Plug-in vehicles maintain 35% share of Chinese new-car market in May 

20 July 2023

may

Plug-in vehicles, made up of battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs), are enjoying continued popularity in China. José Pontes, data director at EV-volumes.com, examines the electric market trends in May.

The Chinese new-car market recorded over 600,000 plug-in vehicle registrations in May, up 54% year on year. In total, the country has seen over 2.5 million units take to the roads in the first five months of 2023.

In terms of market share, plug-in vehicles captured 35% of the Chinese new-car market, with BEVs alone accounting for 24% of the country’s registrations. Considering the current growth rate, China’s plug-in vehicle market share can be expected to hit over 40% by the end of 2023. The importance of this market becomes even clearer when considering global figures. China alone represented around 60% of global plug-in registrations in May.

Electrification by category

Looking at China’s overall best-selling models in May, plug-ins populated six of the top 10 positions and five of the top six places. Only the internal-combustion engine (ICE) Nissan Sylphy broke the domination of the electric powertrain at the top end of the table.

Examining registration performance by category, some segments still require an electric boost. City cars (A-segment), subcompacts models (B-segment), and midsize vehicles (D-segment) are heavily electrified. But compacts (C-segment) and full-size (E-segment) models still have a way to go.

The E-segment is a primary example. Premium German models continue to dominate this market, even though these models are essentially ICE-based. In the case of Mercedes-Benz, the EQE is struggling to reach 1,000 registrations a month, but the E-Class continues to surpass the five-digit mark every month.

May’s best sellers

Thanks to a recent refresh and a price cut, the BYD Qin Plus has been rejuvenated, sending its sales upwards and allowing it to take the best-seller spot in May. The midsize model reached 42,887 registrations in the month, with the BEV version alone recording 10,816 registrations.

With prices starting at ¥100,000 (approximately €13,000), demand is strong again, despite internal competition from the BYD Seal and the Destroyer 05. BYD’s lower-priced midsize sedan can be expected to continue posting strong results, at the cost of its pricier siblings. It should have no problem keeping its most direct competitors, the Tesla Model 3 and GAC Aion S, at a safe distance.

BYD’s midsize SUV, the Song, came second in the month with 37,610 registrations. The model’s only internal competition at present is the recently introduced Frigate 07 PHEV, but the upcoming Sea Lion and Denza N7 are both scheduled to arrive this year. This could prove to be too much competition inside BYD’s midsize SUV portfolio. The Song is BYD’s lower-priced model, the Frigate 07 and Sea Lion, exist at the mid-price point, and the Denza N7 is the brand’s upmarket offering.

Additionally, the current wave of price cuts, which is washing through the local market, will be a decisive factor. BYD has just reduced the price of the Song, as it did with the Qin Plus, but it remains to be seen if this will be enough. The Song must continue to clock over 40,000 registrations a month to maintain the lead in the competitive Chinese market.

The Tesla Model Y reached 31,054 registrations, which is a positive result, considering May was an off-peak month for the brand. Tesla usually sees higher registration figures and the end of each quarter. Recent price cuts appear to have produced positive results for the US crossover, with the midsize model keeping up with the best of the BYD pack.

To compensate for the peaks and valleys Tesla experiences between each month, the Model Y’s results can be examined on an average quarterly basis. Within this window, the BEV reached a 31,500 unit-a-month average, which is a great result for a foreign model in China. With domestic carmakers in peak form, Tesla is currently the only foreign manufacturer able to follow the rapid local pace.

The small-to-compact BYD Dolphin recorded 30,441 registrations in May. Previously, the Dolphin effectively had the category to itself, as direct competitors were selling significantly fewer cars. This success is now being tested by the recently introduced Wuling Bingo, which is achieving roughly 15,000 units a month.

If the Bingo hits the 20,000 unit a month threshold, it could give the Dolphin a run for its money. The small hatchback category could become even more competitive, depending on the success of the upcoming JAC Yiwei 3.

Achieving 26,072 registrations in May, the BYD Yuan Plus made it to fifth place. A success both domestically and internationally, the model can be expected to keep performing well outside of China, given that it has only just begun its international run.

But domestically, its future is somewhat opaque. Considering the current price war in China and the ever-increasing competition, BYD is likely to direct production overseas where competition is less intense and profit margins are higher.

