According to industry data released on Thursday by the China Passenger Car Association (CPCA), passenger vehicle sales in China experienced a 7.3% increase in May compared to the previous
month. The Chinese government extended tax incentives to stimulate demand and support the country's faltering economic recovery.
In May, total sales reached 1.76 million vehicles, with sales for the January-May period up 4% compared to the same period last year, amounting to 7.74 million cars.
The data from CPCA also revealed that sales of new energy vehicles (NEVs), including battery-powered cars and plug-in petrol-electric hybrids, saw a 10.5% growth in May compared to April. NEVs accounted for 32.9% of total vehicle sales in May.
Tesla, a prominent player in the NEV market, sold 77,695 China-made vehicles in May. However, the industry data did not provide a breakdown of export figures by specific auto brands.
Although the prices of NEVs have been on a downward trend due to discounts and declining battery costs, Tesla's recent move to increase prices in various countries, including China, has yet to reverse this trend. Nevertheless, NEV sales, which reflect significant consumer spending, have shown a modest rebound in line with the gradual recovery of consumption after China lifted COVID-19 containment measures toward the end of last year.
The sluggish recovery in auto sales has put pressure on profitability. Some suppliers to state-owned Chongqing Changan Automobile Co Ltd have protested against a payment reduction by the automaker, claiming that they are being forced to bear the burden of price drops, as reported by Reuters.
To further support NEV purchases and promote the development of NEVs, the Chinese government is planning to extend and optimize tax incentives, according to state media reports citing cabinet discussions. The discussions emphasized that the foundation of economic recovery is not yet solid.
In mid-May, the National Development and Reform Commission and National Energy Administration issued guidelines aimed at accelerating the construction of electric vehicle charging facilities, particularly in rural areas, to encourage NEV purchases. Photo by Navigator84, Wikimedia commons.
