Monday, November 18, 2019

China October 2019

Resultado de imagem para gac aion s 2019"

GAC Aion S is the only ray of light in a depressed market  

There seems to be no end to the incentives blues, with the Chinese plugin market plunging 46% YoY, and this time both powertrain technologies crashed at the same speed (-47% for BEVs, -46% for PHEVs), a worrying drop, considering the overall market was down just 6% YoY.

In the midst of this adverse environment, October’s PEV share was just 3.5% (2.7% BEV), dropping the 2019 PEV market share to 5.5% (4.3% for BEVs alone), which is still above the 2018 result (4.2%), but should the market continue this red until the end of the year, the 2019 share shouldn’t be much different from 2018.

The main 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, but the reasons do not end there, besides the general drop in the local automotive market, there must be some GF3 Osborne effect also going on, affecting not only the Model 3 deliveries, but also everything close to it.

This is changing the face of the market, as it is now 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 14%.

In October, the nameplate that made the biggest impression was the #3 GAC Aion S, that continues to ramp up production every passing month, no mean feat, considering all the doom and gloom around it.

Here’s last month Top 5 Best Selling models individual performance:

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#1 – BAIC EU-Series: The electric sedan scored another win, this time with 7,623 units last month, with the Beijing Auto model continues King of the Hill, thanks to an attractive design and specs (215 hp, 416 kms / 260 mi NEDC, US $32,500), but considering that many of its main competitors are taking a hit, the question remains: How long will BAIC’s electric sedan continue immune to the current pessimistic environment?

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#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. It seems the tiny two seater has won the lottery with the new rules, winning consecutive podium positions, and October was no exception, having registered 4,636 units last month. The updated range, thanks to a new 24 kWh battery, is the crucial element 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. 

Resultado de imagem para gac aion s

#3 – GAC Aion S: Things are going well for the Aion S, because the sleek sedan continues to improve its performance every passing month, having established another record yet again, with 4,217 units, reaching the 3rd place in October, its 4th Top 5 spot in a row. A sedan inspired by the Tesla Model 3 formula, GAC is betting everything in its new dedicated EV lineup, the Aion. Besides the Aion S sedan, the recently landed LX also promises to make an impact in a few months. But back to 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.

Resultado de imagem para byd yuan ev 500

#4 – BYD Yuan / S2 EV: The small crossover was one of the subsidy cut victims, while previously it clocked 6,000-plus performances regularly, now i tis happy to cross 3,000 units, like last month (3,227 units). While the BYD model has competitive specs (58 kWh battery, 410 kms /255 mi NEDC range, 163 hp motor), for the price (25k USD), the truth is that the overall negative environment is taking its toll on the Yuan sales.

 Resultado de imagem para bmw 530le 2019

#5 – BMW 530Le: The current success of BMW’s luxury sedan in China has take a lot by surprise, but it seems it is here to last, in October the luxury sedan scored 2,764 units, allowing it for another Top 5 presence. 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 around 3,000 units per month, which is well above its direct competitors, that would happy to reach 1,000 units in one month.

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2019 ranking

The market is now adapting to the new reality, now that certain models lost access to subsidies.

We’ll start with the position changes, with the Chery eQ tying with the BYD Tang PHEV in the 4th place, but the most important change happened in the second half of the table, with the GAC Aion S jumping 5 positions, to #14, with the stylish sedan now being half way to secure a Top 10 position this year, which would be a great starting point for a Top 5 (Podium?) spot in 2020…

The GAC star player, along with the BMW 530Le and the Tesla Model 3, currently seem to be the only players with the potential to climb positions until year end, as most of the other models are seeing its sales dry out.

Outside the Top 20, a mention to the MG eZS EV compact crossover, with the Shanghai Auto nameplate scoring 2,549 units, its best result so far, allowing it to be #6 in October.

