Chinese electric vehicle makers BYD and Li Auto set new records for deliveries in July, usually a low season for auto sales, following the strong momentum built in the previous month and likely extending their lead over rivals as competition in China’s EV sector remains intense.
Why it matters: The numbers come against a stormy backdrop with a growing number of Chinese automakers taking aim at each other in the press, as a cutthroat price war has been running for more than a year and a half, deepening losses of most players.
- Li Auto was put in the dock of public opinion recently for publishing weekly sales figures including those of its major rivals such as Huawei-backed Aito, Geely-affiliated Zeekr, and Xiaomi, pushing most of the rest of the industry to complain. On July 30, Ma Lin, an assistant vice president of brand and communication at NIO, quoted China’s top leadership on social media and called on Li Auto founder Li Xiang to stop the “low-level competitive behavior” that has gone on since last April (our translation).
- On the same day, Xpeng chief executive He Xiaopeng openly criticized some rivals competing over sales volumes on a weekly basis rather than leading technologies such as end-to-end neural networks, without mentioning Li Auto by name. Victor Yang, a senior vice president at Geely, also publicly endorsed their opinions on the Chinese microblogging platform Weibo. The comments came immediately after China’s top decision-making body the Politburo pledged to prevent “the vicious competition of involution” in domestic industries, Caixin reported.
- Top Chinese auto business leaders overall appear split on the issue of competition. At this year’s China Auto Chongqing Summit in June, BYD chairman Wang Chuanfu said he advocated for businesses to embrace the competitive spirit and strive for excellence, while other counterparts, such GAC’s Zeng Qinghong and Geely’s Eric Li, said disorderly competition could result in inferior quality and shrinking profits. Richard Yu, chairman of Huawei’s Intelligent Automotive Solution business unit, playfully called BYD “the king of Juan,” which in Chinese means the top player amid fierce market competition.
Details: BYD announced on Thursday (in Chinese) that it sold 340,799 EVs in July, the company’s best-ever monthly result this year and just 244 units fewer than its all-time high in December. Still, the Chinese EV giant saw a lackluster performance in its premium lineups. Fangchengbao’s sales plunged 31.3% to 1,842 units from a month earlier, while Yangwang’s sales of 439 units remained flat compared to June.
- Li Auto posted its best-ever monthly result, delivering 51,000 plug-in hybrid and fully electric vehicles in July, bringing its total delivery count for the year to almost 240,000 units. This was attributed to the strong sales of the L6, its most affordable crossover, which accounted for roughly 40% of its deliveries last month. The $34,500 extended-range hybrid crossover travels up to 1,390 kilometers (864 miles) on a full charge and tank.
- Stellantis-backed Leapmotor surpassed the threshold of 20,000 units for the second month in a row, as sales of its C16 sports utility vehicle gained momentum. The company has positioned the vehicle as a cheaper alternative to Li Auto’s L9 with a similar appearance, range, and practicality. The Hong Kong-listed EV startup said on July 22 it had more than 10,000 non-refundable orders for the six-seater crossover at a starting price of RMB 155,800 ($21,610).
- Meanwhile, sales of Geely, Great Wall Motor, NIO, and Huawei-backed EV makers were down slightly. NIO delivered 20,498 units in July, only 711 less than a month earlier, and passed the 20,000 unit milestone for a third consecutive month, though the company has been providing fewer cash incentives to buyers since July 22.
- Huawei’s Harmony Intelligent Mobility Alliance (HIMA), which for now includes Aito and Luxeed brands only, delivered 44,090 units last month, representing a 4% decline from June, in the face of competition from players such as Li Auto. The new energy vehicle (NEV) sales of Geely and Great Wall Motor, which include all-electrics and plug-in hybrids, decreased 10.5% and 7.5% month-on-month in July, respectively.
- Xiaomi, Xpeng Motors, and CATL-backed Hozon Auto each delivered more than 10,000 units last month. China’s smartphone giant is aiming for an annual delivery of 120,000 units of its first model, an all-electric sports sedan with styling similar to the Porsche Taycan and priced at less than $30,000. Xpeng’s July deliveries increased 4% from June and the company expects to improve the performance of its assisted driving technology later this year.
Context: China’s sales of new energy passenger vehicles increased 31% year-on-year but declined 5% month-on-month to roughly 722,000 units from July 1-28, according to figures released by the China Passenger Car Association. Increased promotions boosted sales in the April-June quarter, including some advance buying from customers looking to nab deep discounts, said the industry group.