The Zhitong Finance App learned that Cui Dongshu posted an article saying that rural residents are more price sensitive, and quite a few people prefer to buy pure electric vehicles worth less than 70,000 yuan, so new energy vehicles still need policy support for economical electric vehicles when going to the countryside. The construction of charging infrastructure in the county and rural markets is insufficient for promotion and use, so promoting the collaborative development of photovoltaic energy storage electric vehicles is also a good promotion for new energy sources to the countryside. The sales structure of new energy vehicles in the Xiaocheng county and rural market has also changed from 90% pure electric vehicles in 2020 to 58% pure electric vehicles in 2024. The small town market is characterized by gradually being close to the situation in big cities.

In 2024, retail sales in the Chinese auto market achieved the expected good start. From January to May 2024, sales of new energy vehicles reached 3.25 million units, an increase of 33% over the previous year. The domestic new energy landscape changed drastically in 2024. The leading effect is becoming more and more obvious, and the high-end is relatively strong. New forces such as NIO and Ideal are generally good, while traditional car companies such as Wuling, Geely, and Changan are trending strongly in New Energy in May.

Rural residents are more price sensitive, and quite a few people prefer to buy pure electric vehicles that cost less than 70,000 yuan. Therefore, when new energy vehicles go to the countryside, they still need policy support for economical electric vehicles. The construction of charging infrastructure in the county and rural markets is insufficient for promotion and use, so promoting the collaborative development of photovoltaic energy storage electric vehicles is also a good promotion for new energy sources to the countryside. The sales structure of new energy vehicles in the Xiaocheng county and rural market has also changed from 90% pure electric vehicles in 2020 to 58% pure electric vehicles in 2024. The small town market is characterized by gradually being close to the situation in big cities. The current sales structure of pure electric vehicles in the small town county market fell from 28% below 200 km in 2020 to 14% in 2024, accounting for a marked downward trend; judging from the model structure, the share of pure electric vehicles A00 class in the small town county market declined sharply, from 68% in 2020 to 36% in 2024, continuing to drop sharply. It was temporarily at the level of 37% before the policy was withdrawn in May, and the pressure is still high.

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

In May, wholesale sales of new energy passenger vehicles reached 897,000 units, up 32% year on year and 14% month on month. In 2024, a total of 3.64 million vehicles were sold, an increase of 30% over the previous year. In May 2024, the month-on-month increase was 14%, which is relatively good compared to previous years. It is also good that the year-on-year growth rate remains stable at 32%.

The trend of new energy vehicles rose steadily from month to month in May 2024, reaching a new high during the year. The recovery in sales of new energy manufacturers in May was boosted by new products and stabilized price cuts. In particular, it was driven by factors that brought about a recovery in demand brought about by the expected release of new products such as Xiaomi, which formed a strong trend in May.

2. New energy vehicle retail trend in May 2024

In May, the NEV market retailed 804,000 vehicles, up 39% year on year and 19% month on month. In 2024, 3.25 million vehicles were sold, an increase of 33% over the previous year. Currently, the expected growth rate in 2024 is basically similar to the growth rate at the beginning of 2023. The retail growth rate in June-December is expected to be lower than the growth rate in 2023. At present, it is still very promising to meet expectations.

Retail sales in the NEV market showed a steady trend in May 2024, with a sharp increase over May and far higher than January sales. Recently, the strong cumulative trend of mixed mixing has led to a strengthening of retail sales in the new energy market. The sales volume of major new energy vehicle companies is divided, and the market is clearly divided.

3. New energy vehicle export trends in May 2024

In May, exports of new energy vehicles were 94,000 units, a year-on-year decrease of 4% and a month-on-month decrease of 19%. For the first time, there was a year-on-year decline. A total of 510,000 vehicles were exported from January to May 2024, an increase of 31% over the previous year.

NEV exports started well in 2024. The decline was obvious in February, but there was a strong recovery in March-April, and a sharp decline in May. Recently affected by the external environment, due to sluggish demand for European exports and the blockage of shipping in the Red Sea, car companies' export markets diversified to mitigate risks, and exports remained at a strong level in May. Exports of autonomous new energy vehicles have diverged, and foreign exports of new energy vehicles have declined markedly.

4. Analysis of the urban and rural NEV market

The regulations on the statistical division of urban and rural areas (State Letter [2008] No. 60) clearly “divide the country's regions into towns and villages based on the administrative division of the country, based on the administrative division of the country, the areas under the jurisdiction of the residents' committees and villagers' committees confirmed by the civil administration department, and on the basis of actual construction 1.” Among them, “Towns include urban areas and townships. Urban areas refer to residents' committees and other areas connected to the actual construction of municipal districts and cities, districts, and municipal government sites without districts. A town area refers to the residents' committee and other area connected to the actual construction of a county people's government site outside of an urban area and to another town or government site”; while “a village refers to an area other than a town designated by this regulation.”

