Plugin vehicles in China once again ended the year with a record month, growing by 83% year over year (YoY) in the last month of the year to a record 671,000 units. Interestingly, full electric vehicles (BEVs) had a slow month, growing just 13%, to 471,000 units. They were responsible for 70% of the plugin market in December, below the 74% average of 2022. This is explained by the fact that in the beginning of 2023, PHEVs lost access to incentives in a number of cities, causing localized surges in PHEVs at the end of the year. Expect BEVs to strengthen their prevalence compared to PHEVs in 2023, pulling the BEV share of plugins again back to 80%+.
It seems the time for crazy fast growth in the Chinese plugin market is coming to an end, because December’s 32% plugin growth rate is well below the 2022 average of 83%. And this is also replicated in the BEV field — last month’s 13% growth rate is its lowest in over two years.
Looking back, the plugin share progression is nothing less than astonishing. At the end of 2020, we were celebrating a record 6.3% (5.1% BEV) market share, followed by 15% (12% BEV) in 2021. Now we’re at 30% (22% BEV).
Then again, with the plugin share already at 30% in 2022, and with full electrics (BEVs) alone accounting for 22%, this slowdown in growth rate was bound to happen.
If Chinese OEMs wish to continue doubling their sales, as many have been doing so far, there is one way to do it: exports.
Still, if electrification stabilizes at around 33% growth rates, expect the plugin share in 2023 to be at some 40% in a year from now, with BEVs owning close to one third (~29%) of the Chinese market! And expect BEVs to cross the 50% share threshold by 2025! Imagine that: the largest automotive market in the world being BEV-based in two to three years time!
Top Selling EVs in China — December 2022
Looking at 2023, with subsidies now out of the picture, organic demand is what is pulling the market up, so expect disruption to continue in 2023 in the largest automotive market in the world.
Regarding December 2022, there were no real surprises in the best sellers list. The BYD Song (BEV+PHEV) won another best seller title, followed by the tiny Wuling Mini EV, the Tesla Model Y, and the small BYD Dolphin. Here’s more on December’s top 5 best selling models:
#1 — BYD Song Pro/Plus (PHEV+BEV)
The rise and rise of BYD’s midsize SUV is remarkable, with constant record performances from both versions, and December was no exception, with the PHEV reaching 61,878 registrations last month while the BEV version had 8,391 registrations. It thus proved the production ramp-up was still in motion. Was December peak Song? Probably. On one hand, the Song was by far the best selling model in the overall market in December, so the natural laws of the market will start to play against it. On the other hand, the internal competition, like the just landed Frigate 07 PHEV (1,805 registrations in December) and upcoming Sea Lion, BYD’s real Tesla Model Y competitor, will start to make a dent in Song customer demand. That is already visible with the Song’s sedan counterpart, the Qin Plus, which recently started to lose sales to a couple of younger siblings, the Destroyer 05 PHEV and Seal sedans.
#2 — Wuling HongGuang Mini EV
A big name for a small car, the Wuling EV scored 34,523 registrations last month. Expect the tiny four-seater to continue competing for a podium position throughout 2023, as it is one of the cheapest EVs on the market. The SAIC–GM–Wuling joint-venture model has created its own vehicle class (4 seats in a car that is only a tad larger than a Smart Fortwo EV). This EV is a game changer in China, as proven by the multiple tiny EV models that SAIC’s direct competitors have been popping out. This “little EV that could” has already made its name in automotive history.
#3 — BYD Han (PHEV+BEV)
BYD’s flagship model had 30,043 registrations in December, with the BEV version hitting a record 13,438 units. One of the most competitive EVs on the market, the big BYD sedan is a regular in this top 5 thanks to competitive pricing and specs. With some 270,000 units being sold worldwide in 2022, it will be quite possibly the first plugin model in the full size category able to go head to head, sales wise, with the category overall leader — the Mercedes E-Class. Will the big BYD surpass the 300,000 unit mark in 2023?
#4 — Tesla Model Y
The bread and butter model of the Tesla family had 29,387 registrations last month, placing it 4th in the plugin market. That’s a somewhat disappointing performance, especially in an end-of-quarter month — which probably contributed to the automaker’s decision to lower prices in the beginning of 2023. With the new price cut and looking at 2023’s sales performance, expect it to continue growing throughout the year, possibly ending around the 400,000 unit mark. Of course, more than cutting prices, which has a limited effect, a thorough refresh of both the Model Y and Model 3 would help them to stay competitive — especially the latter, which has been bleeding sales lately.
