What’s new: China’s new-energy vehicle (NEV) sales in August set a new monthly record with over 320,000 units being sold in a single month, a 182% increase from that of last year, despite overall auto sales declining 17.8% year-on-year, according to newly released data from the China Association of Automobile Manufacturers.
About 14,000 of the NEVs were commercial vehicles, with their number increasing more than 55% year-on-year.
The record total means NEVs accounted for 17.8% of August’s overall vehicle sales, approaching the government’s target of 20% by 2025. The association estimated that the goal may be achieved ahead of schedule.
The decline in overall vehicle sales is attributed to chip shortages and recent changes in auto emissions standards.
Background: Since 2010, China has provided generous subsidies to promote the use of NEVs for several reasons, including reducing the country’s air pollution and getting a leg-up in a developing technology. But in 2017 Beijing decided to trim handouts to put the industry on a more sustainable track.
The current goal is to phase out all NEV incentives by the end of 2023, instead of the original target of 2020. Subsidies will be cut 10% year-on-year in 2021, 20% next year, and 30% in 2022.
Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)
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