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Electrical Autos Drive Development for China Automotive Gross sales

Electrical Autos Drive Development for China Automotive Gross sales

BEIJING—China’s automobile market snapped a three-year decline final 12 months, helped by robust gross sales of electrical autos, although the worldwide chip scarcity and Covid-19 outbreaks within the nation disrupted some manufacturing.

Gross sales of passenger vehicles in 2021 rose 4.4% from a 12 months earlier to twenty.1 million autos, the China Passenger Automotive Affiliation mentioned Tuesday.

Serving to drive progress in China had been sturdy gross sales of electrical and plug-in hybrid vehicles, which final 12 months accounted for 15% of general passenger-car gross sales. Gross sales of those new-energy autos greater than doubled to 2.99 million autos, the affiliation mentioned. Chinese language manufacturers reminiscent of

XPeng Inc.

XPEV -5.37%

and

NIO Inc.,

NIO -1.33%

together with

Tesla Inc.,

TSLA 3.03%

confirmed file gross sales final 12 months.

For 2022, China’s passenger-car market is prone to develop by 5%, with new-energy vehicles accounting for 1 / 4 of complete gross sales, the affiliation forecast. Analysts additionally anticipate the market to broaden, although some anticipate the tempo to be slower.

Any progress is prone to come from electric-car gross sales, with analysts and trade executives anticipating gross sales of internal-combustion-engine vehicles to stay flat or decline barely this 12 months.

Dangers hanging over the market embody an financial slowdown and the pandemic, analysts say. The world’s second-biggest financial system has been slowing in current months amid a sluggish restoration in consumption and a protracted property hunch.

“A unbroken contraction in demand attributable to the general financial slowdown and pandemic controls, coupled with the restoration of manufacturing because the chip scarcity eases, would shift China’s automobile market from an overdemand final 12 months to an oversupply,” mentioned Paul Gong, head of China autos analysis at UBS.

China recorded a steep financial slowdown within the third quarter as its pandemic bounceback fades—and now, Beijing is taking up longer-term points together with family debt and power consumption. WSJ’s Anna Hirtenstein explains what buyers are watching. Photograph: Lengthy Wei/Sipa Asia/Zuma Press

The hovering value of uncooked supplies, particularly these utilized in electric-vehicle batteries reminiscent of lithium and cobalt, is prone to loom over the trade, Mr. Gong added.

The automobile market has been feeling ache in current months. October-December gross sales declined 11% in contrast with the identical interval final 12 months, knowledge from the affiliation confirmed.

In 2021, some overseas auto makers suffered greater than others, primarily because of the international semiconductor scarcity and different component-supply issues.

Volkswagen AG

, the most important overseas model in China, mentioned its group gross sales within the nation declined about 14% final 12 months to three.3 million autos, hit by the worldwide chip scarcity.

Nissan Motor Co.

’s gross sales fell 5.2%, and

Honda Motor Co.

’s dropped 4%.

“It’s actually a fancy system of constraints which is altering roughly on a weekly foundation,” mentioned

Stephan Wöllenstein,

Volkswagen’s China chief govt, of the auto maker’s manufacturing plans.

The German auto maker has additionally lately been struck by comparatively small outbreaks of Covid-19 in China, shutting down crops in Tianjin and Ningbo, Mr. Wöllenstein mentioned in a media briefing Tuesday.

It goals to boost its China gross sales by round 15% in 2022 if component-supply situations enhance, Mr. Wöllenstein added.

In the meantime,

Toyota Motor Corp.

, which has navigated the supply-chain constraints higher than some rivals in each China and the U.S., mentioned its gross sales in China rose 8.2% in 2021.

China’s main homegrown EV makers offered a file variety of vehicles final 12 months.

BYD Co.

1211 -1.79%

mentioned it offered almost 600,000 new-energy passenger vehicles in 2021. XPeng, NIO and

Li Auto Inc.

LI -5.62%

all delivered greater than 90,000 autos every final 12 months.

U.S. electric-vehicle maker Tesla offered greater than 470,000 vehicles made at its Shanghai manufacturing unit final 12 months, round a 3rd of which had been exported, knowledge from the affiliation confirmed. Tesla mentioned final week that it delivered greater than 936,000 autos globally in 2021.

China’s subsidy program for electric-car patrons is ready to finish earlier than the beginning of 2023. This 12 months, Beijing, which has already been slicing subsidies in recent times, has additional lowered them by 30% from final 12 months to round $2,000 or much less.

Analysts anticipate the top of the coverage to have restricted influence on electric-vehicle gross sales. “The brand new-energy car market in China has developed to be pushed by demand from one which was pushed by insurance policies and subsidies,” mentioned

Jing Yang,

analysis director of Fitch Rankings.

Write to Yoko Kubota at yoko.kubota@wsj.com

Copyright ©2022 Dow Jones & Firm, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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