Since insurance data is national data managed by the State Administration of Financial Supervision and Administration, its classification is not as detailed as that of the Bureau of Statistics, so we cannot see the corresponding urban and rural distribution from the insurance data of the State Financial Supervisory Administration. We can only use this classification of prefecture-level cities as a basis for the corresponding analysis and make an approximate reference analysis.

Judging from the differences between the China Financial Supervision and Administration and the Bureau of Statistics, the insurance data is official data from the National Finance Administration. As can be seen from the data, it can only be analyzed based on the relative differences in the proportion of large cities, medium-sized cities, small cities, and the township market. Therefore, we collectively refer to the county market and the small town market as the small town market.

According to the analysis of the small town county and rural market, the sales volume of new energy vehicles is constantly increasing. In 2020, sales in the small town county market accounted for 25%. By 2024, new energy vehicles in the small town county market accounted for 33.8% of the sales volume of new energy vehicles in the country, achieving a continuous upward trend.

The increase in the small town county and rural market is mainly due to the growth of pure plug-in hybrid electric vehicles and extended-range electric vehicles. The proportion of pure electric vehicles sold nationwide fell from 23% to 19%, which is actually a 3.6 percentage point drop. In other words, the Xiaocheng county and rural market is also mainly due to the strong growth of plug-in hybrid and extended-range models that replace fuel vehicles.

Judging from the distribution of new energy sales in small towns, counties, and rural markets, sales are growing relatively fast in the central Yangtze River region. Recently, it should be said that both northwest China and southwest performed well. The North China region also performed relatively well. For example, the central Yellow River basin, as well as the eastern South China region, the overall performance was relatively average.

The sales structure of new energy vehicles in the Xiaocheng county and rural market has also changed from 90% pure electric vehicles in 2020 to 58% pure electric vehicles in 2024. The small town market is characterized by gradually being close to the situation in big cities.

In particular, plug-in hybrids have achieved significant growth, and plug-in hybrids have had the opportunity for explosive growth in the small town, county, and rural markets. They are rising by 8 percentage points every year, while pure electric vehicles are declining at a rate of 11 percentage points every year, so now looking at the small town, county and rural markets, more hard work is needed in terms of cars going to the countryside.

The current sales structure of pure electric vehicles in the Xiaocheng county and rural markets dropped from 28% below 200 km in 2020 to 14% in 2024, showing a clear downward trend, and falling to 14% in May. 200 to 300 km increased from 2% to 11%, a gradual upward trend, but overall, products with medium to high range have increased dramatically.

Judging from the model structure, the share of A00 class pure electric vehicles in the small town and county market dropped sharply, from 68% in 2020 to 36% in 2024. The decline continued to be sharp. It was temporarily at 37% before the policy was withdrawn in May.

Overall, there is a lot of pressure on small electric vehicles. Since mini electric vehicles are currently under relatively high pressure in competition with low-speed electric vehicles. Meanwhile, the share of A0 class medium- and high-priced electric vehicles has also seen a certain increase in small cities. Therefore, in the county and rural markets, the current demand for A00 class electric vehicles suitable for farmers' needs has not been effectively released, and in the past few years there has been a relatively low situation.

5. Characteristics of the use of new energy passenger vehicles

The share of new energy passenger vehicles in the rental category gradually increased in 2018-2019, and the share of pure electric rental leases continued to decline since 2020. In 2024, rental leases accounted for 10.1%, and in May, leases accounted for 10.6%, and private consumption strengthened.

Recently, the share of the hybrid private market has also continued to rise. Demand for hybrid rental has continued to shrink, and pure electric power is still the best choice for leasing. The share of pure electric rental leases rebounded markedly in May compared to before the Spring Festival.

6. Regional market performance is gradually improving

Demand for new energy passenger vehicles was strong in previous years, mainly in megacities, which restricted the purchase of new energy vehicles, and has continued to decline recently. Excluding purchase restrictions in megacities, the share of pure electric new energy passenger vehicles in megacities in 2024 in total sales decreased by 3.3 percentage points compared to 2023. This also indicates that the NEV market sales in megacities are gradually slowing down, and the overall vehicle and basic population size are constraining demand. Due to the large population base and poor public transportation, demand in the medium-sized urban market has been strong recently, and new energy sources are gradually being launched in the county and rural markets.

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

The main driver of the decline in NEVs in May was in cities with high sales volume in the early stages, such as Shanghai, and the overall impact was not significant. The main drivers of NEV growth in May were cities such as Xi'an and Hangzhou. The decline was in market regions such as Shanghai and Chengdu.

Compared to the same period in 2023, new energy sources in 2024 are still growing rapidly. Suzhou, Beijing, and Guangzhou all grew relatively rapidly, forming the core driving force for growth.

8. Regional demand differences for electric vehicles

The gradual launch of the pure electric private household market is driving the development of the industry. Although demand in large cities with purchase restrictions has been strong in the past two years, its share has gradually declined. The share of the market in large and medium-sized cities with travel restrictions has continued to rise, and the private consumer market in small cities and counties and rural markets has been recovering slowly.