Below BYD and Tesla’s best sellers, GAC’s Aion S continue to impress, with the sedan ending the month in sixth. Should the model continue to see registrations pick up, it could provide a third competitor to the dominant BYD and Tesla line-ups in the top five best-selling vehicles.

The BYD Seagull landed in 10th, with 14,033 units. That is a great performance for the electric vehicle’s (EV’s) first full month on the market. Furthermore, it can be expected to jump into the top five during the summer. Just below, the Wuling Bingo reached 11th with 14,164 sales. This gives the SAIC–GM joint venture some much-needed help now that registrations of the Muling Mini EV are showing signs of slowing.

The Li Xiang L7 came in 14th achieving another record month with 11,119 registrations. At roughly ¥350,000, it is currently the cheapest model in the company’s lineup. The startup has bullish plans for the car, setting a 2023 sales target of 400,000 units. Once the smaller and cheaper midsize L6 goes into production in 2024, much higher sales outputs can be expected. At this point, the carmaker’s 2025 target of 1.6 million units starts to make sense.

The other Li Auto models dropped to the 7,000 mark in May. No doubt, some internal competition is at play, but close to 30,000 sales a month in the full-size category is still respectable. That is almost as much as BYD sells in the category when adding the Han and Tang together.

Both the BYD Seal (8,062 units) and the BYD Destroyer 05 (9,840 units) reached the top 20. This is a positive sign, complemented by Denza’s continued ramp-up of its D9 large MPV (11,005 units).

Outside of the top 20, the Volkswagen ID.4 enjoyed a recovery with 6,260 registrations, which is the model’s best result all year. Meanwhile, Leapmotor’s C11 midsize SUV scored a record 7,121 registrations, no doubt helped by the introduction of a range-extended version that is now sold alongside the regular model.

May also saw Great Wall’s WEY premium brand deliver 5,136 units of its new Blue Mountain flagship SUV in only its second month on the market. With a 45kWh battery, extended-range technology, and full-size length, the carmaker is hoping to replicate some of Li Auto’s success in the category.

BYD Song out ahead

Between January and May, the BYD Song was well above its competition, while the Tesla Model Y could not beat the strong sales of the BYD Qin Plus. However, this should be a temporary standing, as the Model Y should recover the runner-up position in June thanks to its end-of-quarter peak.

The Tesla Model 3 dropped to 10th, allowing the BYD Han and GAC Aion Y to climb one position each, to eighth and ninth respectively. Until the refreshed Model 3 is launched, there is unlikely to be any improvement on this position. After the refresh, the sporty sedan could go after the seventh place GAC Aion S, and probably even higher. At this point, however, the Model 3 could start to hurt the performance of the leading Model Y.

In the second half of the table, the BYD Frigate 07 climbed to 14th, and the Wuling Bingo showed up in 17th. The small EV hopes to reach a higher standing soon. Finally, the Li Auto L7 came in 21st and can be expected to join the table in June. That would make three Li Auto models in the top 20, which is something only BYD has achieved so far.

BYD leads in its domestic market

In terms of brands, BYD remained firmly in the lead in May with a 36% market share. It looks set to win its 10th plug-in carmaker title this year, while Tesla (8.7%) held steady in second place. The third-placed GAC Aion continued its rise, now up to 6.6%.

After a long period of bleeding sales, the SGMW joint venture is starting to benefit from the Bingo’s success, growing its share from 5.9% in April to 6% in May. With the Wuling Bingo helping soften the sales drop of the Wuling Mini EV, the Baojun Yep has also landed. The first 2,279 units were delivered in May. Expect Wuling to start recovering soon, possibly reaching the third spot by the end of 2023.

Finally, Li Auto took the fifth spot with 4.2%, switching places with Changan (4.1%). This three-year-old startup is already reaching significant sales levels and could become a force to be reckoned with. To put the company’s growth into context, in 2015, three years after the Model S launched, Tesla was celebrating a record 50,000 sales a year. At the same age, Li Auto is registering more units in two months.

Looking at OEMs with brands grouped together, BYD held a comfortable lead with a 37.8% market share in May, while second place Tesla (8.7%) also remained stable. The new Wuling Bingo helped stem SAIC’s sales bleed. The OEM kept its 7.6% share, allowing it to retain the last podium position.

In fourth, GAC profited from its strong model performance, jumping from 6.6% in April to 6.9% in May. Geely–Volvo is one step below with a 5.3% share. With sixth place Changan losing ground (4.5%), Geely can rest on its laurels.