New electric vehicle sales in China plunged for the fifth consecutive month in November, prolonging a downturn that is hurting the industry in the last 12 months.
According to the China Association of Automobile Manufacturers (CAAM), China's electric vehicle slump was surprising and sales plummeted 43.7 percent year-on-year to 95,000 units in November after posting one of the fastest declines in the year in the previous month.
The auto association disclosed last month that in October year-on-year, electric car profits were down 45 percent. Chen Shihua, CAAM assistant secretary-general said that "because of low demand and mounting pressure on car manufacturers to update their technology to national standards, and significant subsidy cuts for new energy vehicles, sales have been low."
Not A Good Year For EV
CAAM warned about the weakening of the electric vehicle market by 2020. Only the global economy will be able to stabilize the sector, it said, while slowdown will also hurt manufacturers of batteries as China's EV slump weighs on lithium prices.
During Thursday's media briefing, CAAM said China's overall auto sales are expected to drop around 2 percent to 25.4 million units.
And while the overall auto market in the mainland continues to slow steadily, Tesla has started to unveil some of its Chinese-built vehicles last month.
Of course, at the time when the electric car market is going to bust, Tesla is setting up shop, and the automotive industry as a whole is going down.
China is the epicenter of the global automotive market, and partly the reason the industry is slipping into recession, market analysts said.
Global Auto Sales Down
Latest figures show that in the last four quarters, global auto sales peaked at just below 8 million units. The figure stood at 7 million in October, a decrease of around 10 percent.
Data also show that rapid downtrends in China, North America, Europe, Latin America, Africa and the Middle East have also take a huge toll on global auto sales.
Of all these, it could be argued that North America and Europe are the healthiest countries, but the patterns are still moving in the wrong direction.
The electric vehicle boom in China seems to be over for now, and this could be bad news for Tesla, but more significantly, the auto industry as a whole continues to decline, which means that the global economy is expected to stagnate in 2020, analysts said.
While Tesla's competitors in China may be worried about a price cut from the US electric car giant, industry observers believe it could lift the market in the long run.
