China January 2017

SAIC managed to pull all the 5 meters of its e950 to the Top 10

Incentives drag the market down

The Chinese market had 6.260 new EV's in January, far from the 15.275 units of January 2016, dragging down the Plug-in Market Share to just 0.25%, frankly below the 1.45% of 2016.

Considering the seasonality of the Chinese PEV Market, where the first quarter is always the slowest selling, due to the December sales rush and the New Year holidays, a considerable month-on-month drop was already expected, for example in December 2015 sales reached 35.000, dropping to 15.000 in the following month, what surprised experts was the size of the fall, 6.260 units is setting back the market two years, the reasons for this unexpected drop will be explained below, for now let’s focus on last month registrations.

In January SAIC and BAIC took over the top positions, with Tesla benefitting from the local sales drought to post a best ever Fifth Position.

Here are the last month Top 5 Best Selling models:

  

#1 – SAIC Roewe e550: Shangai-based SAIC won its first Monthly Best Seller trophy last month, thanks to the 956 registrations of its e550, the plug-in hybrid version of Roewe’s Audi A4-sized 550 ICE model. This plug-in hybrid packs a 11.8kWh LiFePO4 battery, delivering an all-electric range of 58 km (36 mi), for a price of CNY 249.000, or some USD 36.200. Despite winning the yellow jersey in the first stage of the race, don’t expect this model to stay on top for long, once the incentives effect wanes and BYD gets their act together, the e550 should be easily displaced from the podium, a bit like Mark Cavendish in the last year Tour de France.

  

#2 – BAIC EU260: In the midst of the incentives drop, the BAIC EU260 got off to a good start, with 812 units being delivered, winning precious advantage over the BYD champs, something that could prove crucial in the final stages of 2017, when racing for the yellow jersey. With a generous 41.4 kWh battery, 260 kms range and 136 hp pulling it to an acceleration 0-100kmh in 9 seconds, it doesn’t have the Sports Sedan aspirations of the BYD Qin EV300, but it’s no slouch. Undercutting the aforementioned Qin EV 300 by some 5.000 Yuan (CNY 255.000), this is one of the most serious candidates for the 2017 Best Seller title.

#3 – BAIC EC180: After being shown last November, the little city car got off to a great start in December, after selling 4.128 units, now it registered another 724 units last month. This city car has the advantage of offering a faux-crossover look, ok interiors and a usable 180 kms range, thanks to a 20.3 kWh battery. BAIC has great ambitions for this, promising more models from the same platform. Now, about those subsidies…

 

#4 – JMC E100: If the Chinese government has its way, this is representative of a dying breed, the bargain-basement JMC E100 city car still managed to deliver 701 units in January, so these little buggers will probably keep on zooming around for quite some time.

#5 – Tesla Model X: Y’all know this one right? With a number of logistical issues happening in December, which lead to a sizeable number of Model X’s being only delivered in January, we estimate that the Tesla Model X had some 624 registrations last month, which together with the current incentives standoff, helped the Californian SUV to reach the Fifth Spot in the Chinese PEV ranking, a best ever position for a foreign model. Now don’t you worry Tesla shorters, this is most certainly a freak event and doesn’t mean that Tesla has finally broken the Chinese market.

  

Looking elsewhere, both SAIC and JMC placed a second model in the Top 10, with the Shanghai Auto model pulling its e950 large sedan, a 289k Yuan (USD 42.000) PHEV based on the 2010 Buick Lacrosse(!), to Seventh Place.

But the real news are the low, low numbers of BYD models, with the #8 BYD Tang being the best of them, but with only 278 deliveries, one has to go back four years to find such low numbers for the manufacturer. Rumors say that the Chinese manufacturer is preparing new batteries, with different chemistry (NMC?), considering that BAIC and SAIC weren’t so affected by the incentives delay, it seems BYD took this waiting period to make big changes, we just have to wait and see what was the cause for this slump.

Looking at January manufacturers ranking, the surprise leader is BAIC, with 26% share, followed by SAIC Roewe (23%) and JMC (18%).

Interestingly, Tesla ended the month ahead (Fourth, with 12%) of BYD (Fifth, 9%), which says a lot about the strangeness of the current Chinese ranking. Then again, these are strange times…

Pl	China	Jan.	YTD	%
1	SAIC Roewe e550	956	956	15
2	BAIC EU260	812	812	13
3	BAIC EC180	712	712	12
4	JMC E100	701	701	11
5 6	Tesla Model X e) JMC E200	624 424	624 424	10 7
7	SAIC Roewe e950	350	350	6
8	BYD Tang	278	278	4
9	BYD Qin	208	208	3
10	Changan Benni EV Others	202 993	202 993	3 16
	TOTAL Market	6.260	6.260	100

e) Estimate

2017 Outlook

Looking forward, the Chinese government set a goal of 2 million New Energy Vehicles (NEV = BEV + PHEV + FCEV) in 2020, considering this year should end with 800.000 units sold, one would "only" need to increase some 400.000 per year to reach the desired objective, an achievable task.

But with subsidies set to be cut off by 20% each year, and more demanding conditions (Safer cars, larger range, highway capability…) for eligibility, a large portion of the market, eg, ultra-cheap city cars, will suffer with these developments, because they will struggle to have access to subsidies, but they are not alone, as regular EV’s also loose part of the price advantage given by generous incentives.

The solution to offset the incentives cut will be dropping costs through scale, and that game can only be played by a number of OEMs, like BYD, BAIC, SAIC or Geely.

Ultimately the Chinese EV industry will benefit, because it will have less, but stronger players, more ready to take on foreign manufacturers head on, but sacrificing on the way a fast transition to plug-ins, so what January showed us is that:

A) The market will become more concentrated, with the top manufacturers distancing themselves from the others;

B) Volume numbers will suffer, especially in the first quarter, with the remaining quarters probably recovering the lost time, but don’t expect the ludicrous growth rates of 100% or so of the past three years to be repeated in the short term.


Post also published on EV Obsession and CleanTechnica