By Jiahui Huang


Chinese electric vehicle makers had robust sales in June, helped by government subsidies, tax breaks and steep discounts that brought buyers back into showrooms after a sluggish start to the year.

Warren Buffet-backed BYD, Nio, Leapmotor and Geely-backed Zeekr all posted sales volume records during the month, while Li Auto recovered from lackluster numbers early in the year with a 47% on-year rise in vehicles delivered in June. XPeng and Seres both posted higher on-year and on-month sales.

BYD's sales of 145,179 all-electric vehicles in the final month of the second quarter, which came alongside sales of 195,032 plug-in hybrids, gives it an outside shot of recapturing the quarterly crown for biggest global seller of all-electric vehicles from Tesla. BYD's quarterly all-electric sales totalled more than 426,000, while a FactSet-compiled forecast of analysts' estimates put Tesla deliveries at around 435,000.

Tesla was an outlier for the month, with its sales of China-made vehicles dropping 24% on year and 2.2% on month, the China Passenger Car Association said Tuesday. The U.S. automaker is expected to release fresh global sales data during quarterly earnings later in the day.

Collectively, the sales performance of Chinese EV makers in June "shows the new energy vehicles as a sector is becoming stronger," especially given a lack of significant growth in passenger sales as a whole in China in June, CCB International analyst Qu Ke said. "Policy support boosted the [EV] sector's growth."

The sales mark a turnaround from early in the year, when numbers were dragged by the combination of a long Lunar New Year holiday and a waiting game as consumers watched to see how far EV makers would go in fresh rounds of price cuts.

June sales were helped by Beijing's move in late April to introduce subsides to entice car owners to replace their vehicles, adding to tax breaks already in place for buyers of electric vehicles.

Nio's monthly sales were a positive surprise for analysts. Deutsche Bank analyst Bin Wang wrote in a note that rising deliveries were driven by improving supply after Nio faced constraints in May. Its production efforts were pressured due to its new, low-cost brand Onvo, Bocom International auto analyst Angus Chan said.

Li Auto's higher-than-expected June sales were a relief for investors. The company's shares have lost nearly 60% since the hybrid specialist introduced its first all-electric model to a ho-hum reaction in March. Nomura analysts now forecast better sales for the rest of the year, helped by the capacity ramp-up of Li Auto's newest SUV and strategy to refocus on hybrid models.

"With an aggressive target but a tough start to 2024, we believe Li Auto has reacted quickly in its business strategy changes and has already recorded a rebound of momentum since May," Nomura analysts led by Joel Ying wrote in a note.

Another trend this year in China's auto market has been much faster growth in hybrid car sales than in full-electric vehicles. According to the China Passenger Car Association, retail sales of hybrid models rose 70% in the first five months of the year, well above the 17.5% growth seen in the all-electric segment.

Analysts are expecting more promotions in the second half of this year, especially for the last four months, which is usually a peak season for auto sales. That said, they don't expect new sales records in July, a traditionally weak period for auto sales, but said sales could come close.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

07-02-24 0634ET