May 2024 NEV Rural Market Analysis

Note: This analysis article only represents Cui Dongshu's personal views, if you have any objections, please leave a message.

In 2024, the retail sales of new energy vehicles in China's auto market will achieve the expected good start, with 3.25 million new energy vehicles sold from January to May 2024, a year-on-year increase of 33%. In 2024, the domestic new energy pattern will change drastically, the head effect will become increasingly obvious, and the high-end will be relatively strong. New forces such as Weilai and Ideal are generally good, and traditional car companies such as Wuling, Geely, and Changan have a strong trend in new energy in May.

Rural residents are relatively price sensitive, and a considerable number of people tend to buy pure electric vehicles below 70,000 yuan, so new energy vehicles to the countryside still need to give policy support in terms of economic electric vehicles. The construction of charging infrastructure in the county and township markets is insufficient to promote the use, so promoting the coordinated development of photovoltaic energy storage electric vehicles is also a good promotion for new energy to go to the countryside. The sales structure of new energy vehicles in the small town county and township market has also changed from 90% pure electric vehicles in the past 2020 to 58% pure electric vehicles in 2024. The current sales structure of pure electric vehicles in the Xiaocheng county and township market has decreased from 28% below 200 kilometers in 2020 to 14% below 200 kilometers in 2024, accounting for a significant downward trend. From the perspective of model structure, the proportion of pure electric vehicles A00 in the small town county and township market has dropped sharply, from 68% in 2020 to 36% in 2024, continuing to decline sharply, and temporarily at the level of 37% before the policy withdrawal in May, and the pressure behind is still greater.

1. 11. Monthly trend of new energy passenger vehicles in May 2024

2. 

In May, the wholesale sales of new energy passenger vehicles reached 897,000 units, a year-on-year increase of 32% and a month-on-month increase of 14%. In 2024, a total of 3.64 million units will be wholesaled, a year-on-year increase of 30%. In May 2024, the month-on-month growth rate will be 14%, which is relatively good compared to previous years, and it is also good to maintain a stable year-on-year growth rate of 32%.

In May 2024, the month-on-month trend of NEVs increased steadily, reaching a new high for the year. The rebound in sales of new energy manufacturers in May was promoted by the stabilization of new products and price cuts, especially the expected release of new products such as Xiaomi, which led to the recovery of demand, forming a strong trend in May.

2. Retail sales trend of new energy vehicles in May 2024

In May, the NEV market retailed 804,000 units, up 39% year-on-year and 19% month-on-month. In 2024, a total of 3.25 million units will be retailed, a year-on-year increase of 33%. At present, it is expected that the growth rate in 2024 will be basically similar to the growth rate at the beginning of 2023, and the retail growth rate from June to December is expected to be lower than the growth rate in 2023.

In May 2024, the retail sales of the new energy vehicle market showed a stable trend, with a sharp increase from May and much higher than the sales volume in January. Recently, the cumulative trend of plug-in and hybrid has been strong, driving the retail strength of the new energy market. The sales volume of major new energy vehicle companies is differentiated, and the market differentiation is obvious.

3. NEV export trends in May 2024

NEV exports in May totaled 94,000 units, reflecting a 4% y/y decline and a 19% m/m decline, marking the first year-on-year decline. Total exports from January to May 2024 totaled 510,000 units, reflecting a 31% y/y increase.

In 2024, the export of new energy vehicles will start well, and the decline will be more obvious in February, but it will rebound strongly from March to April, and the decline will be larger in May. Recently, due to the impact of the external environment, due to the sluggish export demand in Europe and the blockage of shipping in the Red Sea, the export market of car companies has diversified to resolve risks, and exports in May are still at a strong level. The export of independent new energy vehicles was differentiated, and the export of new energy vehicles by foreign capital dropped significantly.

4. Analysis of the urban and rural markets of new energy vehicles

The regulations on the statistical division of urban and rural areas (Guo Han [2008] No. 60) clearly state that "the territory of the mainland shall be divided into towns and villages on the basis of the administrative divisions of the mainland, the areas under the jurisdiction of the residents' committees and villagers' committees confirmed by the civil affairs departments, and the actual construction1 as the basis for the division". Among them, "towns include urban areas and township districts. Urban districts refer to residents' committees and other areas connected to the actual construction of district and municipal government stations in municipal districts and cities without districts. Towns refer to the residents' committees and other areas of the county people's government station and other towns outside the urban area, and the actual construction of the government station is connected"; "Rural areas refer to areas other than towns as delineated in these Regulations".

Since the insurance data is the national data managed by the State Administration of Financial Supervision and Administration, and its classification is not as detailed as that of the Bureau of Statistics, we cannot see the corresponding distribution of urban and rural areas from the insurance data of the State Administration of Financial Supervision and Administration.

According to the difference between the State Administration of Financial Supervision and Administration and the Bureau of Statistics, the insurance data is the official data of the State Financial Bureau, and it can be seen from the data that it can only be analyzed according to the difference in the proportion of large cities, medium-sized cities, small cities and rural markets.