#5 — BYD Dolphin
BYD’s poster child for accessible electric mobility (at least until the smaller Seagull lands) was 5th in the table, with 26,074 registrations last month. Looking at the whole-year sales performance, deliveries north of the 200,000 unit mark, it got a respectable score, especially considering small/compact hatchbacks aren’t really a thing in China. Expect the 2023 performance to improve on the current numbers, ending at around 250,000 units by year end. However, BYD’s domestic market isn’t really the hatchback’s main mission for 2023. The focus targets for the space-efficient hatchback will be export markets, especially those in Southeast Asia and Europe, and it wouldn’t even be surprising if BYD starved its home market of Dolphins in order to deliver them overseas (in the case of overwhelming demand for the model).
Looking at the rest of the December best seller table, in a record month it would be natural that several models hit best ever scores, and so they did. Besides the ones already mentioned, we should also highlight the #8 BYD Tang midsize-to-large SUV. Consolidating its case as another success story for BYD, it had 20,164 registrations, with both the PHEV and BEV versions scoring record results. The #9 BYD Seal (15,378 registrations) also deserves a callout, with the midsize model continuing to ramp up production as it aims to reach more than 300,000 units in 2023. In #10 we have the GAC Aion Y, with 14,311 registrations. The compact MPV (did I ever mention I love MPVs?) continued to ramp up in China, helping GAC’s success story based on its dynamic duo, the Aion Y and Aion S.
Another Chinese automaker with reasons to celebrate in December was Changan, which saw its two models in the table hit record performances in December. The cutesy Lumin ended in #12 with 13,757 registrations, while the midsize Shenlan SL03 was #14, with both BEV and PHEV versions reaching record performances for a total of 11,650 registrations.
Elsewhere, Geely’s Zeekr 001 fastback reached 11,337 registrations, its sixth record performance in a row, and with exports said to start in 2023, we could see it compete for #2 in the global plugin full size category, along with the BYD Tang. Dongfeng’s E-Series continued racking up taxi sales, reaching a record 9,075 units in December, while the BAIC EU-Series showed that it is still alive by scoring 8,840 registrations, its best score in 3 years!
But the highlight in the second half of the table goes to Li Auto’s two behemoths large SUVs. The Cadillac-Escalade-like L9 climbed to #16 with a record 10,582 registrations, while the slightly smaller but still full size L8 was #17, with 10,189 registrations, in what was only its second month on the market. Will such impressive performances continue in 2023? No one really knows. I was expecting the L8 to cannibalize L9 sales, but apparently there’s enough market for both. The slightly smaller but still full size L7 (it’s basically the 5-seat version of the L8) lands in February, so demand limits for these land yachts will again be tested, but if Li Auto can pull 30,000 registrations/month out of these three full-size models, then the Chinese startup is on to something and can disrupt the full size market — not only in China, but also globally. Oh, and sometime in 2023, they still expect to launch the midsize L6….
Outside the top 20, there were a few surprises last month, like the new BMW i3 (not the stormtrooper hatchback, but a China-only BEV version of the current BMW 3 Series) scoring a record 6,140 registrations, a new record not only for the model but for any BMW plugin in China. So, it seems the Bavarian automaker has found its much needed star player for this market. Geely’s Maple Leaf 60S, which is basically an Emgrand EV sedan but equipped with battery-swapping capabilities, also reached a record 5,688 registrations, while Chery’s more hip and upmarket brand, Jetour, saw its Dasheng PHEV compact crossover hit an amazing 8,399 registrations in only its 3rd month on the market. Have we found another candidate for a top 20 position?
Another model that will surely strive for a position in the table is the Denza D9, which reached 6,002 units in only its 3rd month on the market. Expect the big MPV from BYD’s premium arm to show up in the top 20 sooner than later.
In the EV startup section, we should mention the record 7,594 units of NIO’s ET5 midsize sedan. The stylish EV did its best to provide the volumes and scale that NIO so desperately needs.
Top Selling EVs in China — January–December 2022
Looking at the 2022 ranking, the BYD Song is the 2022 best seller, succeeding the Wuling Mini EV. The Song ended with more than 50,000 units above the runner-up, the aformentioned Wuling EV. This is the first time since 2016 that a BYD model topped the model chart in China, with the honor at the time going to the BYD Tang. This is also the 4th BYD model to win the best seller trophy, after the e6 (2012), Qin (2014 & 2015), and Tang (2016).
