Chinese EV makers defy industry slump as price cuts boost sales
Overall auto sales projected to fall about 5% due to the week-long Labour Day holiday
Price cuts and new models helped Chinese electric vehicle makers, including BYD Co. and Nio Inc., continue to grow sales in May even as the overall market for passenger cars is expected to see deliveries shrink, industry data showed.
Seres Group Co., which works with Huawei Technologies Co. to make the popular Aito EVs, led the pack by delivering 34,100 cars in May, almost triple the amount from the same time last year. This was followed by Nio, with a 234% increase in units sold, and Zeekr Intelligent Technology Holding Ltd., which posted 115% growth in May sales.
BYD, the country's best-selling brand, sold 330,488 passenger vehicles in May, an increase of just over a quarter compared with last year. The pace is slowing from last year, when BYD saw almost 100% growth.
The continued growth comes as Chinese EV producers face mounting challenges at home and abroad. With the slowing demand for battery-powered vehicles driving up competition, EV makers are discounting and speeding up the launch of new models. BYD intensified the price war by cutting the prices of many popular models in February which led others to follow.
Meanwhile, access to new overseas markets where manufacturers can charge higher prices is being threatened by trade actions such as potential tariff hikes in the European Union, and in the US, which imposed an import tax of more than 100% on Chinese EVs.
Still, sales at home are seen offering some comfort with EVs and plug-in hybrids expected to grow 33% to 770,000 vehicles in May against a decline of 5.3% for overall deliveries including gasoline cars, preliminary data from the China Passenger Car Association show. The decline is likely due to the week-long Labor Day holiday falling entirely within May this year, the association noted.