China’s retail penetration rate for new energy vehicles (NEVs) surged to a record high of 62.9% in May. This milestone was achieved against the backdrop of a year-on-year decline in overall NEV retail sales, highlighting the accelerating collapse of the traditional internal combustion engine (ICE) vehicle market.
Retail sales of NEVs in China stood at 950,000 units in May, down 7.5% year-on-year but up 12.4% from April, according to data released Monday by the China Passenger Car Association (CPCA).
This marks the fifth consecutive month of year-on-year declines in China’s NEV retail sales, underscoring the pressure facing the market.
Despite this, China’s NEV retail penetration rate soared to an all-time high of 62.9% in May, exceeding 60% for the second straight month.
This was primarily due to the broader passenger vehicle market remaining under immense pressure. Total national retail sales of passenger vehicles in May were 1.51 million units, a sharp drop of 22.1% year-on-year.
The core driver of the Chinese auto market’s downturn is the rapid contraction in sales of ICE vehicles, the CPCA said. Severely impacted by high oil prices, retail sales of conventional ICE passenger vehicles plummeted 39% year-on-year in May.
Consumers’ accelerating transition toward electrification has driven the continuous climb in NEV penetration. In the domestic retail market in May, the NEV penetration rate among local Chinese brands reached a staggering 81.4%.
Retail sales of battery electric vehicles (BEVs) in China were 637,000 units in May, up 3.9% year-on-year and 10.3% from April.
Retail sales of plug-in hybrid electric vehicles (PHEVs) stood at 228,000 units, down 23.0% year-on-year but up 19.3% from April.
Retail sales of extended-range electric vehicles (EREVs) were 85,000 units, a year-on-year decrease of 28.0% but an 11.2% increase from April.
Hybrid vehicles, including PHEVs and EREVs, recorded retail sales of 313,000 units in May, down 24.4% year-on-year but up 15.5% from April.
Meanwhile, overseas markets are emerging as a core growth engine.
China exported 424,000 NEVs in May, surging 112.6% year-on-year and 4.4% month-on-month. This accounted for 54% of total passenger vehicle exports, the highest on record.
In terms of corporate performance, BYD (HKEX: 1211) continued to maintain its absolute market dominance. The company’s domestic NEV retail sales reached 207,372 units in May.
Geely Auto (HKEX: 0175) and Changan Automobile followed, achieving NEV retail sales of 109,198 units and 62,865 units, respectively. Tesla’s domestic retail sales in May stood at 47,281 units.
