EVs make up 38% of Chinese new-car registrations in July

25 September 2023


Electric vehicles (EVs) are taking the Chinese automotive market by storm. José Pontes, data director at EV-volumes.com, considers the country’s electrification in July.

Consisting of battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs), China recorded over 658,000 EV registrations in July, up 31% year on year. In the first seven months of 2023, a total of 3.9 million plug-in vehicles took to the country’s roads.

EVs claimed a 38% share of China’s new-car market in July, up from 35% the month before. BEVs alone accounted for 26% of registrations. This pulled the year’s current electric-vehicle share to 36% (24% BEVs). Considering this rate of growth, EVs can be expected to claim over 40% of China’s new-car market by the end of 2023.

BYD and Tesla compete with themselves

Looking at the entire automotive market in July, EVs once again dominated the best-seller positions. Plug-in vehicles accounted for four of the top five models sold. Examining the EV market exclusively, BYD and Tesla filled the top seven spots.

The BYD Song led the Chinese EV market in July, scoring 50,440 registrations. While impressive, it does not guarantee the model first place come the end of 2023. Competition is rife, especially internally. At present, this consists of the recently introduced Frigate 07 PHEV. However, the Song L (BYD’s take on the Tesla Model Y) and its premium cousin, the Denza N7, are both set to launch soon.

This could be too much competition from inside BYD’s midsize SUV portfolio. There is the regular Song in the lower-price bracket, the Frigate 07 and Song L in the mid-price range, and the Denza N7 takes up the premium segment.

The is also the current wave of price cuts to contend with, which are spreading rapidly. These will be decisive for the Song if it is to continue clocking over 40,000 sales a month, which is a necessary threshold to continue leading in the competitive Chinese market.

Thanks to a recent refresh and price cut, the BYD Qin Plus has seen its registrations jump again. The midsize model reached 42,155 registrations in July, with the BEV version alone accounting for 11,455 units.

With prices starting at ¥100,000 (€12,924), demand is strong again, despite the fierce internal competition. BYD’s lower-priced midsize sedan can be expected to keep posting strong results, at the cost of its most expensive siblings. It should have no problem keeping its most direct competitors, the Tesla Model 3 and GAC Aion S, at a safe distance.

The small-to-compact BYD Dolphin scored 31,650 registrations, a new record for the space-efficient EV. In the past, the Dolphin arguably had its class all to itself, as its most direct competitors sold significantly fewer units.

This success is now being tested by the Wuling Bingo, which clocked a record 19,782 units in July. Once the Bingo crosses the 20,000 unit a month threshold, it could give the Dolphin a run for its money. The small hatchback category could become even more competitive with the upcoming arrival of JAC Yiwei 3.

With some 28,000 registrations in only its third full month on the market, the BYD Seagull is ramping up quickly. It should reach the top three in China soon, but it is overseas that the little EV could be a true disruptive force.

Latin America and Africa are waiting for a good, cheap EV that can push the technology into the mainstream, and the Seagull could be it. It could also place BYD among the best sellers in regions like India or Europe, where good value-for-money BEVs are scarce.

Starting at ¥74,000, the Seagull sits somewhere between the A and B-segments. With its purposeful angular design, the model profits from the brand’s leading blade batteries, in 30kWh and 39kWh sizes. The slightly larger Wuling Bingo could be a competitor, with a starting price of ¥60,000. But at that price, the model comes with a 17kWh battery and no DC charging.

A Bingo with similar specifications and a 32kWh batter and DC charging starts at ¥74,000, the same price as the Seagull. So, both seem competitive, but the Seagull benefits from the BYD brand, something that the Wuling EV lacks.

The Tesla Model Y recorded 24,351 registrations, which was its best first-month-of-quarter ever in China. It therefore seems the price cuts have helped spur demand, which might allow it to reach another record month in September.

At a time when Chinese carmakers are on top form, Tesla is currently the only foreign OEM able to follow the rapid pace of the domestic brands. The most immediate threat to the Model Y actually comes from the refreshed Tesla Model 3. If the price and specifications meet expectations, the sedan can be expected to start cannibalising its crossover sibling in the coming months.

