Plugin Vehicles Score 15% Market Share in China in July!

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Plugin vehicles continue to see record or near-record levels in China, having scored 231,000 registrations in July, only 4,000 fewer than the record set in the previous month of June, when 235,000 registrations were made. That pulls the year-to-date (YTD) tally to 1.3 million units, which is already more than this market had in the whole year of 2020. … And remember, we are still just at July.

Share-wise, July kept shares at record levels, hitting 15% (12% full electrics/BEVs). This pulled the 2021 share to 12% (9.4% BEV), and considering that the second half of the year is usually China’s strongest, we can now safely assume that the country’s plugin vehicle market share will end above the 10% 15% mark this year, and the total tally of the year will certainly exceed 2 million deliveries!

Looking at July’s best sellers, the biggest news item was the absence of the Tesla models, the first this has happened since December 2019.

Here are July’s top 5 best selling models in more detail:

#1 — Wuling HongGuang Mini EV

With 30,706 registrations last month, the tiny four-seater continues on a roll, winning another best seller title. If the little Wuling continues at this pace, a 400,000-plus score by the end of the year is likely for the small EV. With this kind of scale, it has been reported that the joint-venture has broken even with its small EV, which opens the prospect of exporting the little four-seater to overseas markets. The Wuling EV has become a disruptive force in urban mobility, a true EV for the masses, with the added bonus that the people buying it (mostly females, mostly under 35 years old) are usually a hard-to-capture audience. This EV is becoming a game changer, but like in every success story, one wonders about the impact that copycat models from the competition will make as they try to match the little Wuling and perhaps steal some sales away.

#2 — BYD Qin Plus PHEV

The BYD Qin has been a bread and butter model for the Chinese automaker for a long time, but in the last few years, it seems to have been impacted by the arrival of new, more competitive models. With this in mind, in 2018, BYD launched a new generation of its compact-to-midsize sedan, called Pro, but it failed to meet the success that the company was expecting, so early this year, it launched a refreshed version, the Plus. Surfing the wave of the Han full-size sedan’s success, BYD went all in with its slightly smaller Qin Plus. In the case of the PHEV version, this meant the launch of two versions, a lower priced one with an 8.5 kWh battery and 55 km (34 mi) of range on the NEDC testing cycle (which is overly generous), and a top-of-the-range version with an 18.3 kWh battery and best-in-class 120 km (75 mi) NEDC range. Something new in this new generation is that the internal combustion engine works mostly as a range extender, improving efficiency. The model refresh added to the new PHEV specs (and LFP batteries …) have transformed the career of BYD’s sedan. The PHEV version hit 9,127 registrations last month, allowing it to be July’s silver medalist. And if we were to add the BEV versions to the tally (#10 in July, with 5,342 units), the Qin Plus would have 14,469 registrations … which is already Tesla Model 3 territory!

#3 – Changan Benni EV

At the first view, compared with the Smart-like Wuling EV, the Changan basement offer (29,800 yuan, or less than 4,000 euros) feels much more substantial — 23 kWh battery, Toyota Yaris-like size, 5-seating capacity, and a trunk! But then you look at what you get for that price and … welcome to 2010 — bare-basics 2010. Hey, one cannot expect miracles, right? Moving on, Changan’s small EV was attractive enough to get 8,701 units delivered in July. The Changan EV is the largest model among the Wuling Mini-killers (similar vehicles that SGMW’s competitors are launching), but it is the most bare-bones model too. Overall, the Benni EV looks likely to keep its appeal among young urban families as well as carsharing companies and other fleets.

#4 — Li Xiang One

Li Auto, the Chinese startup living in the shadow of more media-friendly and fully electric NIO and Xpeng, has been selling its one full-size SUV with remarkable success, and in July it got another record performance (its second in a row), delivering 8,589 units. That allowed it to reach a podium position in its class, beating the BYD Han EV by 3,000 units. With such success, it would have been expected that the startup’s next step would be to follow the trend and go down market, with a smaller and, above all, cheaper model. But Li Auto is a sort of bad boy among Chinese EV startups — it doesn’t play by the rules (just look at the powertrain). Its next step is to launch an even bigger SUV (as if the 5-meter One model just wasn’t big enough…) in 2022. One can expect it to be a sort of Cadillac Escalade-sized land yacht with space for your better-half, kids, in-laws, dog, and whatever you can think of … and with range-extended technology. Will this strategy work? Who knows — few thought that its unique EREV powertrain would be successful, and yet here it is wearing the bronze medal. With a 41 kWh battery equipped with fast-charging capabilities, it is more efficient and has better electric range than its PHEV competitors, like the BYD Tang PHEV, but on the other hand, it is cheaper than comparable fully electric propositions, like the NIO ES8.

