Electric cars pass 60% of new vehicle sales in China

New energy vehicles reached 60.4% of new car sales in China in July. It is the first time the sixty per cent threshold has been crossed on a monthly basis.

The figure, reported by Caixin, conceals two opposing movements. Sales on the domestic market fell 23.6% against the same month last year. Exports of new energy vehicles, by contrast, rose 81.3%. The record share therefore owes much to the contraction of the internal combustion segment at home and to the pull of foreign demand.

In China the new energy vehicle category covers both fully electric cars and plug-in hybrids, a broader definition than the one used in European statistics.

Rising barriers

The international expansion of Chinese carmakers is meeting growing obstacles. Tariffs introduced by the United States and those decided by the European Union on electric vehicle imports have changed the appeal of certain destinations, and several producers have shifted volume towards South-East Asia and to European markets not covered by equivalent measures.

Switzerland applies no duties on cars and is therefore an open market for Chinese brands. In July, new vehicle registrations in Switzerland already put a Chinese brand near the top of the monthly ranking, an outcome that would have been unthinkable two years ago.

The effect on prices is the variable that matters most to consumers. A shrinking home market pushes manufacturers to place surplus production capacity abroad, which translates into aggressive pricing in countries that have not raised barriers.