According to Futu Securities, Cui Dongshu, the Secretary General of the China Passenger Car Association (CPCA), said that in May, the wholesale sales of new energy passenger vehicles reached 900,000 units, a good performance with a year-on-year increase of 32%, which is basically flat compared to the growth rate of 30% in 1-4 months. The overall new energy vehicle trend has been mildly upward, with 800,000 units sold in the Chinese market in May, representing a YoY increase of 39% and a MoM increase of 19%, indicating a strong MoM growth rate. From March to May 2024, sales increased by 90,000 units, and overall retail sales remained strong. In May 2024, the domestic retail penetration rate for new energy vehicles was 47%, an increase of 14 percentage points compared to the same period last year.

Cui Dongshu pointed out that in 2024, China's macroeconomy will remain stable and improved, and the new energy vehicle market is expected to continue to grow in January-May period. The government has frequently issued policies and guidelines on the automotive industry to further stabilize and expand car consumption. Many regions are supporting eligible old-for-new vehicles through energy-saving and emission reduction subsidies arranged by the central finance, which is boosting the automotive market before and after the May Day holiday. With the promotion of price reductions from February to April, the domestic new energy vehicle market has seen fierce changes, and the superiority of leading companies has become more apparent, with the high-end segment being relatively strong. Independent car companies remain strong overall, and emerging companies are doing pretty well. Traditional car companies such as Geely, Wuling, and Changan had a strong performance in new energy vehicles in May.

I. Overall trend of new energy passenger vehicles

1. Strong wholesale sales of new energy vehicles in May 2024

In May 2024, the wholesale sales of new energy passenger vehicles reached 900,000 units, approaching the level of November last year. Due to factors such as the Spring Festival and price reductions, there was a significant decline in February, but the market gradually recovered and continued to grow from March to May.

Wholesale sales of new energy passenger vehicles in May reached 900,000 units, which rebounded to a year-on-year increase of 32%, and was basically the same as the growth rate of 30% from January to April. The sales from January to May showed a mild increase.

Since 2023, the prices of power batteries such as lithium and nickel have been falling, so there is a downward trend in power battery prices. The low sales in February is beneficial for the company to reduce production at the beginning of the year, clear inventory, and achieve continuous growth in new product sales.

2. National new energy penetration rate-wholesale

In May, the penetration rate of new energy vehicle wholesale was 44.2%, an increase of 10.6 percentage points from the penetration rate of 33.6% in May 2023.

In May, the domestic new energy vehicle penetration rate of independent brands was 59.8%. The penetration rate of new energy vehicles in the luxury car market was 32.7%. However, the penetration rate of new energy vehicles in mainstream joint venture brands was only 8%. The wholesale sales of traditional car manufacturers decreased by 16% year on year in May, while wholesale sales of new energy vehicles increased by 32%. The pressure on gasoline vehicles was great.

3. Strong retail growth for new energy vehicles in May 2024

In May 2024, the market retail sales of new energy vehicles were 800,000 units, a year-on-year increase of 39% and a month-on-month increase of 19%, which was a relatively strong growth rate. The overall retail market continued to strengthen from March to May, with an increase of 90,000 units compared to March.

As a result of license plate lottery releases in Beijing, the effect of new demand released in May is apparent, and some people who were waiting for price decreases started buying cars.

In 2023, the cumulative retail sales of new energy vehicles were 7.75 million units, a year-on-year increase of 36%. From January to May 2024, the retail sales of new energy vehicles were 3.25 million units, a 34% increase compared to the same period last year, which is close to the growth rate of 41% in 2023. This is a good performance.

4. National new energy penetration rate-retail

In May, the domestic retail penetration rate of new energy vehicles was 47%, an increase of 14 percentage points from the penetration rate of 33% in the same period last year.

In May, the penetration rate of independent brand new energy vehicles in domestic retail was 71.2%; the penetration rate of new energy vehicles in luxury cars was 28.4%, while the penetration rate of new energy vehicles in mainstream joint venture brands was only 7.5%.

In May, traditional car retail sales fell by 23% year-on-year, while new energy vehicle retail sales rose by 38% year-on-year, which put significant pressure on fuel vehicles due to the heavy tax burden.

