New-car sales in China dip for 4th straight month but EVs, hybrids make up half for July

Demand for new passenger vehicles in China has contracted for the fourth consecutive month in July, as weakened demand for fuel-powered vehicles more than offset the sales increase of electrified vehicles, according to the China Automobile Dealers Association.

In July, retail sales of new sedans, crossovers, SUVs and multipurpose vehicles industrywide dropped 2.8 percent year on year to below 1.72 million, the trade group said Aug. 8.

Last month, retail deliveries of fuel-powered vehicles plunged 26 percent to roughly 840,000. 

Meantime, demand for electrified vehicles stayed strong, with deliveries of full electric vehicles and plug-in hybrids jumping 37 percent to some 878,000, accounting for a record 50.7 percent of car sales, data from the China Passenger Car Association showed.

For the first seven months, new-car sales industrywide gained 2.3 percent to 11.6 million.

In the period, demand for fuel-powered vehicles fell 15 percent to some 6.57 million, while deliveries of EVs rallied 34 percent to approach 5 million, according to the association’s tally.

To stimulate demand for new passenger vehicles, Beijing on July 25 significantly raised trade-in subsidies it rolled out in late April.

The subsidy doubled to 20,000 yuan ($2,786) for consumers opting to buy a new EV to scrap old fuel-powered vehicles. 

For those purchasing fuel vehicles with engine sizes of 2 liters or below to replace old fuel vehicles, the subsidy was hiked to $2,000 from $975.

Reuters contributed to this report.