In 2020, the sales volume of the Xiaocheng county and township market accounted for 25%, and by 2024, the sales of new energy vehicles in the Xiaocheng county and township market will account for 33.8% of the national new energy vehicle sales, achieving a trend of continuous improvement.

The increase in the market of small towns and counties and townships is mainly based on the growth of pure plug-in hybrid electric vehicles and extended range electric vehicles, and the proportion of pure electric vehicles in the national sales has dropped from 23% to 19%, which is actually a decrease of 3.6 percentage points.

Judging from the distribution of new energy in the market of Xiaocheng, county and township, the sales growth rate in the central Yangtze River region is relatively fast. In the near future, it should be said that the performance of the northwest and southwest is good, the performance of North China is also relatively strong, and the overall performance of the Yellow River Basin in the central part of the country and the eastern South China region is relatively average.

The sales structure of new energy vehicles in the small town county and township market has also changed from 90% pure electric vehicles in the past 2020 to 58% pure electric vehicles in 2024.

In particular, plug-in hybrid and range extension have achieved greater growth, and plug-in hybrid due to the relatively close price to the people, so it has obtained the opportunity to grow explosively in the small town county and township market, rising at 8 percentage points every year, while pure electric vehicles are declining at a rate of 11 percentage points per year, so now in the small town county and township market, more hard work needs to be done in the car to the countryside.

The current sales structure of pure electric vehicles in the small town county and township market has decreased from 28% below 200 kilometers in 2020 to 14% below 200 kilometers in 2024, accounting for a significant downward trend, and by May, it has dropped to 14%, 200 to 300 kilometers has risen from 2% to 11%, a gradual upward trend, but on the whole, it is still a product with medium and high mileage, and the proportion of more than 500 kilometers has increased significantly. Therefore, there is a trend of mid-to-high-end.

From the perspective of model structure, the proportion of pure electric vehicles in the A00 class in the small town county and township market has dropped significantly, from 68% in 2020 to 36% in 2024, continuing to decline sharply, and temporarily at the level of 37% before the policy withdrawal in May.

On the whole, there is a lot of pressure on small and micro electric vehicles, because micro electric vehicles are currently under relatively greater pressure in the competition with low-speed electric vehicles. The proportion of A0-class medium and high-priced electric vehicles has also increased to a certain extent in small cities. Therefore, in the county and township markets, the current demand for A00 electric vehicles suitable for farmers' needs has not been effectively released, and there has been a relatively low situation in recent years.

5. Characteristics of new energy passenger vehicles

From 2018 to 2019, the proportion of new energy passenger vehicles in the rental and leasing category gradually increased, and then the proportion of pure electric rental and leasing from 2020 continued to decline. In 2024, the proportion of rental leasing will be 10.1%, and the proportion of rental in May will be 10.6%, and private consumption will be stronger.

Recently, the proportion of plug-in hybrid in the private market has also continued to increase, and the demand for plug-in hybrid for rental and leasing has continued to shrink, and pure electric vehicles are still the best choice for rental. The proportion of pure electric rental and leasing in May rebounded significantly compared with before the Spring Festival.

6. The performance of the regional market is gradually improving

In the past few years, the demand for new energy passenger vehicles has been strong mainly in the purchase restriction megacities, and it has continued to decline recently. Excluding the purchase restrictions in megacities, the proportion of pure electric new energy passenger vehicles in total sales in megacities in 2024 will decrease by 3.3 percentage points compared with 2023, which also shows that the sales growth rate of new energy vehicle market in megacities is gradually slowing down, and the demand is constrained by the vehicle and basic population size. Due to the large population base and poor public transportation, the market demand in medium-sized cities has been strong in the near future, and new energy in the county and township markets has been gradually launched.

7. The performance of the new energy city market is gradually improving

The decline in NEVs in May was mainly due to cities with high sales in the early stage, such as Shanghai, and the overall impact was not significant. The main growth of new energy vehicles in May was in cities such as Xi'an and Hangzhou. The decline is in Shanghai, Chengdu and other market areas.

In 2024, new energy will still grow significantly compared with the same period in 2023, and Suzhou, Beijing, Guangzhou and other cities will grow relatively rapidly, forming the core driving force of increment.

8. Regional differences in demand for BEVs

The gradual launch of the pure electric private household market has promoted the development of the industry. In the past two years, although the demand in large cities with purchase restrictions has been strong, the proportion has gradually declined, the proportion of large and medium-sized cities with restricted traffic has continued to rise, and the private consumption market in small cities and county and township markets has rebounded slowly.

The rental market for pure electric vehicles has improved slightly, with rental leasing accounting for pure electric vehicle sales peaking in 2020, followed by a decline in rental leasing in 2021, a decline to around 15% in 2021-2023, and a decline to 13% in May 2024, with the share of medium-sized cities increasing.

Judging from the performance of the main models, it also reflects the sluggish demand of the main models in large and medium-sized cities, especially in May, compared with the same period in the same period, the increase is mainly due to the obvious increase in small cities and county and township markets. From Tesla's point of view, the main area in May extended to the market of small and medium-sized cities compared with the same period, and the growth of the pure electric market in mega cities was relatively sluggish.

