Despite vigorous marketing efforts by Tesla, Inc. (TSLA), new energy vehicle (NEV) sales had a sluggish start to the year. Month-on-month industry data shows that they plummeted by 38.8% in the world’s dominant automotive market.
Chinese NEV sales hitting long-time lows
Based on the China Association of Automobile Manufacturers (CAAM) statistics, the overall sales, which include exports, came to 2.44 million units. Although this is an annual 47.9% jump, it is a 22.7% dip compared to December 2023. The CAAM data tracks sales to third-party dealers and vehicles such as trucks.
Reuters indicated that, according to the China Passenger Car Association (CPCA), the sale of passenger vehicles has been the worst since the start of the millennium. A year-on-year comparison mirrored a 37.9% slump, while the month-on-month review painted an even bleaker picture as January 2024 sales plunged by 40.4%.
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Globally, buyer interest in NEVs – vehicles powered by electricity, hydrogen or biofuel as opposed to fossil fuels – cooled down considerably. AutoTrader, a virtual vehicle marketplace, recorded a 13% drop in willingness to buy NEVs in Canada. Experts, however, believe that this decline is more due to the current global economic climes than an actual loss of interest in NEVs, which means that people want them but cannot afford them.
In China, for instance, the local economy is racked by property market issues, currency struggles and across-the-board stock drops. Attempts by Tesla to resuscitate sales include price cuts of its Model 3 and Y vehicles by 6% and 3%, respectively.
For now, these are speculations and will only be proved if NEV sales and global economic conditions rise in tandem.
