China's policies, meant to help its citizens recover despite the US-China dispute combined with a punishing global economy, has weighed heavily on one of the manufacturers.
BYD is showing how their market has slowed down following the introduction of subsidy cuts to companies such as them. According to Quartz, China's plan of "selecting the superior" isn't going how Quartz envisioned it to go.
Since late June, Beijing has started cutting subsidies for EV manufacturers by half as the market slowed down. Monthly sales within the EV maker BYD showed that nationwide sales in July haven't been doing good. In the report about to be released this week or the next, the Shenzhen-based company said that it managed to sell only 16,567 units in July.
The report showed how sales are down by 38% in the month before and an even lower 12% from the same period last year. Electric passenger cars have usually been making three times larger in their sales than with plug-in hybrids. That simply isn't the case with BYD's EVs, where July showed a narrowing gap as well.
In SCMP's report, the situation with overall low sales of electronic vehicles isn't reserved for BYD alone. China's electric and hybrid vehicle makers are being advised to brace for a massive downturn as consumers haven't flocked to showrooms as much as the manufacturers would like. Analysts have also warned about evidence where a downturn in the new-energy vehicle sector (NEV) is very possible.
Shen Wei, an auto analyst with UBS, said that sales are slowing down due to customer numbers also going down. There are customers who have already gone with their choice of NEV, and these are removed from the number of possible customers. The industry has also been very optimistic about the NEV segment to the point that they did not anticipate the kind of numbers seen very lately.
NEVs remains a "bright spot" after surviving an annual decline in sale weighing on the nature of the broader automotive sector. Sales have kept their surge at 58.7% to 617,000 units in only the first six months of the year, a report from the China Association of Automobile Manufacturers (CAAM) revealed.
The previous month had China selling 1.26 million pure electronic and plug-in hybrid vehicles, improving by 61.7% from 2017. BYD is also on-track to delivering more EVs than fossil-fuel cars this year for the first time. It might have been just a "lean period" for China's EV industry.
