Subsidy Cuts & Tesla Model 3 Shake Up Chinese EV Sales Ranking — June Sales Report

After a slow May, with just 2% growth, June saw the Chinese plug-in vehicle market return to full charge, thanks to some 147,000 registrations, up 72% year over year (YoY). Fully electric vehicles (BEVs) grew faster than that, at +97%, and because the mainstream market is falling (-8%), June’s plug-in vehicle (PEV) share reached a record 8.5%, pulling the PEV market share to 6.3%, well above the 2018 result (4.2%) and on target to reach my forecast of 8% for 2019.

At this pace, some months of the second half of the year could reach 10% or more. And that’s when things get even more interesting…

But, starting on June 26, “new energy vehicle” (NEV) subsidies were cut off completely for vehicles with fewer than 250 kilometers of electric range, while those with higher range saw their subsidies halved. That made some smaller range models peak in June. So, from now on, certain low-end models should see their registrations dry up, and the question will be if the market will see its overall growth being affected by that.

To be continued…

Back to the present day, China is without doubt the most fascinating and fast evolving plug-in market on earth, with several seismic changes happening at the same time. It’s not only the Tesla Model 3 making waves — it’s also foreign brands scaling up plug-in production to meet the 2019 quotas, the local startups trying to hit relevant volumes in order to survive, and local big players racing against each other to see who can launch more models and ramp up their production faster.

This month was filled with surprises, with BAIC, Changan, and Tesla shining, allowing the Californian brand (3% share) to come closer to the foreign leader, Volkswagen (4% share, down one percentage point). In third is BMW (2%).

In June, the most important surprise in the model ranking came in #2, with the sedan Changan Eado EV scoring a record 7,340 units. Meanwhile, in #4, we have the Tesla Model 3, with an estimated 6,500 units registered.

Here a closer look at June’s top 5 best selling models:

#1 – BAIC EU-Series: The electric sedan scored a record 17,916 registrations last month, reaching the #15 spot in the overall auto market ranking, confirming that this was the brand’s right bet for the year. While Beijing Auto has managed better results in the past (20,648 units with the small EC-Series in October ’18), the EU-Series sedan is a larger and pricier proposal, meaning more revenue and profit for the automaker. The design and specs (215 hp, 416 km / 260 mi NEDC, $32,500) allow it to remain a popular choice, but with appealing electric sedans landing every month, BAIC will have to keep a close eye on the ever-expanding competition if it wants to keep leading the pack.

#2 – Changan Eado EV: “Chan-who?!?!” You’d be forgiven for not knowing about this brand, as it has been performing under the radar in the NEV market most of the time, but after Geely, it is the largest Chinese automotive brand, so it has been surprising that it hasn’t been more active regarding EVs. It seems the company has finally awaken to the current market disruption and given its best perforance ever in June, with the Eado EV sedan scoring a record 7,340 registrations. Playing in the heart of the Chinese plug-in market (Model 3-sized sedan, $30,000-ish price, 430 km / 269 mi NEDC range), the Lexus-inspired model doesn’t profit from a powerful motor (only 136 hp) compared to the 200+ hp of the BYD and BAIC models, but Changan hopes to profit from the strong name recognition (the Eado is its best-selling model) to win a large customer base.

#3 – BYD Yuan EV: The brand’s baby crossover seems to be stuck at 6,000-something monthly registrations, which would be something to praise from almost any other automaker, but we are talking about BYD here. With the brand now prioritizing BEVs, battery demand is increasing even faster than before, so higher priced models (Tang, Song, Qin, etc.) are getting ahead of the Yuan, hence the rather disappointing 6,566 units of June. With amazing specs (58 kWh battery, 410 km / 255 mi NEDC range, 163 hp motor) and price ($25,000), this is was the year’s strongest candidate for the best seller title, up until now.

#4 – Tesla Model 3: The poster child for electric mobility has landed in China, and despite some pretty respectable numbers, somehow it has failed to live up to the expectations of some enthusiastic Tesla fans who expected the sports sedan to take over the market, like it did elsewhere. Still, the Tesla sedan is making its own disruptive path, with the estimated 6,500 units of June representing the best score ever for a foreign model in China and allowing it to reach the 4th spot in June. At this point, the Tesla nameplate is far from the domination it has held in North America or Europe, but it seems to be the only foreigner with the potential to run at the same pace as the local best sellers. It’s like LeBron James, undisputed king in the Eastern Conference, but when in the Western Conference … it’s a different ball game. 

#5 – Chery eQ: One of the pioneering EV brands, Chery won China’s best selling EV title three times in a row (2011, ’12, ’13). The automaker has recently regained relevance with the small eQ EV, having registered 4,965 units last month. That was its best result in 2019, allowing Chery to collect another top 5 position. But the increased competition (JAC iEV E-Series, BYD e1 …) and the end of subsidies (because it has less than 250 km of range on a full chargee) should create difficulties in the nameplate’s career. Let’s wait for the next episodes, to see if that is confirmed.

2019 Ranking

The market is dynamic as ever, this time helped by the subsidy-derived forward pull of low-range EVs. But there are plenty of things to talk about.