5. Large decline in export of new energy vehicles in May 2024

In May 2024, the export of new energy vehicles was 94,000 units, and the month-on-month decline remained high. The low export performance in January and February was due to transportation issues such as marine transportation. The export of independent brands increased significantly in March, but in April and May, some domestic brands faced weakened demand in Europe and had to adjust accordingly.

More and more Chinese-made new energy products are going abroad. Due to the continuous improvement of overseas recognition and the improvement of service networks, domestic brand pure electric vehicles are mainly facing the market in developed countries. At present, there are phenomena of blocking Chinese new energy abroad, which is completely wrong, but we should also face it calmly.

From January to May 2024, the cumulative export of new energy vehicles was 510,000 units, a year-on-year increase of 23%. From the recent retail data monitoring of autonomous exports, although traditional automakers have performed well in overseas markets, new players in the industry have gradually emerged. The performance of exports to some regions has also continued to improve. Sales in some areas such as South America have also begun to increase. Independent plug-in hybrid models have begun to grow in exports. The high export baseline in May 2023 has limited impact on export promotion. The export of new energy vehicles is expected to continue to grow rapidly in the coming months.

II. Analysis of the market structure of new energy passenger vehicles

1. Tracking of plug-in hybrid price reductions. 2. Analysis of price reductions for pure electric vehicles. 3. Analysis of price reductions for extended-range vehicles. 4. Cargo compartment structure of new energy vehicles. By May 2024, the proportion of SUVs in pure electric vehicles will reach 46%, the proportion of SUVs in extended-range vehicles will reach 91%, and the proportion of SUVs in true plug-in new energy vehicles will reach 53%, forming a differentiated feature with the lowest proportion of pure electric SUVs and the highest proportion of extended-range SUVs, thus promoting the vehicle market extension from SUVs to passenger cars. 5. The level of new energy vehicles is relatively balanced with each other. In May, the sales of electric vehicles at different levels were differentiated, and the trend of consumption upgrading was good. The demand for small electric vehicles is weak, and the demand for the second family car is average. High-end SUVs represented by Xiaomi grew strongly. 6. The performance of independent and new forces in new energy vehicles remains strong. From the monthly retail market share in China, pure electric vehicles, independent new forces, and new forces of hybrid cars account for about 85% of the retail market share, showing excellent performance. The main joint venture car companies and traditional luxury cars are far lower than Tesla's. NIO, Naza, ideal, and Zero Run and other new energy vehicle companies' sales growth year-on-year and chain-on-chain performance remains relatively strong, especially NIO, ideal and other strong performance, which is also the advantage of subdivision market competition. Independent brands have a large advantage in the pure electric vehicle market, and Tesla is the main high-end brand. Recently, independent plug-in hybrid cars have increasingly taken the leading advantage, while extended-range vehicles have become the exclusive choices for independent and new forces. 7. In May 2024, the mainstream manufacturers of new energy vehicles will be differentiated.

The main high-end and low-end car models have reduced prices significantly. The sales volume of high-end car models with more price reductions is small, but the sales volume of low-end car models with more price reductions is large. This reflects the severe competitive situation of plug-in hybrid vehicles, and the price reductions have been lasting for a long time. The effect of continuous price reductions for over two months should be very powerful.

Analysis of pure electric vehicles with price reductions. Overall, the price reduction of pure electric vehicles is also very large, especially for some models with a price reduction of more than 10%. In addition, the adjustment of some models also has a surprising impact.

Analysis of extended-range vehicles with price reductions. The price reductions of extended-range vehicles are relatively moderate, generally around 5%, and some price reductions are of a gesture type. Overall, the competition of extended-range vehicles is relatively moderate, only high-end extended-range vehicles face more fierce competition.

Cargo compartment structure of new energy vehicles. By May 2024, the proportion of SUVs in pure electric vehicles will reach 46%, the proportion of SUVs in extended-range vehicles will reach 91%, and the proportion of SUVs in true plug-in new energy vehicles will reach 53%, forming a differentiated feature with the lowest proportion of pure electric SUVs and the highest proportion of extended-range SUVs, thus promoting the vehicle market extension from SUVs to passenger cars.

