Sales of electric vehicles in China are back in full swing after a phase of stagnant growth. Domestic manufacturers of electric vehicles are also becoming more serious competitors: After decades of fighting for foreign combustion engine know-how, China has a real opportunity to turn foreign brands back into the electric age.
Warren Buffett-backed EV maker BYD on Friday reported a 54% increase in sales for the first six months of this year, but net income saw a 29% decrease. Rising raw material prices and a shortage of chips increased costs, but are also likely to post fewer profits from the sale of medical masks compared to the same period in the previous year. BYD built mask production lines in February 2020 and produced millions of masks in one phase every day.
This year, the company’s focus is once again firmly on familiar territory. BYD sold around 200,000 new energy cars – including plug-in hybrids – in the first seven months of this year, 28% more than in the same period in 2019. And it launched three new hybrids with its own technology called DM-i . These have sold well: plug-in hybrid sales in the year to date up to July were 58% higher than in the same period in 2019.
Chinese rivals Li Auto and Xpeng, which are more focused on higher-end segments, both reported record shipments in July. New Energy passenger car sales more than doubled in the first seven months of 2021 compared to two years.
According to the China Passenger Car Association, new energy car penetration was 14.8% in July, compared to 5.8% in 2020. Electric vehicle adoption is likely to be even higher in major cities as electric vehicles benefit from looser license plate restrictions. China’s largest cities are capping the number of license plates to tackle traffic jams and pollution.
