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China’s first-quarter EV sales growth slowest in a year

China’s first-quarter EV sales growth slowest in a year
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A man holds a charging plug at a Smart Charge electric vehicle charging station, in Beijing, on Feb. 2.Florence Lo/Reuters

Sales of electric passenger vehicles in China rose 10.5 per cent in March from the same month a year earlier, industry data showed on Tuesday, as automakers led by popular BYD deepened discounts and offered financing tools to boost sales.

For January-March, sales totalled 1.03 million EVs, up 14.7 per cent on year and the slowest quarterly growth since the second quarter of 2023, the data from the China Passenger Car Association (CPCA) showed.

New energy vehicles (NEV) including all-electric models and plug-in hybrids made up 41.5 per cent of overall passenger car sales in March, which jumped 5.7 per cent to 1.71 million vehicles.

Authorities have joined automakers in trying to convince consumers to buy cars to help jumpstart a sluggish economy. Initiatives include revising car loans to promote auto trade-ins and scrapping government-set minimum down payments for new-car purchases.

The launch of an electric sedan by electronics maker Xiaomi last month prompted rivals to announce further price cuts and subsidies.

BYD, which ceded the top EV seller title to U.S. peer Tesla in the first quarter, in March lowered starting prices for nine models including four under its premium brand Denza by 4 per cent to as much as 20.5 per cent.

BYD Chairman Wang Chuanfu forecast falling profit margins this year as the price war intensifies, but said the automaker would ensure stable profitability by improving sales. It is targeting 20 per cent sales growth this year.

The auto sector’s profit margins have fallen to 4.3 per cent from 8.7 per cent in 2015, said Cui Dongshu, the CPCA’s secretary general.

Tesla hiked Model Y prices in China by 5,000 yuan ($691.24) starting April 1, but also offered a time-limited zero-interest financing scheme for buyers of the base Model 3 model.

Volkswagen and Nio have also launched auto financing plans with low interest rates to attract buyers.

Tesla exported 26,666 China-made vehicles in March, down 11.8 per cent from the previous month, the association data showed. China’s overall car exports jumped 39 per cent to a record monthly high of 406,000 units in March, quickening from February’s 18 per cent.

In response to comments by Treasury Secretary Janet Yellen on how Washington would not allow Chinese exports to decimate the U.S. industry, Cui said: “China’s new energy vehicle sector has yet to reach severe overcapacity levels and the current reasonable output bodes well for consumers and a market-oriented economy.”