(Yicai Global) Nov. 8 -- China’s new energy vehicle sales are exploding thanks to a halving of the car purchase tax, better supply and the anticipation of rising fuel prices, and as a result they are eroding the market share held by fossil fuel-powered autos, according to the latest data.

NEV passenger car sales surged 75.2 percent in October from the same period last year to 556,000 units, accounting for 29.4 percent of all passenger car sales in the country, according to the China Passenger Car Association.

While those for gasoline-powered vehicles sank 8 percent last month from a year ago to 1.28 million autos, reversing the 6 percent year-on-year growth achieved in the third quarter, the association said. Overall passenger vehicle sales jumped 7.3 percent to 1.87 million units.

As NEV makers like BYD Auto, Tesla and SAIC-GM-Wuling get bigger, the economy-of-scale effect becomes larger, meaning that NEVs are getting cheaper to make, said Cui Dongshu, secretary general of the association. By contrast, the cost of manufacturing a conventional petrol-powered car has increased.

Fifteen companies sold more than 10,000 electric cars in October. BYD remained leader of the pack shifting 217,518 units, followed by Tesla with 71,704 autos and SAIC-GM-Wuling Automobile with 52,086 units.

Exports surged 42 percent from a year ago to 270,000 units, 39 percent of which were NEVs, according to the association.

While first-time car buyers might opt for fossil fuel-powered vehicles, people who are looking to upgrade will usually choose an electric auto, Cui said. There are plenty of low and middle-income people who have yet to buy their first car and policies should be more supportive of gasoline-powered cars.

Editor: Kim Taylor