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China vehicle sales plunge 48% but EVs strong as BYD gains -Breaking

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© Reuters. People stop by the BYD booth at an Auto Shanghai media day in Shanghai, China on April 19, 2021. REUTERS/Aly Song

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SHANGHAI, (Reuters) – China’s April vehicle sales plunged nearly 48% from a previous year. COVID-19 lockdowns struck factories and showrooms. However, sales of electric cars surged and Chinese brands surpassed global competitors.

Monthly sales volumes were the lowest in 10 years, highlighting the economic impact of tough Chinese restrictions in April.

China Association of Automobile Manufactuers’ (CAAM) Wednesday tally included sales to commercial and passenger vehicle dealers. Data released Tuesday by another trade association showed that the retail sales of passenger cars fell almost 36% in April.

According to the CAAM, global vehicle sales were down by 12% in the first 4 months of 2022, compared with the year before in the biggest market for cars in the world.

Sales of plug-in hybrids and electric cars – a segment China is supporting as “new energy necesities” – remained the bright spot. These are booming segments that made-in China brands dominate. The April sales of EVs/plug-in hybrids increased by 45% and were more than twice as high in the first four months of this year compared to 2021.

BYD, a Chinese brand, was the most successful, with a 164% increase in sales during the first four months, which included April, when Tesla (NASDAQ:) was hampered by supply issues.

BYD also produces EV batteries. This was 32% more than CATL who accounted 38%. Data from China Automotive and Battery Innovation Alliance revealed this.

BYD shares closed 8.3% higher. CATL shares rose 8%

According to data published Tuesday, Tesla sales dropped 98% and exports fell to zero in April. This was due to Shanghai’s lockdown, which disrupted logistical near the plant.

Elon Musk, Tesla’s Chief Executive Officer, stated Tuesday that he expects China’s COVID limitations to be less disruptive. He also said China would make up 25%-30% of Tesla’s overall sales over the long-term.

“I spoke with the Chinese government over the past days, and it is clear that the lockdowns have been lifted quickly,” he stated.

Private analysts and the CAAM stated that they expect production to pick up and demand will catch up over coming weeks due to April’s losses. Hundreds of cities had been in partial or full lockdown.

Daiwa Capital Markets stated in Tuesday’s note that it expects major automakers to “catch-up in the next months to make up the sales loss of April”, with normal production in Shanghai this month.

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