What's going on?
Chinese EV sales are forecast to hit a record 6 million this year, according to data out on Tuesday.
What does this mean?
There were twice as many sales of “new energy vehicles” (NEVs) – both pure battery EVs and plug-in hybrids – in July as there were a year ago, according to the China Passenger Car Association (tweet this). That brings the total to around 486,000, or 27% of the country’s car market that month. That’s led the organization to increase its forecasts for this year’s NEV sales, lifting them to 6 million. That’s double last year’s total, and dwarfs the 3.2 million and 1.2 million expected to be sold in Europe and the US in 2022.
Why should I care?
Zooming in: BYD isn’t playing fair.
The data also showed that Tesla sold 64% fewer vehicles in July than the month before, largely because Tesla shut its Shanghai gigafactory for an upgrade. That means BYD sold almost six times more than its biggest rival, but it does have an added advantage: plug-in hybrids accounted for more than half its sales, while Tesla doesn’t make them at all. That’s important because they’re much easier to pitch to EV-curious buyers: they come with the same subsidies they would if they were an out-and-out EV, along with a traditional engine in case they run out of juice.
The bigger picture: The US comes through.
China is by far the EV frontrunner, but at least the US is trying to close the gap: it passed a bill on Sunday that – among other green initiatives – lifts the cap on the number of tax credits that EV makers are eligible for. That’s a big win for Tesla, which hit the limit way back in 2018. Better yet, its major rivals Lucid Motors and Rivian don’t have any models cheap enough to qualify for the credit, which is only available on new EVs under $55,000.