Published on February 15th, 2019 | by Dr. Maximilian Holland
February 15th, 2019 by Dr. Maximilian Holland
China’s biggest EV maker, BYD, had strong EV sales in January 2019, pointing towards another breakout year of EV growth in the middle kingdom.
With China’s redesigned NEV (New Energy Vehicle) policy having come fully into force in January, many analysts have been wondering how the new rules might reshape the market. Last year, as our sales guru Jose Pontes has recorded, China sales grew from 2017’s ~600,000 to well over 1 million, which looks to likely be a growth rate of around 80% once the dust has settled and the chips are fully counted.
Whilst it is still too early to fully predict China’s EV market growth for the 2019, BYD — the country’s largest NEV maker — just announced January sales figures that already show huge promise, with 28,005 passenger NEVs sold in the 1st month.
January is typically China’s slowest month for EV sales, with levels dropping to a third (at best) of the previous December’s highs, and then climbing again steadily throughout the year. Remarkably, BYD’s 28,000 January 2019 sales are not far off all of China’s passenger NEV sales in January 2018 (31,638). Let’s look at this pattern in a graph, and note BYD’s big start to 2019:
Looking at BYD’s growth relative to its own recent sales, January’s numbers are already at some 76% of December 2018’s record figure (37,010):
BYD had an anomalous production re-arrangement in Q1 of 2018, with BEV manufacturing volume (red bars) coming online only in March, so don’t put too much weight into those Q1 figures. Having said that, over recent years, BYD has had a higher proportion of PHEVs in its mix than BEVs, and it will be interesting to see if China’s updated NEV credits framework is going to encourage BYD to find a new ratio between these two types of NEVs.
The BEV/PHEV mix can also be strongly influenced by city policy, with BAIC’s Beijing home turf favoring BEVs while SAIC’s Shanghai region favours PHEVs. As you’d expect, you can read the local policy in each of those manufacturers’ sales mixes. Shenzhen, the locale of BYD, has not shown strong policy bias in either direction.
2019 China Outlook
There’s no doubt that BYD’s sales will continue to climb steadily throughout 2019, and we may well see BYD’s annual passenger NEV sales rise from 2018’s total of 227,000 to top 400,000, or even 450,000 in 2019, pushing 80–100% growth. Remember that BYD makes its own batteries and cells, so it is in much more control of its critical supply chain than most other EV makers. BYD is also planning on bringing 811 NMC cell production online this year. Are BYD’s early 2019 figures indicative of another stunning growth year for NEVs in China?
BAIC, the 2nd largest player in the China NEV market, recently said it is aiming for at least 220,000 NEV sales in 2019, up some 38% from its ~165,000 in 2018. Having grown at 66% last year, is BAIC being coy, or is it genuinely concerned about outside battery supply limits putting a damper on its upward trajectory? We will know more when we see January’s sales figures.
SAIC, with its PHEV focus (and relatively smaller batteries), may be better placed in this respect. As the 3rd largest player in China, it grew meteorically in 2018 at over 114% year on year to gain sales of ~123,000. Can we expect over 200,000 sales in 2019?
It noteworthy that — as well as BYD, BAIC, SAIC, and other established China NEV players — the excitement and huge size of China’s NEV market is still attracting entirely new entrants. Nio, for example, sold over 11,000 EVs in the second half of 2018, coming from nothing in the first half. It seems likely to be making EVs at around 4,000 per month already, and scaling. How many other less-known EV startups will be joining the China EV race, and will produce EVs and achieve sales that seem to arise out of nowhere, over the coming 12 months?
Overall, it seems that NEV growth of 50% (or more) may again be possible in the overall China market in 2019. What do you think? Let us know in the comments.
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