The level of new energy vehicles is relatively balanced with each other. In May, the sales of electric vehicles at different levels were differentiated, and the trend of consumption upgrading was good. The demand for small electric vehicles is weak, and the demand for the second family car is average. High-end SUVs represented by Xiaomi grew strongly.

The performance of independent and new forces in new energy vehicles remains strong. From the monthly retail market share in China, pure electric vehicles, independent new forces, and new forces of hybrid cars account for about 85% of the retail market share, showing excellent performance. The main joint venture car companies and traditional luxury cars are far lower than Tesla's. NIO, Naza, ideal, and Zero Run and other new energy vehicle companies' sales growth year-on-year and chain-on-chain performance remains relatively strong, especially NIO, ideal and other strong performance, which is also the advantage of subdivision market competition. Independent brands have a large advantage in the pure electric vehicle market, and Tesla is the main high-end brand. Recently, independent plug-in hybrid cars have increasingly taken the leading advantage, while extended-range vehicles have become the exclusive choices for independent and new forces.

1. Monthly sales trends of mainstream new energy vehicle manufacturers in recent years. With the diversified development of independent car companies on the new energy route, the market foundation continues to expand, and the number of manufacturers with monthly wholesale sales volume of new energy exceeding 10,000 vehicles continues to increase. 2. The wholesale sales of new energy vehicles are among the top 5 in total car models, in which the new energy models have a high degree of market recognition, while the performance of gasoline main car models is not strong. 3. Analysis of new energy vehicle market incremental.

The level of new energy vehicles is relatively balanced with each other. In May, the sales of electric vehicles at different levels were differentiated, and the trend of consumption upgrading was good. The demand for small electric vehicles is weak, and the demand for the second family car is average. High-end SUVs represented by Xiaomi grew strongly.

In May, sales of electric vehicles of different sizes varied, reflecting a trend of consumption upgrading. Demand for small electric cars was relatively weak and demand for second family cars was moderate. High-end SUVs, such as those made by Xiaomi, showed strong growth.

From the monthly retail market share in China, pure electric vehicles, independent new forces, and new forces of hybrid cars account for about 85% of the retail market share, showing excellent performance. The main joint venture car companies and traditional luxury cars are far lower than Tesla's.

NIO, Naza, ideal, and Zero Run and other new energy vehicle companies' sales growth year-on-year and chain-on-chain performance remains relatively strong, especially NIO, ideal and other strong performance, which is also the advantage of subdivision market competition.

NIO, Naza, ideal, and Zero Run and other new energy vehicle companies' sales growth year-on-year and chain-on-chain performance remains relatively strong, especially NIO, ideal and other strong performance, which is also the advantage of subdivision market competition.

Independent brands have a relatively large market share in the pure electric vehicle market, while Tesla is the main high-end brand. Recently, plug-in hybrids have increasingly gained dominance among independent car makers, and extended-range electric vehicles are a unique offering for independent and emerging car companies.

III. In May 2024, the main players in the new energy vehicle market were divided into blocks.

In terms of product introduction, with the diversified development of independent car companies on the new energy route, the market foundation continues to expand, and the number of manufacturers with monthly wholesale sales volume of new energy exceeding 10,000 vehicles continues to increase.

Independent enterprises hold an absolute leading position, but some car companies face continuous pressure from declining accumulative sales volume.

Independent companies hold an absolute dominant position, but some car makers continue to experience sustained pressure with a decline in cumulative sales.

Among the models with wholesale sales of more than 20,000 cars in May, new energy vehicles ranked among the top 5 in overall passenger car models, demonstrating their high market recognition. Mainstream gasoline car models showed weak performance.

In May, among the car models with wholesale sales exceeding 20,000 units, new energy vehicles ranked among the top five in overall passenger car sales, indicating a relatively high market recognition for new energy vehicles. The main gasoline-powered car models did not perform strongly in the domestic market.

Analysis of market increment of new energy vehicles.

