Chinese local media were trying to accentuate the positive when they reported that China’s new energy vehicle sales rose 10-fold in the first 4 months of this year. (Chinese article) That figure caught my attention, but then I read further into the reports and saw that even after the huge jump just 10,000 new energy vehicles were sold in China in January through April, averaging a meager 2,500 per month.
Adding further gloom to the picture, the vast majority of vehicles were purchased by fleet operators of taxis and buses. Within the larger figure, half of all sales were for buses, while another 40 percent were for taxis. Only 1,000 vehicles sold in the first 4 months were for consumer-use plug-in electric models. That doesn’t bode well for the mass consumer market, which will need to improve significantly for China to meet its ambitious goals for new energy vehicle sales.
The electric vehicle (EV) market has received some good news in the last few months, mostly from US hotshot Tesla (Nasdaq: TSLA), which has energized the sector with several sharp publicity campaigns and other new initiatives to popularize its technology. (previous post) But Tesla’s cars are squarely aimed at the very high end of the market, and its initiatives are unlikely to boost the broader market where mainstream consumers are still highly skeptical of the technology. These latest figures show the industry isn’t going anywhere quickly in China, and it could still be years before the market finally starts to take off.
Bottom line: New energy vehicle sales figures for the first four months of 2014 show electric cars continue to struggle to find an audience.
Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.