9. Regional demand for plug-in hybrid passenger vehicles

The private consumption market of plug-in hybrid models has great potential to increase, and although Shanghai has reduced the volume, there is good demand in small and medium-sized cities.

The share of plug-in hybrid vehicles per unit of use and rental continues to shrink. The main demand for plug-in hybrid rental models is in the mega city and medium-sized city markets, and this year's mega city plug-in hybrid rental has shrunk significantly.

In recent years, the proportion of plug-in hybrid vehicles in non-restricted cities has gradually increased, and BYD and Geely are relatively strong. The Lynk & Co 08 and Galaxy L7 performed strongly in May, outperforming some of the old star models.

In May, the plug-in mix strengthened, large and medium-sized non-restricted cities were still the main force of plug-in mixing, the proportion of demand in restricted cities declined, and the plug-in mix in the county and township markets formed a good promotion.

The dependence of BYD Han and others in cities with purchase restrictions has declined, and the performance of low-price plug-in hybrids such as Qin and Song Dynasty has been stronger in small and medium-sized cities.

10. Regional demand for passenger cars

The main users of extended-range passenger cars are individuals and units, of which the proportion of unit users is much higher than that of plug-in hybrid users, reflecting that plug-in hybrid models are not as suitable for unit users as extended range.

The main market of Zengcheng is still large and medium-sized cities, but with the growth of Wenjie and Deep Blue, the market of small cities and counties and townships has gradually risen.

11. Regional penetration rate of pure electric passenger vehicles - May

At present, the proportion of pure electric vehicles in cities with purchase restrictions has been significantly stable, rising from 19% in May 2021 to 38% in 2024.

The proportion of pure electric vehicles in large, medium-sized and small cities in non-restricted cities is basically the same, rising to 28% in mid-sized cities in May this year, and the penetration rate of county and township markets rose to 24%.

The market penetration rate of plug-in hybrid vehicles in all parts of the country continues to grow, especially in mega cities, where the plug-in hybrid vehicle market accounted for 19% in May this year; In the small and medium-sized city market, the proportion of the plug-in hybrid market also shows the characteristics of continuous increase, and the gap between various cities in the penetration rate of plug-and-mix is relatively narrow.

Due to the pull of the plug-in license policy in Shanghai, plug-in and mixed accounted for 9% in May, up 6%.

12. Beijing market trend

The new energy vehicle market in Beijing in 2024 will be relatively stable, with sales reaching 24,000 units in May 2024, which is at a high level in the same period of the previous year, and the license plate index is fully digested.

Since the relatively tight new energy vehicle indicators in 2018, the new energy vehicle market in Beijing in 2022 has a contrast with the national trend, and the current growth rate is high.

Beijing's new energy sales in the second half of last year were better, considering the lack of indicators, and Tesla's supply of fewer cars, Beijing's performance in May was also relatively strong. Beijing's new energy vehicle grade is generally pragmatic, which is also a good reflection of household demand.

13. Shanghai new energy market trend

The new policy trend of the Shanghai market is in obvious contrast with the Beijing market, and the trend from 2019 to 2021 is extremely stable. In December 2022, there was a year-end rush to buy, which brought about an overdraft downturn at the beginning of the next year, and the sales volume at the beginning of 2024 fell significantly.

In May 2024, Shanghai's NEV market sales reached 24,000 units, down 20% from 29,000 units in May last year. Last year's Shanghai new energy vehicles suffered from the impact of policy adjustments, and the market for license plates brought about by the tightening of license plate policies had a greater impact on the Shanghai auto market at the beginning of the year.

14. Market trends of new energy passenger vehicles in restricted cities

The performance of new energy vehicles in restricted cities is relatively strong, reaching the level of 204,000 units in May 2024, a good level of 44% year-on-year.

The cumulative sales of new energy vehicles in 2024 will reach the level of 810,000 units, and the growth of restricted cities in 2024 reflects the continuous growth of demand for new energy vehicles in restricted cities.

15. The market trend of new energy passenger vehicles in areas with no purchase restrictions or travel restrictions

Non-dual-limit cities, that is, areas where we have no restrictions on the purchase and driving of fuel vehicles. Since there is no restriction on the purchase and driving of traditional vehicles, the demand for new energy vehicles in these cities is the real market demand. At present, the growth of non-dual-limit cities is also relatively rapid, such cities are relatively wide in the country, and the sales of new energy vehicles are currently at a relatively high level.

In 2022, the cumulative number of non-dual-limited cities will reach 2.73 million units, a year-on-year increase of 96%, showing strong growth characteristics. In 2023, the sales of new energy vehicles in non-dual-limit cities will be 4.06 million units, and the sales of 1.86 million units from January to May 2024 will be very strong, with a growth rate of 50%.

Attached: A collection of recent information

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*Analysis of the first batch of new energy vehicles in 2024

*Tracking of the recall status of the national automobile market from January to December 2023*Analysis of automobile ownership and scrapping exports