With MG having high hopes for the electric crossover in export markets, these good numbers in its domestic market are a good sign for the success of the nameplate elsewhere.

In the Best-Selling Startup race, if Xpeng had a horrible month, with only 505 units, WM Motors, and its Weltmeister EX5 EV, saw 2,056 units delivered, a new year best, while NIO did even better, by delivering 2,526 units (2,220 ES6 and 306 ES8), this being its third best result ever and representing a 61% growth YoY.

I wish the best of luck to NIO, despite the heavy losses, the brand has potential, let’s hope it has enough resources to launch the compact crossover ES3,a model said to be launched in next year, which will be essential for the brand to win scale and find its way into profitability.

If the Chinese EV maker survives the next two years, I believe it will have a bright future ahead, even in overseas markets.

Looking at the manufacturers ranking, BYD (18%, down 1%) is losing momentum, while below it, BAIC (12%, up 1%) isn’t much better, all while #3 SAIC (11%, up 1%) is benefitting from the new environment to gain share.

Outside the podium, Geely (5%, down 1%) is slowly losing charge, unlike GAC, that now has 3% share and is on an upwards trend.

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 above of most of the local OEMs, in this highly competitive market.

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 will be?


  1. If the production volume of GF-3 in 2020 reaches a very modest 100,000, Model 3 will have a shot at winning China best seller title. If the rump-up is faster it can dominate the market.

    1. I'd say there is very little doubt that Tesla can produce the volumes necessary to reach the top spot... Question is whether they will find enough buyers at the current price point.

    2. @ Antrik

      The "made in China" Tesla Model 3 will qualify for the Government incentives in China.

      And there will be no import duties because the cars will be produced in China.

      The price will be more competitive and more affordable for the buyers in China.

      The total number of Tesla Model 3 deliveries in China will be more than 60,000.


  2. Maarten VinkhuyzenNovember 18, 2019

    The Chinese policy was: Let hundred flowers bloom.
    Weeding the weak and pushing the strong with careful and timely incentive adjustments.

    It looks like the last adjustment was a bit too early and a bit too strong.

  3. Regarding NIO, I'm actually more interested in the upcoming sedan they have been touting, with specs that for once would actually justify their relatively high prices...

    Even then, I'm pretty sceptical about their prospects. Even with perfect execution, they will need many more billions in order to have any hope of reaching sustainability -- will investors be willing to provide that? Frankly, between established global makers becoming more serious about the Chinese market, and established Chinese makers presumably stepping up their game and introducing more premium models, I don't really see much room for any of the startups...

  4. The effects of the heavy-handed government policy now look even worse than expected: not only are the sudden drastic subsidy cuts devastating (as I pointed out before, it's actually more than 50%, since local subsidies were eliminated at the same time) -- but the attempt to force the Chinese makers to focus on more high-end EVs (that presumably should become export hits in the future) looks like a total failure: most of the Chinese makers just do not seem to be there yet; while killing the market for affordable EVs removes the scale necessary to get there...

  5. The efficiency of the Aion S is really impressive. And it's not just the aerodynamic shape: at the low speeds NEDC uses, this should only have a limited impact... Getting a range higher than Model 3 SR+ with a similar battery size, suggests it has a surprisingly efficient drive unit.

  6. Curious that after months of strong sales, the Passat has pretty much collapsed now... I wonder whether that's only a temporary hiccup, or there are more fundamental reasons?

    1. 1 - PHEVs are also hurting;
      2 - Tesla Model 3;
      3 - VW is now focused in launching BEVs. PHEVs were a quick fix.

  7. The total wipe-out of some models (most notably the BAIC EX) makes me wonder whether perhaps they stopped production of these models entirely? Either temporarily, to update them in the hopes of catching the remaining subsidies; or maybe even permanently, because they are just not profitable any more?...

    1. I agree, many models just stopped being produced, and only a few will return, with bigger batteries, in order to have access to subsidies and/or become more competitive.