Chinese Car Sales Continue to Decline for Fifth Month, EV Sales Hit New Record

The Chinese automotive industry saw passenger vehicle sales drop for the fifth consecutive month in August, according to data released by the China Passenger Car Association on Monday. Sales fell by 1.1% year-on-year, with a total of 1.92 million vehicles sold in August, compared to a 3.1% decline in July.

Despite the overall drop, new energy vehicle (NEV) sales—comprising all-electric and plug-in hybrid models—soared by an impressive 43.2%, setting a new record by accounting for 53.5% of total car sales in China. The increase in NEV sales was bolstered by government incentives, offering drivers up to 20,000 yuan ($2,823) in subsidies for trading in petrol-powered vehicles for more environmentally friendly options.

Local electric vehicle (EV) giant BYD achieved a sales record, while U.S.-based Tesla also saw its best performance in 2024, reflecting the growing consumer preference for clean energy cars. Car exports from China increased by 24% in August following a 20% rise in July.

However, the overall decline in sales reflects waning consumer confidence, with first-time car purchases lagging behind trade-ins. Many dealerships are facing increased financial pressure, with more than half suffering losses in the first half of 2024. China Grand Automotive Services, the country’s second-largest dealership, was delisted from the Shanghai Stock Exchange in August due to continuous stock underperformance.