China’s new energy vehicle sales fall 38.8% in Jan m/m, first such drop since Aug

BEIJING (Reuters) – China’s new energy vehicle sales fell 38.8% versus the previous month, the first such drop since August 2023, industry data showed, as demand faltered in the world’s largest auto market despite a renewed discounting push led by Tesla.

Vehicle sales, including those exported, totalled 2.44 million units, up 47.9% from a year earlier and down 22.7% from December, according to data from the China Association of Automobile Manufacturers (CAAM).

New energy vehicle (NEV) sales, accounting for 29.9% of total sales, grew 78.8% on year in January, the data showed.

CAAM data tracks automakers’ sales to dealers and includes commercial vehicles such as trucks unless specified.

Last January, passenger vehicle sales in China plunged 37.9% on year and slumped 40.4% on month, the worst performances for January since the 2000s, according to the China Passenger Car Association (CPCA), as subsidies and tax cuts ended. The sales then were also hit due to shortened business days as the week-long Chinese New Year fell in January last year.

The lukewarm start to 2024 for China’s auto market highlights tepid consumer demand in the world’s No.2 economy amid a protracted housing downturn and a market meltdown.

In the face of slowing demand and rising competition, Tesla slashed prices on some Model 3 and Y cars in China in January and offered cash discounts for some Model Ys from Feb.1, reversing five upward adjustments since late October.

Tesla lowered the starting prices of the basic versions of Model 3 and Y by 6% and 3%, respectively, in January, versus November when it raised their prices, Reuters calculations show.

(Reporting by Qiaoyi Li, Zhang Yan and Sarah Wu; Editing by Himani Sarkar)

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