New records set

Elsewhere in the top half of the table, ninth-place Wuling Bingo scored 19,782 registrations, its second record performance in a row. This means it beat its smaller sibling, the Wuling Mini EV, and could go on to disrupt BYD and Tesla’s duopoly. The Wuling Bingo could reach the sales levels of the category leader, the BYD Dolphin.

The Changan Lumin came 12th with a record score of 15,262 registrations, thanks to a recent refresh. Elsewhere, Li Auto placed all three of its models in the top 20. The L7 five-seater had another record month (13,389 registrations) while the slightly larger L8 seven-seater also pushed into new territory with 11,315 units. The L9 also performed well, securing 9,425 registrations.

The startup brand may have a winning trio on its hands. Li Auto has already set a bullish sales target of 400,000 units this year, 800,000 in 2024, and 1.6 million in 2025. For these to be met, the midsize L6, due to be launched sometime next year, will be a crucial part of the puzzle.

Three other models also deserve a mention within the top 20. The 15th-place BYD Destroyer 05 hit a record 11,994 registrations, its second strong performance in a row. Nio’s latest generation of the ES6 came 18th, scoring 10,252 registrations in July. This was the first five-digit performance in a month by any Nio model. Expect the ES6 to resume its role as the brand’s top model, allowing the startup to scale up its production.

After a significant price drop, VW ID.3 sales surged in China, allowing the hatchback to reach the top 20 for the first time with a record 9,093 registrations. Outside the top 20, Changan’s Deepal S7 SUV recorded 7,704 registrations in only its second month on the market.

The Baojun Yep, a recently introduced pint-sized SUV, delivered 5,305 units in only its third month on the market. Meanwhile, Leapmotor’s C11 midsize SUV achieved another great performance with 8,298 registrations. The model was no doubt helped by the introduction of a range-extended version, which is now sold alongside the regular BEV version.

BYD takes top two

Looking at the rankings between January and July, the BYD Song is well above its competition. Meanwhile, the runner-up Qin Plus gained a precious advantage over the third-place Tesla Model Y. Off the podium, the GAIC Aion S surpassed the Wuling Mini EV to take sixth.

In the second half of the table, the Wuling Bingo climbed one position to 12th, while just below it, the Changan Lumin took 13th. There were two new BYD models in the table, with the small Seagull jumping to 15th while the Destroyer 05 sat in 19th.

Finally, Li Auto’s L7 gained 17th and the L9 went up to 18th, making three Li Auto models in the top 20. Apart from BYD, no other brand has that many models in the top 20, and it speaks volumes about the startup’s current strength.

Domestic brands rank highest

Looking at the brand ranking in July, there were no major changes. BYD (35.5% share) remains stable in its leadership position and is looking to win its 10th Chinese EV title this year. Meanwhile, while off-peak Tesla (8.4%, down from 9.1%) stayed stable in second.

The third-place GAC Aion held 6.5%, while SGMW recovered slightly, pulling its share from 5.8% in June to 5.9% in July. Finally, 5th-place Li Auto kept rising (4.4%, up from 4.3%). This three-year-old startup is already reaching significant sales levels and looks set to become a force to be reckoned with.

Despite staying off many analysts' radars, Li Auto’s growth potential, price points, and margins are the most promising among current EV startups. To put the company’s growth curve into context, in 2015, three years after the Model S launched, Tesla celebrated a record 50,000-unit sales a year. At the same age, Li Auto managed more than that in two months.

This is something of a perfect storm for legacy OEMs in China. BYD and GAC are going after the mainstream market volumes, Tesla is hitting the midsize and premium segments, and Li Auto is making its way into full-size model territory.

Looking at OEMs with brands grouped, BYD led comfortably with a 37.3% share of the market in July. Second-place Tesla also stayed stable at 8.4%. The new Wuling Bingo helped to stop the sales bleed at SAIC,  the OEM claimes a 7.5% share, enough to allow it to stay on the podium. With fourth-place GAC (6.9%) getting closer, SAIC’s position could soon be in danger.

One step down, fifth-place Geely–Volvo is slowly growing, now at 5.6% share. Changan was stable at 4.5%, meaning Geely can rest on its laurels while it looks for a way to surpass SAIC and maybe GAC by the end of the year. After which it may even look towards Tesla in 2024.