|This land yacht is the best selling foreigner in China|
Tesla Model 3, GAC Aion S and BMW 530Le shine in depressed market
There seem to be no end to the end-of-incentives hangover, with the Chinese plugin market dropping a steep 27% YoY, and PHEVs crashing 45% YoY last month, while BEVs got finally dragged into the red ink, dropping a harsh 20% in September, while the overall market behavior was somewhat not so catastrophic, sliding down just 6% YoY.
In the midst of this adverse environment, September’s PEV share was just 4%, dropping the 2019 PEV market share to 5.7% (4.4% for BEVs alone), which is still above the 2018 result (4.2%), but should the market continue in the red until the end of the year, the 2019 growth rate should be minimal, compared to the exponential rates of previous years.
The reason for this string of drops lies on the subsidy changes that happened on June 26, when NEV subsidies were cut off completely for vehicles with less than 250 kms electric range, while those with higher range saw their subsidies halved.
From then on, we are witnessing a less subsidy dependent market, with smaller, cheaper models unable to compensate the subsidy loss, while the most expensive end of the market continues to thrive, helping foreign OEMs to increase market share, now at 13%.
Currently China is the fastest evolving plugin market in the planet, with several new models outselling the YTD best sellers, like the just landed BYD e2 (2,078 units), the
badge engineered JAC crossover E20X (2,236 units) from SOL,
the new EV-only brand from Volkswagen, or the NIO ES6 (2,190).
In September, the nameplates that made an impression were the #3 Tesla Model 3, the #4 GAC Aion S and the #5 BMW 530Le, three different proposals that should start to become regular faces in future Top 5’s.
Here’s last month Top 5 Best Selling models individual performance:
#1 – BAIC EU-Series: The electric sedan scored 8,710 units last month, with the Beijing Auto sedan recovering the monthly Best Seller title, while improving 15% month-on-month. The design and specs (215 hp, 416 kms / 260 mi NEDC, US $32,500) allows it to remain a popular choice, but with the competition increasing every passing month, BAIC has a tough job ahead of it, if it wants to keep leading the pack.
#2 – Baojun E-Series: With the end of subsidies for most of the small city EVs, unable to reach the minimum 250 kms range, the few that still have access to subventions have seen their sales rise, and none did it more spectacularly than the Baojun E-Series, Shanghai Auto and General Motors offspring. The last months of the tiny two-seater have been their best yet, having registered 5,353 units last month. The updated range, thanks to a new 24 kWh battery, is a crucial tool to reach the subsidy minimum range requirement, which added to its competitive price (CNY 93,900 / USD 14,700) before subsidies, makes it an appealing model, especially considering its modern design and features.
#3 – Tesla Model 3: The poster-child for electric mobility hasn’t yet taken over this market by storm, like it did elsewhere. Still, the Tesla sedan is making its own disruptive path, with the estimated 4,200 units of September allowing it to reach a podium seat. At this point, the Tesla nameplate is far from the domination held in North America or Europe, but with local production set to be a few weeks away, the sporty silhouette of the Model 3 should become a common sighting in this Top 5 soon.
#4 – GAC Aion S: A few months ago I was mentioning the big potential of this model, saying it could reach a 10,000 units/month pace. And things are going well for the Aion S, because the sleek sedan is now at 4,006 units on its 5th month in the market, reaching the 4th place in September, its 3rd Top 5 spot in a row. Another sedan inspired by the Tesla Model 3 formula, GAC has high hopes for its new dedicated EV lineup, the Aion. Right now we have the sedan Aion S, but a midsize SUV, the LX, will soon follow. Back at the Aion S, beyond the stylish (and aerodynamic - 0.245cd) looks, this new model bears some impressive specs: a 59 kWh CATL NCM 811 battery, 510 km / 318 mi NEDC range and Level 2 driving aids, but the real killer is the price: Around 180,000 CNY / $26,000. Before subsidies. Like Kanye West would say: “Now, I ain’t sayin’ it’s a Tesla-killer / But the Aion is messin’ with the Best Sellers…”
#5 – BMW 530Le: The rise and rise of BMW’s luxury sedan in China demonstrates two intersecting trends, first the never-ending increase in demand for environmentally-friendly vehicles in China, and second the need to fulfill the plugin quotas. Add the two together, and you have 3,486 units, a new record result, even without access to subsidies (then again, let’s face it, subsidies for cars at this price level don’t really make that much of a difference, the owners just use the money for some nicer alloys or optional creature comforts…), so the leader in the Luxury category should continue selling at over 3,000 units per month, which is well above its direct competitors, that are happy to reach 1,000 units in one month.
|GAC Aion S|
The market is now adapting to the new reality, now that certain models lost access to subsidies.
We’ll start with the most important position changes, with the #4 BYD Tang PHEV and the #5 Chery eQ climbing one position, at the expense of the BYD e5, that has seen its sales dry up (221 units).
The BYD workhorse sedan is now between a rock (subsidy cut) and a hard place (internal competition, with the new BYD e2), so the carmaker needs to do something, if it wants to revive its bread and butter model.
Elsewhere, both the BMW 530Le and the Tesla Model 3 benefitted from strong deliveries last month to jump several spots on the ranking, with the German sedan reaching #10, while the Californian was up to #11.
Oh, and with both nameplates separated by just 265 units, we should see a pretty interesting race for this year title of best foreign model. Stay tuned…
Another model profiting from the sales drought of many nameplates was the BAIC EX-Series, that climbed to #13, while its small sibling, the EC-Series, hanged on in #18.
One big event was the GAC Aion S reaching the Top 20, in #19, thanks to 4,006 units, its 4th consecutive personal best in only 5 months on the market, and with 3 months still to go, it wouldn’t be surprising if it still got time for a Top 10 spot in 2019. As for next year, it will be a strong contender for a Top 5 position…
Elsewhere, the SOL E20X seems to have started its regular deliveries, with 2,236 units, while the NIO ES6 reached 2,190 units in September, allowing the brand to stay as the Best-Selling Startup, while SAIC’s MG eZS crossover registered 1,800 units, a positive month for a model with high ambitions in export markets.
A mention also for the estimated 1,400 units of the Tesla Model X, the best- selling Luxury SUV last month, but with the Californian nameplate still 1,500 units behind the NIO ES8 (8,500 units) in the 2019 count, it seems a difficult task for the Tesla nameplate to remove the NIO from this year category leadership.
Looking at the manufacturers ranking, BYD (19%, down 4%) is losing momentum, while below it, BAIC (13%, up 1%) and SAIC (10%, up 1%) are benefitting from the new environment to gain share.
Outside the podium, Geely (6%) hangs on, watching the medal positions from a far, while at the same time gains space over smaller players (Chery, Great Wall, JAC…), behind it.
Will this Natural Selection help the market become more competitive? For now, the best foreign carmakers (Tesla, BMW and VW all have 3% each), are already surpassing several local OEMs, with these front runners winning crucial breathing space, in this highly competitive market.
On the other hand, it seems in the future only some 5 or 6 Chinese EV makers will be able to run with the best of the foreign brands…
Any bets on who they will be?