The three main Chinese electric-car makers enjoyed a surge in sales in June buoyed by pent-up demand after months of lacklustre demand, boding well for an industry vital to the country's economic recovery.
Beijing-based Li Auto hit an all-time high of 32,575 deliveries last month, up 15.2 per cent from May. It was the third consecutive monthly sales record for the electric vehicle (EV) maker.
Shanghai-based Nio handed 10,707 cars to customers in June, three quarters higher than the volume a month earlier.
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Xpeng, based in Guangzhou, posted a 14.8 per cent month-on-month jump in deliveries to 8,620 units, its highest monthly sales so far in 2023.
"The carmakers can now expect strong sales in the second half of this year since thousands of drivers have begun making EV purchase plans after waiting on the sidelines for several months," said Gao Shen, an independent analyst in Shanghai. "Their new models will be important game-changers."
The three EV builders, all listed in both Hong Kong and New York, are viewed as China's best response to Tesla.
They have been striving to catch up with the American giant in terms of sales in mainland China by developing intelligent vehicles fitted with high-performance batteries, preliminary autonomous driving technology and sophisticated in-car entertainment systems.
Tesla does not publish its monthly sales for the Chinese market. Data from the China Passenger Car Association (CPCA) showed that the US company's Gigafactory in Shanghai delivered 42,508 vehicles to mainland buyers in May, up 6.4 per cent from the previous month.
The impressive delivery numbers for the Chinese EV trio echoed a bullish forecast by the CPCA last week, which estimated that about 670,000 pure electric and plug-in hybrid vehicles would be handed to customers in June, up 15.5 per cent from May and 26 per cent from a year ago.
A price war broke out in the mainland's automotive market in the first four months of this year as builders of both EVs and petrol cars looked to attract consumers worried about the economy and their income. Dozens of carmakers slashed their prices by as much as 40 per cent to retain their market share.
But the heavy discounts failed to drive up sales because budget-conscious consumers held back, believing even deeper price cuts might be on the way.
Many Chinese motorists who had been waiting on the sidelines in the expectation of further price cuts had now decided to enter the market as they felt the party was over, a research note by Citic Securities said.
On Thursday, Xpeng priced its new model, the G6 sport utility vehicle (SUV), at a 20 per cent discount to Tesla's popular Model Y, hoping to turn its lacklustre sales around in the cutthroat mainland market.
The G6, which received 25,000 orders in its 72-hour presale period in early June, has a limited ability to drive itself through the streets of China's top cities like Beijing and Shanghai using Xpeng's X NGP (Navigation Guided Pilot) software.
The electric car sector is one of the few bright spots in China's slowing economy.
Sales of battery-powered vehicles in the mainland will rise by 35 per cent this year to 8.8 million units, UBS analyst Paul Gong forecast in April. The projected growth is much lower than the 96 per cent surge recorded in 2022.
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