The current performance of the pure electric vehicle rental market has improved slightly. Rental leasing accounted for a peak of pure electric vehicle sales in 2020, then the share of rental leasing declined in 2021. The performance fell to about 15% in 2021-2023, and fell to 13% in May 2024, with the share of medium-sized cities rising.

Judging from the performance of the main models, it also shows that demand for the main models is sluggish in large and medium-sized cities. In particular, the increase over the same period in May was mainly a marked increase in small cities and county and rural markets. Judging from Tesla, the main region extended to the small and medium-sized city market in May compared to the same period, and the pure electric market growth in very large cities was relatively sluggish.

9. Regional demand for plug-in hybrid passenger cars

The private consumer market for plug-in hybrid models has great potential for growth. Although the volume is declining in Shanghai, there is good demand in the small and medium city markets.

The share of plug-in hybrid models in unit use and rental cars continues to shrink. The main demand for hybrid rental models is in megacities and medium-sized cities. This year, plug-in rental in megacities has shrunk sharply.

In recent years, the share of plug-in hybrids in non-restricted cities has gradually increased, and BYD and Geely are relatively strong. The Lynk & Co 08 and Galaxy L7 performed very well in May, surpassing some established star models. The mixed market strengthened in May, and large and medium-sized non-restricted cities were still the main players in the mix. The share of demand in restricted cities declined, and the mix of county and rural markets gave a good impetus. Reliance on limited-purchase cities such as BYD Han has declined, while Qin and Song have shown strong performance in small and medium-sized cities where low prices are mixed.

10. Regional demand for extended-range passenger cars

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

The main growing markets are still large and medium-sized cities, but with the growth of Quanjie and Deep Blue, small cities and county and rural markets are also gradually rising.

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

Currently, the share of pure electric vehicles in restricted cities has stabilized significantly, rising from 19% in May 2021 to 38% in 2024. Among non-restricted cities, large cities, medium-sized cities, and small cities account for almost the same share of pure electric vehicle sales. This year, medium-sized cities rose to 28% in May, and the penetration rate of the county and rural markets rose to 24%.

The market penetration rate of hybrid vehicles continues to grow across the country, especially in megacities, where the share of the plug-in hybrid market reached 19% in May of this year; in the small and medium-sized city market, the share of the hybrid market is also characterized by a continuous increase, and the gap in the penetration rate between various cities has narrowed relatively.

Driven by the hybrid license policy in Shanghai, mixed accounts for 9% in May, and rebounded 6%.

12. Beijing Market Trends

The trend of the NEV market in the Beijing market in 2024 was relatively stable. Sales reached 24,000 units in May 2024, which is at a high level in the same period of the previous year, and license indicators have been fully digested.

Since NEV indicators were relatively tight in 2018, the NEV market in Beijing in 2022 contrasts with the national trend. Currently, the growth rate is high. Some users who bought cars in 2018 should switch cars, but the total market volume is still not high. This is an effect of the suppression of consumption due to the pace of distribution of indicators.

New energy sales in Beijing were relatively good in the second half of last year. Considering the lack of indicators and Tesla's car supply, Beijing's performance in May was also quite strong. The overall grade of new energy vehicles in Beijing is pragmatic, which is also a reflection of the good demand for household use.

13. Trends in the Shanghai New Energy Market

The new policy trend in the Shanghai market contrasts clearly with the Beijing market, and the trend is extremely stable from 2019 to 2021. The year-end rush sales market began in December 2022, leading to a slump in overdrafts at the beginning of next year, and sales declined significantly at the beginning of the year 2024.

The NEV market sales volume in Shanghai reached 24,000 units in May 2024, down 20% from 29,000 units in May last year. The impact of policy adjustments on new energy vehicles in Shanghai last year is gradually recovering. The license grabbing market brought about by the tightening of license plate policies had a big impact on the Shanghai auto market at the beginning of the year.

14. New energy passenger vehicle market trends in restricted cities

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

The cumulative sales volume of NEVs reached the level of 810,000 in 2024. The growth in restricted cities in 2024 reflects the continued growth in demand for NEVs in restricted cities.

15. New energy passenger vehicle market trends in unlimited purchases and regions

A non-restricted city means a region where we are not limited to buying or traveling fuel vehicles. Since traditional cars are not limited to purchases or travel, the demand for new energy vehicles in these cities is a real market demand. Looking at the present, the growth of non-bounded cities is also relatively rapid. Such cities have a relatively large area of the country, and sales of new energy vehicles are currently at a relatively high level. In 2022, the total number of non-restricted cities reached 2.73 million units, an increase of 96% over the previous year, showing strong growth characteristics. In 2023, NEVs sold 4.06 million units in non-dual cities, and had a strong 50% increase in sales of 1.86 million units from January to May 2024.