Stock take: China EV Sales 2021

China's plug-in EV market saw an 154% increase on sales compared to 2020

While the UK’s plug-in electric vehicle market grew by a laudable 74% in 2021, growth of the same segment in the world’s largest car market more than doubled that percentage increase. Official figures from the Chinese automotive industry reveal that, last year, electrified vehicle sales saw a staggering 154% increase on 2020. But what’s behind the numbers and who were the main winners and losers in the clamour for plug-in EVs?

Let's start with some cold, hard facts from the data.

· In China, where both battery electric vehicles and plug-in hybrid electric vehicles are classed as ‘New Energy Vehicles (NEVS), total sales of NEVs topped 3.3 million units, just over half of all such sales globally
· One car, the Wuling Mini EV, driven on these pages in December, made up around 12% of those sales alone
· BYD, the market leader in electrified vehicles, sold over 600,000 NEVs
· BEVs made up 15% of all car sales in China, with PHEVs taking the total NEV market to 19%

That last figure is a significant one for the Chinese authorities since their initial goal, for NEVs to make up 20% of all new car sales by 2025, is already within touching distance four years ahead of schedule. In fact, it’s important to recognise that 2021’s astonishing figures have their roots in more than a decade of investment and subsidies that have developed a homegrown industry of automakers, battery suppliers, and infrastructure, totalling in excess of $70 billion (£51.5 billion).

But 2021 sales were less a result of government subsidies than in any previous year, since while the Chinese government delayed their planned EV subsidy removal in 2020, it was still cut by a significant 30% in 2021.

Instead, Chinese consumers have been cashing in on a perfect storm of EV excitement, number plate restrictions in the largest cities for ICE vehicles, an increasingly diverse and capable choice of products, and homegrown brands that for the first time are considered on a par with their imported competitors.

“Chinese consumers are increasingly more open to new energy vehicles from several aspects, not only because EVs have reached a maturity in terms of technology and convenience that is on parity with ICE vehicles, but also because new EV brands now offer service that exceeds that of existing premium and luxury brands,” said Ashley Sutcliffe, PR Director at Geely Group, who launched their own premium EV brand, Zeekr, late last year.

Zeekr is just one of many EV offshoots from established Chinese automakers, including the likes of AVATR, launching in 2022, as well as Aion, Voyah, Ora, and many more. The last of those, Ora, aims to begin sales on UK shores in 2022 in a sign that confidence is blossoming in the Chinese auto industry.

However, it’s not just China’s legacy automakers that are getting in on the act. Homegrown EV-only start-ups NIO and XPENG, both now present in Norway and planning further European expansion in 2022, also saw significant sales increases in 2021. NIO, whose ES6 mid-sized SUV claimed 19th place in the best-sellers list for 2021, saw a full year sales increase of 109.1%, while rival XPENG, whose P7 saloon took 13th in the overall list, boosted sales by a market-beating 263%.

*For Autocar Business webinars and podcasts, visit Autocar Business Insight*




Speaking on the wider NEV market success in 2021, Brian Gu, Vice Chairman and President of XPENG, said: “What has really moved this penetration rate is the availability of very good, smart EV products coupled with broader customer awareness and acceptance, and also Chinese user behaviours that are always embracing new products.”

When considering XPENG, it’s worth noting that colleagues working in R&D make up more than 40% of their workforce, “over 4,000 employees, more than twofold our staffing at the end of 2020”, adds Gu. XPENG also claims to be the only global auto brand other than Tesla to make their technology 100% in-house. A former Tesla employee once claimed that “Tesla is not an automotive company, it's a tech company that builds cars,” and it’s this tech-driven focus in the native EV brands that is capturing the attention of young Chinese consumers who no longer see legacy brands as the must-have item.

“Fifteen years ago the logo sold the product, but many people are now proud and happy to get into a NIO or an XPENG,” says Tu Le, founder of Sino Auto Insights, adding that, “Digital natives are much more receptive to local domestic brands than their parents.”

For all the hype around local EV brands, it’s worth noting that Tesla itself claimed second and third spots in the EV sales charts behind only the Wuling Mini EV, with both the Model Y and Model 3 selling over 120,000 units apiece. But while Tesla flew the flag for foreign brands in China, there was less love in the market for VW’s new ID-series models, which had a slow start but have gained momentum.

VW forecast a conservative estimate of 80-100,000 ID series sales for 2021 but unofficial figures for the full year have fallen way short at around 67,000. This couples with a sizeable fall in sales of domestically-produced cars, down from an average of 264,495 units per month in the second half of 2020, to just 174,384 in the five months leading to December 2021. 2022 will be a critical year for the brand’s EVs in China, especially with new competition from fellow foreigners Ford and Cadillac with their Mustang Mach E and Lyriq SUV.

No analysis of the 2021 figures would be complete without recognising the incredible impact of the Wuling Mini EV. Launched in mid-2020, the car has allowed young Chinese consumers onto the road like nothing else since the Beetle or Model T. Spurred on by a 35,000 RMB starting price (just over £4,000), almost 400,000 Mini EVs found a home in China in 2021 and they have proven especially popular with women under 35 years old, a difficult market to capture. A mind-boggling array of customisation options, and a soon-to-be-launched cabrio version, have sustained intense interest throughout the product’s lifecycle. “The Wuling Mini EV is the little train that could. It started off really hot and hasn’t slowed down. It’s almost a transactional buy since it’s so cheap”, says Tu Le.

“People forget that there are still hundreds of millions of Chinese people who live in cities lower than tier 2,” Tu Le adds, referring to the unofficial hierarchy of Chinese cities which is based on GDP, politics, and population. Only five cities, Beijing, Shanghai, Guangzhou, Tianjin and Chongqing, are considered tier 1 cities, while a further 30 cities make up tier 2, according to South China Morning Post. In total, more than 160 cities in China house over 1 million inhabitants, and the Mini EV has found a clear route into the hearts of many.

Industry experts predict that in 2022 demand for electrified vehicles in China will continue to intensify and sales could reach just under six million units, but the China Passenger Car Association (CPCA) has sounded a note of caution due to the ongoing shortage of key components needed in EVs. They foresee supply only being adequate for the production of four million ‘NEVs’ in China, and said: “The shortage of automotive chips that had hindered the growth of the car market has yet to ease. The best selling models still need chips to reinforce their production and get their backlog of orders executed.”

If there is one thing we can count on, however, it’s that the choice of increasingly competitive electrified vehicles in China will only continue to expand in 2022.

Mark Rainford