We’ll start with the most important position change, the BAIC EU-Series displacing the BYD Yuan EV from the leadership position, a first for the Beijing Auto sedan. That at the same time ended a 5 month spell of the BYD nameplate in the leadership, that in turn had interrupted the 16 month lead of the BAIC EC-Series.

Speaking of BAIC’s small EV, after a fall into the abyss in 2019, in June the hatchback returned to a half decent performance, with 4,744 units registered. That allowed it to return to the top 20, in #19, but the question now is: Was this a pull-forward move, in order to profit on the incentives, or is this a sustained surge?

The other new face in the ranking is the #20 Dongfeng Fensheng E70 EV. The electric sedan registered 3,525 units last month, a new monthly record for a Dongfeng nameplate.

But the Climbers of the Month were the Changan Eado EV, Tesla Model 3, and BYD Qin EV, with all of these models jumping five positions in the ranking. The Eado EV went up to #11, thanks to 7,340 units, a new high score for any Changan model, while the Tesla Model 3 jumped to #13, just one position below the current best selling foreigner, the VW Passat PHEV. The BYD sedan is now #15, thanks to 3,016 registrations, a new personal best for the nameplate, allowing it to be just 414 units behind its PHEV sibling, the Qin PHEV.

When the BEV version of the Qin surpasses its PHEV relative (next month?), it will be a small but significant sign of the current BEV trend (full electrics had 84% of registrations in June, against 80% YTD).

The SAIC Baojun E-Series came back from the dead to score 4,556 units, its best result since June, which is no surprise considering this will be another model that will lose any kind of subsidy from this moment on. 

The Xpeng G3 EV, from the startup Xiaopeng, is now #17, thanks to 2,237 registrations, surpassing once again the other local EV startups, Weltmeister (1,902 units) and Nio (1,340). Although, Nio is keeping the best-selling full-size SUV title, via the #23 ES8 SUV. Its smaller (and cheaper) SUV sibling, the ES6, landed just this month (413 sales), so expect Nio to recover the Best Selling EV Startup title soon, thanks to the ES6 production ramp up.

Talking about production ramp ups, the much hyped GAC Aion S sedan went up to 2,016 units in only its second month on the market, already surpassing its nemesis, the Geely Geometry A, which scored 1,743 units in its 3rd month.

But the hottest newcomer is the JAC iEVS4 EV, a compact crossover that had Volkswagen’s helping hand in the development stage. The iEVS4 scored 3,156 registrations in only its 3rd month on the market. Will we see it soon in the top 20? 

Looking at the manufacturer ranking, BYD (22%) is leading comfortably, thanks to the success of its broad lineup (there are 3 BYD models in the top 4 spots, and 5 in the top 15). Below it, BAIC (10%, up 2%) has surpassed SAIC (8%, -1%), thus recovering the 2nd spot, while Geely (6%) is looking to profit in the coming months from the current model launch fever, so that it can finally race for a podium position.

Cool New Kids on the Block

I think I should start a new section here, called “this month in Geely,” where I would describe all of the automaker’s new launches. They are coming at an average of more than one per month!

So, this month in Geely, we have two new models landing, the PHEV version of the Lynk & Co 02 compact crossover (think of it as the Chinese cousin of the Volvo XC40 PHEV, and the sporty sibling of the Lynk & Co 01 PHEV model), and the PHEV version of the Geely Emgrand GL, a model that sits between the regular Emgrand EV sedan and the flagship Borui GE.

But now we are off to the most exciting of this month’s landings:

NIO ES6 – Approximately a year (and over 15,000 units) after the landing of the trailblazing ES8 full-size SUV, Nio has launched its “Model Y,” the ES6. The new SUV landed with a lot of responsibility on its shoulders — namely, making Nio profitable, which is no small feat (insert “Tesla should know” text). 

Banking on the experience (and platform, design, etc.) earned with the ES8, the ES6 is supposed to be the shorter, sportier, and (above all) cheaper version of its older brother, which should push sales volumes significantly up and help Nio to finally cross Chinese borders.

With two battery sizes (70 kWh and 84 kWh), the midsize SUV is rated at 410/510 km NEDC range, respectively, so we can imagine 300/400 kms (180 / 240 miles) real-world range, which is a bit on the low side.

However, power and acceleration won’t be a problem, as the 544 hp and 0–100 km/h in 4.7 secs can show. 

With a striking design (inside and out), aluminium body, advanced driving aids, the “Nomi” AI system, and air suspension, this is certainly an impressive piece of kit, but with prices ranging from 358,000 to 498,000 CNY  ($52,000 to $72,500), this model might find it hard to win its spot in the market, as it is too expensive to go after the best Chinese competition — for example, the attractive BYD Tang EV goes the same distance (500 km NEDC), accelerates slightly faster (4.4 seconds), and starts at a much lower 260,000 CNY ($38,000) price tag. The foreign competition (Jaguar I-PACE, future Tesla Model Y…) show better specs and cachet.

Will the ES6 live up to brand expectations? With the ES8 cruising speed set at around 900–1,000 units per month, the ES6 threshold for success sits at around 8,000-9,000 units per month, a hard task indeed, but if they get 4,000 to 5,000 units per month, it should be enough to launch the ET7 sports sedan, possibly my favorite Chinese design, which resembles what a next-generation Tesla Model S could be.

Here are the sales charts again but with a bar for “others” added in: