China forecasts six million EV sales for 2022

THE China Passenger Car Association (CPCA) has forecasted an ambitious six million EV sales for 2022, up from its earlier estimate of 5.5 million, after new-energy vehicle deliveries doubled in July – to a staggering 486,000 units.

For perspective, that July EV sales number for China is more than five times the 84,461 total vehicle sales in Australia for the month, and accounts for 27 per cent of the new auto market.

The six million sales forecast more than doubles last year’s 2.99 million new-energy vehicle sales in China, but the CPCA statement claims the estimate is still “relatively cautious”.

China’s 2022 electric vehicle sales figures eclipse all other key regions, followed by Europe, and 73 per cent of the new sales are made up of the major Chinese brands.

Major player BYD reported EV and PHEV sales of 162,530 for July, after culling all purely petrol-sipping vehicles from its range earlier this year.

Whether traditional car-makers can compete with new-energy natives, is up for debate, as local Chinese upstarts like Xpeng Inc., Li Auto Inc., and Nio Inc. make up 16.5 per cent of July sales in China.

Meanwhile in Australia EV sales are strong, but not staggering, with 609 all-electric vehicles sold in July and a year-to-date total nudging 10,000.

In Australia, it’s no surprise that Tesla has remained dominant, with 4,657 vehicle sales this year as of the end of July, all of those being Model 3s.

In mid-May, the CPCA said retail sales volume in China through 2022 would total 19 million units, six per cent less than the previous year. Now, through the implementation of new policies and incentives – including the preferential purchase tax – the body predicts domestic sales could reach 21 million vehicles.

Overall, China’s new car market is rebounding as vehicle production volume recovers from COVID-19 related lockdowns. Vehicle sales last month were estimated to have reached 2.45 million units, a 20.9 per cent year-on-year increase.

According to CPCA secretary-general Cui Dongshu, the robust performance of the new car market is due in part to the country’s raft of pro-consumption measures, which include the halving of purchase tax for the majority of petrol-powered models available in the market. The incentive is expected to continue until the end of the calendar year.

To date, State Taxation Administration data shows the policy had saved buyers ¥7.1 billion ($A1.48b), with an estimated total of ¥60 billion ($A12.5b) worth of tax cuts to be handed out before the end of the year.

Further incentives, including those to support the purchase and use of so-called new-energy vehicles (NEVs), the scrapping of certain regulations on used car sales, and encouraging the replacement of older vehicles are also expected to be implemented before the end of the year.

China is urging rural provinces to bolster spending on NEV infrastructure and for charging operators to lower their fees to help equalise the operational costs between combustion and electric vehicles.

“If well implement, the positive effects (of financial stimuli) on the market could last up to five years,” said Shanghai-based automotive analyst, Roy LU.

During the first half of 2022, approximately 2.2 million NEVs were registered across China, doubling the number for the year prior. NEVs accounted for nearly 20 per cent of all new vehicle registrations in the country between January and June this year (2022).