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A quick review of the numbers: Passenger vehicle sales rose 9.5% in October from a year earlier, and have grown every month since May. Green cars, like hybrids and pure electrics, are standouts: Sales are up more than 50%. Stock prices for companies like BYD Co. and NIO Inc. have more than doubled this year. New model launches have boosted sentiment as local automakers incline toward carbon-free. Beijing wants such cars to account for 20% of all sales by 2025.
There’s no doubt that the path is toward a greener future, where electric cars and even more expensive hydrogen-powered vehicles dominate. But here’s the reality right now. Gasoline-powered auto sales are rising, too, around 6%, with 1.9 million manufactured domestically sold in September. 1 This segment accounts for around 90% of passenger cars sold monthly in the world’s largest market, where over 20 million autos were sold last year. Sport utility vehicles and other traditional-engine models that were beginning to find favor pre-slowdown aren’t seeing a big rebound yet.
Electric car sales – though surging – are rising from a low base and the numbers are small relative to the size of the market, with around 160,000 green autos sold in October. Commercial and passenger new energy vehicles more than doubled last month from a year earlier. However, for the 10-month period, they fell 7.6% to around 875,000. That’s partly because some government subsidies were withdrawn or made harder to get last year. Penetration remains low, at around 6%, according to Jefferies Group LLC analysts.
In recent months, Beijing has released incentives to ease the purchase and financing of electric vehicles for fleets, leading to a faster uptake. Production volumes are up – 70% or 167,000 cars in October, but that’s still down 9% for the whole year, according to Daiwa Capital Markets Hong Kong Ltd. analysts. Battery installations tell a similar story.
The top-line numbers and optimism shouldn’t give the illusion that the issues clouding the green dream are gone. For now, the ownership and charging infrastructure costs remain huge barriers. Investors should probably take their enthusiasm down a notch, consider that we’re not there yet, and temper future expectations.
Submitted November 16, 2020 at 03:34AM by QuasiPinoy https://ift.tt/2IAs1hD
