Price War Boosts EV Sales Worldwide

The United States emerged as the second-largest EV market worldwide, surpassing Germany in the first quarter of 2023. However, China retained its position as the leading market for EV sales, with a remarkable 29% year-on-year growth. It is worth mentioning that despite a 12% decline in overall passenger vehicle sales in China, EV sales managed to display significant growth. In the US, EV sales skyrocketed by over 79% compared to the previous year.

During the first quarter of 2023, the global EV market was largely dominated by the top 10 automotive groups, which encompassed 48 automotive brands and accounted for three-fourths of the total EV sales worldwide.

Counterpoint attributed the growth in global EV sales primarily to China, where 56% of total EV sales originated. The elimination of the New Energy Vehicle (NEV) purchase subsidy in China initially resulted in lower-than-expected EV sales in January 2023. However, in response to Tesla’s global price reduction in January, other automotive brands followed suit and announced price cuts for their models starting in February. This sparked a competitive price war among nearly 40 automakers, including prominent names like BYD, NIO, Xpeng, Volkswagen, BMW, Mercedes-Benz, Nissan, Honda, and Toyota.

These price reductions had a positive impact on EV sales. It is worth noting that while the price war initially seemed beneficial in terms of increased sales, some automakers in China have now reported reduced earnings and even losses as the price war continues.

Among the top-selling EV models in the first quarter of 2023, Tesla’s Model Y retained its leading position globally, followed by Tesla’s Model 3 and BYD’s Song. The Model Y achieved a significant milestone by becoming the best-selling passenger car model worldwide, surpassing even conventional fuel vehicles.

Based on the current trend, it is projected that EV sales will exceed 14.5 million units by the end of 2023.

Source: Counterpoint Research