#5 — BYD Song Pro PHEV

The first BYD Song lived in the shadow of its Qin sibling, as it is well known the Chinese prefer sedans over SUVs, but in the last few years, higher riding bodies have become more popular. When BYD launched its second-generation Song in 2019, called Pro, which size-wise was between a compact and a midsize, it had great hopes for the vehicle, but it failed to meet the success that the company was expecting. So, early this year, it launched a refreshed version, with better specs (and LFP batteries), which transformed the career of BYD’s SUV. The PHEV version hit 7,085 registrations last month, its 3rd record score in a row(!), which means that the production ramp-up is still at full speed. And if we were to add the BEV version to the tally (2,605 units in July), the Qin Plus would have 9,690 registrations in July … which is almost Tesla Model Y territory (wait a minute, haven’t I written something like this before?…).

Looking at the remaining best sellers table in July, one can tell it was a near-record month, as 10(!) models had record performances. Besides the aforementioned BYD Song Pro PHEV and Li Xiang One, a mention also goes out to the record scores of the #7 XPeng P7 (6,054 units, 2nd record score in a row), #10 BYD Qin Plus BEV (5,342 units, 3rd record month in a row), #11 SAIC Roewe Clever EV (5,202 units), #13 Hozon Neta V (4,469 units), #14 Leapmotor T03 (4,283), #19 Weltmeister EX5 (3,373), #20 Letin Mango EV (3,243), and … the VW ID.4, in #16, which finally got a top 20 standing thanks to a record 3,867 registrations. Is the VW crossover here to stay, or will it be swallowed by the feverish growth of the market?

Speaking of feverish growth, of the 7 models in the top 20 belonging to Chinese EV startups, 6 had record months, 3 of them (Li Xiang One, XPeng P7, and WM EX5) for the second month in a row, while one, the LeapMotor T03, has scored 3 record performances in a row! Chinese EV startups are clearly growing fast and gaining scale, as these 7 models alone represented 15% of all plugin registrations last month, which is already more than what the market leader, the Wuling Mini EV, had.

But this month wasn’t only about startups and record scores. BYD posted a strong showing in July, with 6 models in the top 20. Its midsize SUV Tang PHEV scored 3,892 registrations, its best result since March 2019, while the recently refreshed (including new blade battery) compact crossover Yuan EV had its best performance in 25 months, with 3,785 deliveries. So, the Shenzhen automaker is boisterous across its range, from the lower end (Yuan) to the upper end (Han).

And expect both ends to be reinforced. The cost-competitive Dolphin is looking to disrupt the compact/subcompact side of the market soon, while on the other end, BYD is expected to launch the all-mighty Ming SUV in 2022, a full-size SUV coming in two versions, a family-friendly 7-seater body and an SUV-coupé body. Adding in the current success of the category leader BYD Han (60,000 units so far in 2021) should propel BYD’s full-size sales to over 150,000 units/year. So, Tesla and the legacy OEMs will have their work cut out for them if they want to beat BYD at the higher end of the market.

Speaking of Tesla, numbers were (surprisingly for some) low in July, especially in the case of the Tesla Model Y, which had its lowest score (2,397 units) since February. And of course, this was enough for the two sides of the Tesla cult to go after each others, with the believers side saying that this only means that production output of both models is now working in regular Tesla fashion (weak 1st month of the quarter locally in order to focus on exports, 2nd month more balanced, and 3rd month focusing on nearby deliveries), while the shorters side claims this shows that the demand cliff in China is real.

Well, like most things Tesla, both sides of the fence are wrong (or right, depending on how you see it). While it is true that this result is exceptionally low, it shouldn’t be repeated anytime soon. There are reasons for this — not only that production of both models is now in Tesla mode (see paragraph above), but also that the upcoming SR version of the Model Y has dominated new orders (there are rumors that 70% of new Tesla orders in China are for this version), creating a waiting list that will surely provide several thousand deliveries in the next two quarters.