In 2024, the auto market will face great growth pressure, severe industry differentiation, and huge changes in the auto market pattern.

IV. Analysis of the Pure Electric Vehicle Market in May 2024

1. Sales Trends of Major Pure Electric Vehicle Manufacturers

In recent years, the pure electric passenger vehicle market is still dominated by BYD, Tesla, and traditional self-owned brands. But recently, the performance of joint ventures has improved significantly. In May 2024, the new energy passenger vehicle market diversified its efforts, and the performance of the major groups in the new energy field varied. In May 2024, the leading pure electric vehicle enterprises are BYD, Tesla, Geely Auto, Wuling, Changan Automobile, and others. Joint venture pure electric vehicle enterprises are relatively weak.

The overall trend of new forces is diversified, and most of the new forces of pure electric vehicles perform generally.

2. Weak Wholesale of Mainstream Pure Electric Vehicles in May 2024

The relatively strong performing pure electric vehicle models in May 2024 include Tesla MODELY, Sea Gull, MODEL3, BYD Yuan, and other products.

BYD Sea Gull has particularly strong product strength in micro-electric vehicles and meets entry-level demands. Although the trend of micro-electric vehicles like Wuling Hongguang mini is weak, the new products of micro-electric vehicles such as Sea Gull perform well.

V. Analysis of the Plug-in Hybrid Electric Vehicle Market

1. Improvement of Plug-in Hybrid New Energy Vehicle Enterprises Performance

In May 2024, the trend of the plug-in hybrid market is diversified, and the major manufacturers are BYD, which is in an absolute leading position. Geely Auto, Great Wall Motor, Changan Automobile, and SAIC-GM-Wuling are following BYD to develop plug-in hybrids, and the competing products of BYD have actively followed the price reduction. Recently, the new plug-in hybrid products of Geely and Great Wall are quite competitive.

The performance of joint venture plug-in hybrid vehicle enterprises is relatively weak. Due to differences in the industrial chain, part of the plug-in hybrid power vehicle models of joint venture enterprises perform relatively well. Recently, European plug-in hybrids are weak, and the plug-in hybrids of luxury cars are not strong enough.

2. Strong Wholesale of Plug-in Hybrid Mainstream Vehicles in May 2024

Plug-in hybrid power vehicle models reflect the characteristics of mainly domestic-owned enterprises. Recently, sales of models such as BYD Song, BYD Qin, Destroyer 05, Wuling Star, and so on are good. BYD's product matrix is ​​rich and the trend coverage is relatively large. European and American companies do not attach great importance to the luxury hybrid market, and their sales trends are relatively stable.

Recently, pure electric and plug-in hybrid export models have performed well in the European market, with BYD's Sea Lion and others having more exports, forming a micro-drive for China's plug-in hybrid in the European new energy market.

VI. Analysis of Extended-Range Electric Vehicle Market

1. Performance of Extended-Range New Energy Vehicle Enterprises

Recently, extended-range new energy vehicle enterprises have performed superstrong, with some enterprises such as Li Auto and Changan leading the market with explosive growth characteristics. Li Auto's extended-range rebounded with a larger increment this month. Changan and Nezha's extended-range products have continued to grow rapidly.

2. Performance of Extended-Range New Energy Vehicle Models

Jinkang Sokon's extended-range performance is super strong, and it has recently become a dark horse. Li Auto promotes the growth of the extended-range, and the actual user demand is still in pure electric mode.

In May 2024, the block orders for the main vehicle models shifted from being dominated by LiXiang to Chengdu Chongqing Sokon Industry Group Stock's Wenjie leading models, intensifying competition in the market for main vehicle models. Vehicle models with monthly sales of more than tens of thousands have already had sufficient competition, and Changan’s growth is also good.

The extended-range electric vehicle Wenjie M9 has become the leading model, and the performance of the LiXiang L9 is gradually slowing down, with sales structure shifting towards the L7. This shows that consumers still have good acceptance of low stock price extended-range models and the performance-to-price ratio advantage of extended-range vehicles is still important. Recently, Changan's deep blue range-extended and Qiyuan's pure-electric vehicles have also started, forming distinctive characteristics.