Before the coronavirus outbreak, 2020 was to be a crucial year for automakers selling electric vehicles in China, with several industry titans opening new factories and rolling out new models. The country already has more EVs than any other, thanks to government policies encouraging production and generous subsidies to help consumers buy them. But sales had been sputtering and now the economic fallout from the pandemic is threatening to further slow Chinese EV sales – at least for now.
1. What are the big automakers doing?
Chinese companies including BYD Co., backed by Warren Buffett, dominate the market, but foreign automakers have ambitious plans to catch up. Volkswagen, General Motors and Daimler are among the global heavyweights beefing up their EV strategies in China this year. Among the new models are GM’s Menlo, its first electric Chevrolet in the country, and Daimler’s Beijing-made Mercedes EQC. VW is sticking to plans to begin EV production in China in 2020, and Tesla Inc. in January began deliveries from a new factory in Shanghai, its first outside the U.S.
2. What’s the impact from Covid-19?
Once China’s government imposed lockdowns, buyers stayed home and demand disappeared. Passenger electric vehicle sales fell 58% in the first quarter compared with a year earlier, steeper than the 45% decline in the overall passenger car market, according to BloombergNEF. One big reason: Fleet-based orders – a driver of China EV sales – were postponed or canceled, as ride-hailing and taxi trips were down 85% in February. On the other hand, sales were seen picking up in March as travel restrictions were lifted. New Tesla registrations hit a record in March, after the local government helped the company get supplies such as masks, disinfectants and thermometers to reopen its Shanghai plant.