China EV Sales Rise on Government Subsidies, Inventory Buildup

By Jiahui Huang

Chinese electric-vehicle makers reported stronger sales and deliveries in August, thanks to Beijing's expanded car trade-in program and auto dealers building inventories for the September and October peak season.

BYD sold 373,083 units last month, 36% more than a year earlier, which analysts attributed largely to higher demand for models with upgraded hybrid technology.

Li Auto's August deliveries rose 38% to 48,122 units, an increase Citi analysts said in a note was due to continued robust sales of the L6 model.

Zhejiang Leapmotor Technology set a new monthly record with 30,305 units delivered, entering the 30,000-unit monthly sales club, while Huawei-backed Seres sold 36,181 units in August, a more than fivefold increase from a year ago.

XPeng delivered 14,036 units for the month, NIO delivered 20,176 vehicles--the fourth straight month that monthly deliveries exceeded 20,000 units--and Zeekr Intelligent Technology delivered 18,015 units, up 46%.

Xiaomi said on its Weibo account that its August deliveries reached more than 10,000 units.

Shares of Chinese EV makers were broadly lower in Hong Kong afternoon trading, following losses in the broader market. NIO led the declines Monday, falling 5.5%, while Li Auto shed 4.5%. BYD fell 3.0% and XPeng lost 0.2%. Leapmotor jumped 4.9% after record-high sales.

Analysts said the strong August sales were largely in line with market expectations and driven mainly by the government's more aggressive trade-in program.

BYD's and Leapmotor's sales increases from July show that the trade-in program is having a positive impact on the industry, Nomura analyst Joel Ying said. The auto inventory buildup for the coming peak sales period also likely supported sales in August, he said.

Chinese EV makers have cut prices extensively since the start of the year and offered various promotions, even as the government rolled out incentives to boost vehicle consumption.

In July, the Chinese government doubled trade-in subsidies for replacing old passenger cars to a maximum of 20,000 yuan, or about $2,820. That month, sales of EVs and hybrids in China surpassed those of conventional cars for the first time.

"Entering into [the] peak season of sales, with quite a few new models launched and more promotion expected," sales will likely improve sequentially in the following months, Nomura's Ying said.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

September 02, 2024 02:02 ET (06:02 GMT)

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