On the other hand, the fact that the Tesla Model Y is already in Tesla mode, added to the fact that Tesla decided to launch the SR version only in China, says a lot about current demand dynamics. On one hand, Tesla demand in North America is flaming hot, causing the automaker to increase prices and focus Fremont (and upcoming Texas) Model 3/Y production on the domestic market, even leaving the Cybertruck for later (besides the battery issues, there just won’t be enough space in Giga Texas for the Cybertruck’s predictable slow ramp up this year). On the other hand, Tesla’s demand in China seems to have flatlined, especially in the case of the Model Y, leading to the launch of the cheaper Standard Range version of the Model Y in China. This is also presumably one reason why Tesla is exporting Shanghai units to other markets, like Europe and Australia, and freeing space in Fremont for local demand. Tesla has jumped to supplying the much-awaited Tesla Model Y to EV-hungry Europe from China now that the German Tesla units are only expected in 2022. (Side note: I always thought it was a mistake to make Europeans wait for Giga Berlin in order to get the Model Y, as I also think it is a mistake not to make the Model S/X in China). It’s also relevant that Tesla is providing Australia and other markets with Model Y units earlier than was expected.

In a way, one could say that lower demand in China was good for Tesla buyers outside of North America, as it allows them to avoid the increasingly long waitlists (and rising prices) that North American Tesla buyers are now experiencing. And it helps those buyers, for that matter, to not have to wait even longer while some US-produced units are exported.

And an interesting factoid: the Tesla Model 3 actually scored approximately the same number of deliveries in April as in July, allowing it to be the runner-up then, but now the same amount of units only made it #6 in the table. What changed? The competition has caught up. …

But back to China’s sales in July. Below the top 20, we should mention the production ramp-up of several models, like the #21 GAC Aion Y (3,109 registrations in its 4th month on the market). The compact MPV (Yay! MPVs rule!) seems destined for higher places and should join the table in August. In addition, Geely’s Emgrand EV, once a familiar face in the table, is getting its mojo back, registering 3,068 units, its best score since June ’19. Also, we have yet another BYD looking to join the table, as the Song Pro EV scored a record 2,605 registrations and should join the table soon.

Finally, a mention goes out to yet another Chinese EV startup, Lingbao, which is starting to get some traction with its small and quirky BOX, a mix between a Mini Cooper EV, Honda E, Fiat 500L, and a Japanese Kei Car that has delivered 2,605 units, scoring its 5th(!) record in a row.

While Chinese brands are present across several automotive categories with competitive models, it is in the city car category that I see them owning the market on a global level. Japanese automakers are in EV denial, Indians are still taking baby steps into EVs, and Europeans are leaving the cheap & cheerful end of the EV city car market in order to focus on the more premium end of the category (Fiat 500e, Mini EV, Smart EV). Expect Chinese automakers to rule the city car category globally once the electric transition is done.

Looking at the 2021 ranking, the top positions remained the same. The first position change only came in the #5 spot, with the ever rising Li Xiang One climbing two positions.

With the full-size category leader, #4 BYD Han EV (now you see why I think it is a mistake not to make the Model S/X locally?), fewer that 6,000 units away, expect the big SUV to pressure the BYD EV in the race for the category title.

Also rising two positions is the Changan Benni EV, now in #6, having surpassed the Ora Black Cat in July.

In the second half of the table, things were a tad more interesting, with the small Leapmotor T03 climbing to #15. Another startup model, the Hozon Neta V, rose to #13.

We also have a new face in the top 20! The BYD Song Pro PHEV joined the table in #16 — and expect it to climb a few more positions (top 10?) soon.

Just outside the top 20, we have another BYD on the verge of showing up on the table, with the Qin Plus EV in #22, some 1,000 units behind the #20 BYD e2, and fewer than 100 units from the #21 Great Wall Good Cat. So, we might have a 6th(!) BYD model in the top 20 soon….

Looking at the automaker ranking, the SGMW joint venture (17%, down 1 percentage point) is in the leadership position, but it is losing charge. Below it, BYD (15%, up 1 point) is on its way up, ahead of Tesla (11%, down 1 point). The Shenzhen automaker now has its eyes set on recovering the leadership position and winning its 8th title.

Funny enough, the current 2021 podium is exactly the same as the 2020 one. Will it stay like this until the end of the year?

Below the podium, SAIC (7%) is stable in 4th, followed by #5 Great Wall (5%) and a number of automakers with 4% share.