles in cities with purchase restrictions has increased dramatically, from 14% in October 2020 to 32% in 2023.

The sales volume of new energy vehicles in large cities, medium-sized cities, and small cities that are not restricted from purchasing is basically the same. Both 2019 and 2020 were at a low level. This year, medium-sized cities rose to 24% in October, and the increase in the penetration rate of county and township markets was also strong.

The market penetration rate of plug-in mixing in all parts of the country continues to grow, especially in very large cities. In October of this year, the share of the plug-in hybrid market reached 13%; the share of the plug-in market in the small and medium-sized city market also showed characteristics of continuous improvement, and the gap in the penetration rate of the plug-in and mixing rate between various cities was relatively narrow.

Driven by the mixed license policy in Shanghai, the share of plug-and-mix in October was 5%, which is a significant decline.

10. Companies in regional markets are highly differentiated

The performance of the rental market in various regions is relatively highly differentiated. The rental markets that performed well in October this year were Guangdong, Zhejiang, Jiangsu, etc. Among them, the performance of various manufacturers in the local rental market also varies greatly, and the share of local products in some regions in the local rental market is not necessarily very high.

The characteristics of the private pure electric market are relatively obvious, and the high-end trend is extremely obvious. BYD has performed well; developed regions such as Guangdong, Jiangsu, and Zhejiang are basically number one.

New car builders, NIO Auto and Xiaopeng Motors, all performed very well, while traditional car builders also performed well in the private electric vehicle market.

BYD and Ideal Auto performed well in the private mixed market. In particular, BYD's main cities took the lead overall, and Ideal Auto ranked second overall. Chang'an and the Great Wall are also trending strongly.

Since the plug-in market outside of BYD is mainly increasing programs, the private plug-in performance of joint ventures car companies is relatively weak.

11. Market trends in Beijing

The trend of the new energy vehicle market in the Beijing market in 2022 was relatively stable. The sales volume reached 17,000 units in October 2023, which is at a high level in the same period of the previous year, and license plate indicators have been fully digested. The cumulative sales volume increased 30% year over year in 2023, and the performance was relatively good.

Since the 2018 NEV indicators were relatively tight, the new energy vehicle market in Beijing in 2022 is in contrast to the national trend. Currently, the growth rate is low. Some users who bought cars in 2018 should switch cars, but the total market volume is still not high. This is an effect of suppressing consumption brought about by the pace of index distribution.

Beijing's new energy sales in June-October last year were relatively good. Considering the lack of indicators and Tesla's car supply, Beijing's performance in October was also quite strong. The overall level of new energy vehicles in Beijing is pragmatic, which is also a good reflection of household demand.

12. Trends in the new energy market in Shanghai

There is a clear contrast between the new policy trend in the Shanghai market and the Beijing market. The trend has been extremely stable since 2019. The year-end buying market began in October 2020. Sales in October this year declined significantly, and Shanghai's new energy vehicle growth was characterized by a slowdown in growth.

13. Trends in the NEV passenger car market in cities with restricted travel

The performance of new energy vehicles in cities with restricted travel is relatively strong. In October 2023, it reached the level of 170,000 units, and the year-on-year growth rate reached a good level of 61%.

The cumulative sales volume of new energy vehicles in 2023 reached the level of 1.42 million, an increase of 41% over the previous year. It is far higher than our overall car market growth, and also higher than our overall average growth rate of new energy vehicles, reflecting the relatively high enthusiasm for purchasing new energy vehicles in cities with restricted travel.

14. Trends in the NEV passenger car market in regions with unlimited purchases

A city that is not restricted to double limits is also an area where our fuel vehicles are not restricted for purchase or travel. Since the purchase and travel of traditional vehicles is not limited, the demand for new energy vehicles in these cities is the real market demand. At present, non-double limit cities are also growing extremely rapidly. Such cities cover a relatively large area of the country, and sales of new energy vehicles are currently at a relatively high level.

In 2022, the total number of non-bounded cities reached the level of 2.74 million units, an increase of 96% over the previous year, showing strong growth characteristics. In 2023, the performance of new energy vehicles in non-dual cities was excellent, with sales of 430,000 units increasing by 81% in October.

Cities with no restrictions on purchases and travel restrictions, which were feared earlier, have become the main force in sales and growth, and all regions of the country are characterized by strong demand growth for new energy vehicles. Combined with the demand from restricted cities, demand in the regional market will maintain strong growth in 2023.