The Tesla Model Y surpassed the BYD Qin Plus in the last stage of the 2022 race, placing the Tesla crossover on the podium.
Still, with six models in the top 8 positions, BYD had a lot of reasons to open the champagne. It won every size category except the city car category, which went to the groundbreaking Wuling Mini EV. The BYD Dolphin won the B-segment/subcompact category, the Yuan Plus took the C-segment/compact prize, the Song won D-segment/midsize, and the Han won the higher level full-size category.
Yep, full size plugins are already scoring close to 300,000 registrations on a yearly basis. Hear that, Mercedes? (That EQE needs to be ramped up significantly if the German model wants to remain king of this category.)
Still on the topic of BYD, with the small Seagull landing soon, will the Shenzhen automaker have a shot at winning the city car category in 2023? Well … I don’t think so. There’s so much going on in the brand’s lineup in the categories above that I do not expect BYD to prioritize the Seagull production ramp-up. But in 2024 … who knows?
Elsewhere, the Changan Benni EV was up three positions, to #12, but this had more to do with other models demerits, with Chery and Hozon experiencing unexpected (COVID-related?) slow months.
Finally, the Volkswagen ID.4 ended the year climbing to #16, one position above the 2021 position. One wonders: Is this the new normal for the German OEM — its best selling model being only #16 on the table? But more on this below.
Auto Brands Selling Most EVs in China — 2022
Looking at the brand ranking, BYD revalidated its 2021 title in 2022, but with a much higher market share (30.9% vs 18% in 2021), winning its 9th title comfortably. Meanwhile, a slipping SGMW ended in 2nd (8%, down 6 points compared to 2021), followed by Tesla in the last place on the podium (7.4%, down 2.6 points compared to 2021).
Off the podium, GAC (4.6%) won the 4th spot with some ease, while Changan (3.9%, up 0.1 point) surpassed Chery (3.8%, down 0.3 points) and ended the year in 5th.
Worthy of notice is that Geely was 7th, with 3.7%, having risen 0.2% compared to November. 2023 could be the breakout year for the make, something that cannot be said about Volkswagen, which ended the year with just 3.2% share, down from 4% in 2021. (So, instead of improving its score, Volkswagen went down even further….)
Automotive Groups Selling Most EVs in China — 2022
By automotive group, the big winner was BYD (31.1%), replacing a falling SAIC (10.5% now vs 19%in 2021) as “top dog” in China.
BYD shouldn’t have its leadership contested anytime soon, ruling the Chinese market with an iron fist. The Shenzhen automaker is now more worried about overseas markets than its home market. After all, it was already #3 in the overall Chinese auto market in 2022. So, the ceiling is starting to come close, leaving little room for significant growth in China.
As for SAIC’s runner-up spot, it could be stolen in 2023 by either Tesla or Geely–Volvo. On one hand, one cannot see how SAIC can stop the bleeding in its domestic market. (Ironically, SAIC is becoming stronger in overseas markets at the same time as it becomes weaker in China.) On the other hand, #3 Tesla (7.4% in 2022 vs. 10% in 2021) is holding on better during BYD’s takeover of the market. Meanwhile, #4 Geely–Volvo continues to grow, having ended the year with 5.7% share, a 0.2% rise over November. We could see a moment when SAIC could be surpassed by both Tesla and Geely–Volvo. It will all depend on how much share SAIC will lose in 2023…. #5 GAC (4.9%) took the last place in this top 5, with a comfortable advantage over #6 Chery Group (4.1%) and new #7 Changan (4%).
As for Volkswagen Group, things are going from bad to worse. The German conglomerate was 5th in 2021, which wasn’t a very commendable position for the consistent leader of the overall market, but 2022 was even worse — it ended the year in … 9th! It had just 3.7% share of the market!
Despite all the headwinds that the German conglomerate is now facing, this discrepancy — #1 in the overall Chinese market, but just #9 in the fast growing plugin market — should be the #1 concern of Volkswagen Group management. The fact that Tesla is eating Audi’s midsize category cake is concerning, as is the fact that the VW Golf lost the European Best Seller title in the overall market for the first time in 14 years (to the Peugeot 208). The eroding market share of Volkswagen Group in Europe is one thing, but nothing is more concerning than China’s progressive disenchantment with the German conglomerate.
How will the German OEM overcome this life-threatening situation? I guess we will see how it plays out this year. But one thing is certain: the window is closing….
Oh, the same goes for the #2 make in China on the overall market: Toyota.
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