(Yicai Global) Feb. 14 -- Sales of new energy vehicles in China plummeted at the start of this year. Car companies were unable to make pricing plans based on the 2017 subsidy policy, as it was unveiled late in the game.
The new subsidy policy for NEVs was not revealed until December 30, which caused issues for automakers that took a wait-and-see approach on pricing. Only 5,400 NEVs were sold in China in January, marking a 61 percent decline from last year, according to manufacturers' data from the China Passenger Car Association. BYD Co. [HKG:1211], the country's leading NEV brand, only sold 605 cars last month. BYD's plug-in electric hybrid vehicle 'Tang' sold 4,012 units alone in January 2016.
The delay in the new energy subsidy policy greatly disturbed January NEV pricing, a BYD employee said. Without policy details available, contracts failed to be executed. BYD had intent orders for thousands of new energy commercial vehicles, and posted single digit sales numbers in the segment last month.
Without subsidy specifics, it is difficult for car companies to appropriately arrange manufacturing, said Cui Dongshu, secretary of China Passenger Car Association. As the particulars have been unveiled, the NEV market is expected to be on track in February, and the sales volume for the year is projected to reach 750,000, Cui said.
The major trend of encouraging new energy development will not change, said Gao Xiaobing, vice president of Shenzhen Gaogong Industry Research Co. He forecasts the sales volume of NEVs this year will be about 750,000 to 800,000.
The NEV market is small and has room to grow, an industry insider told Yicai Global. Growth will probably be more stable than it has been in the past two years, she said.
Some 507,000 NEVs were sold in China last year, marking an increase of 53 percent from a year earlier and shy of the forecasted 700,000, data from the China Association of Automobile Manufacturers shows.