Overall market development trend
1. Market demand is high, and the sales of new energy vehicles in 2023 will reach 7.304 million units, and sales will reach a new level
Under the guidance of national policies such as "subsidies, license plate restrictions, and traffic restrictions", China's new energy vehicle sales have undergone earth-shaking changes in more than ten years, and the market penetration rate has steadily increased from 0 to 33.8%.
Against the background of enhanced quality and reduced costs of new energy vehicles, as well as the rich variety of products, consumers' choices are further tilted towards new energy. In 2023, the sales of new energy vehicles will reach 7.304 million units, and sales will reach a new high, with a year-on-year increase of 39.2%.
2. In the second half of the year, the sales of new energy vehicles have continued to set new highs, with a month-on-month increase of 48.7%
Although the sales of new energy vehicles in 2023 have fluctuated, they are generally on the rise, especially in the second half of the year, with sales continuing to set new highs, and sales increasing by 48.7% month-on-month in the first half of the year. Specific performance: Affected by the price war in March, new energy vehicles ushered in a short-term growth peak. At the end of the year, car companies rushed to increase sales, and sales exceeded 700,000 units for four consecutive months.
3.New energy vehicle market share grows annually.Expected to eventually supplant traditional fuel vehicles.
The proportion of non-operating vehicles has steadily increased, and the market share has increased to 89.9% in 2023. C-end consumption has become the main force in the new energy market;
Driven by multiple factors such as "industry policies and operating costs", the proportion of new energy in the operating market has also increased year by year, accounting for more than 85% of the market in 2023, and the gap with traditional fuel vehicles has further widened. It is expected to gradually replace fuel vehicles in the later period.
4. The head effect of the operating market is significant, and Aion and BYD occupy half of the industry
After experiencing two consecutive years of decline in the share of the TOP3 brands, the share has gradually increased in the past two years, especially in 2023, the share has increased significantly to more than 60%, and the industry head effect is significant;
Aion and BYD occupy half of the operating market, and their share is still rising sharply. The stable competition pattern of the second echelon has not yet been formed, and the operating market pattern is expected to be further reshaped.
Development Trend of Fuel Types
Fuel type
Range-extended sales increased significantly, with a year-on-year increase of 4.2%
Although BEV has maintained its dominant position, its share has declined for two consecutive years. PHEV and range-extended have grown steadily, with range-extended growth being significant. In 2023, sales increased by 172.9% year-on-year, and its share increased by 4.2% year-on-year, but excluding Ideal, the year-on-year increase was only 1.6%.
The number of range-extended products is relatively low, and the launch speed is slow. In 2023, there are 23 models on sale (only 1/15 of BEV), only 11 more than last year (BEV increased by 32 models), and the sales volume of a single vehicle reached 27,300 units, which is significantly higher than BEV and PHEV, but excluding the head car company Ideal, the sales volume of a single vehicle is only 13,000 units.
With the entry of new players, BYD and Ideal's share in their respective fields has been eroded
Compared with PHEV and REEV, the market concentration of BEV is relatively low, with the TOP3 manufacturers accounting for 47.3%, and the competitive barriers are relatively low. For car companies, the market opportunities are relatively greater.
The head effect of PHEV and REEV is more significant. Leading companies BYD and Ideal occupy more than 60% of the market in their respective fields. However, as Geely Galaxy and Haval began to exert their strength in the PHEV market, players such as Deep Blue, AITO, and Leapmotor entered the REEV market, resulting in BYD and Ideal's market share being divided.
The structural distribution of BEV, PHEV, and REEV models is obviously different
BEV market: The competition pattern of micro/compact/medium-sized cars has initially taken shape. The share of micro-small cars has been shrinking in the past two years, the share of compact cars is relatively strong, and the share of medium-sized cars has grown steadily.
PHEV market: Compact cars dominate the market, with a share of more than 50%. After two years of decline, the share of medium-sized and above cars began to rise in 2023, but it has not returned to its peak.
REEV market: Medium and large cars and above occupy the mainstream position, with a share of more than 70%, but in recent years, medium-sized cars have begun to emerge and are expected to reshape the market structure distribution.
Development Trends of Market Segments
Market segments
Sedan and SUV "divide the world", MPV begins to exert its strength, and the penetration rate increases significantly
In the past three years, the share of sedans has continued to decline, from 72.7% in 2020 to 50.4% in 2023. After years of development, the share of SUVs has steadily increased. The current competitive landscape of sedans and SUVs "divides the world" has been initially formed.
Compared with sedans and SUVs, the progress of MPV's new energy is relatively slow, and the penetration rate is significantly lower than the two. However, in 2023, MPV began to exert its strength, and the new energy penetration rate increased significantly to 23.4%, a year-on-year increase of 12%.
Intensive model launch injects vitality into the continued growth of SUVs
The number of SUV products launched has exceeded that of sedans for two consecutive years, but the sales volume of a single car series is still lower than that of sedans. It can be seen that the intensive model launch has injected vitality into the sustained growth of its sales;
Mainstream manufacturers continue to optimize their product structure, reduce their dependence on a single model, and effectively reduce operating risks. Car companies such as Aion, Geely, Great Wall, Weilai, and Xiaopeng continue to enrich their product matrix, and the problem of "imbalanced product structure" has been improved to a certain extent.
The MPV market is obviously high-end, with the price segment of 350,000-500,000 accounting for more than 60%
The price segment distribution of sedans shows a "2:4:2" feature. The market below 50,000 is gradually shrinking, with a new energy penetration rate of 100%, and basically achieving electrification; the share of 100,000-200,000 is steadily increasing, but the new energy penetration rate is 26.7%, which is lower than the industry average (33.8%). As an important segment of the household market, the market potential needs to be further explored.
In the SUV market, 100,000-200,000 and 200,000-350,000 account for more than 80%, but the new energy penetration rate gap is obvious, with 100,000-200,000 only 29.8%, while 200,000-350,000 reaches 40.3%.
The MPV market is obviously high-end, with the price segment of 350,000-500,000 accounting for more than 65%, mainly due to the surge in sales of Denza D9 DM-i, Dreamer PHEV, Trumpchi E9, etc.
Consumption upgrade trend is obvious, and the share of medium-sized cars and above is growing steadily
Although compact cars occupy the mainstream position in the new energy market, the penetration rate is obviously low. 100,000-150,000 is the main selling price segment of compact cars. In this field, new energy vehicle products are insufficient (fuel vehicles are on sale 170+, new energy vehicles 45+). Currently, only popular models such as Qin, Song, and AION S can compete with fuel vehicles.
As the market approaches saturation, the small market has been shrinking in the past two years, showing signs of fatigue and unable to meet the diversified needs of the market; at the same time, the share of medium-sized and above is on the rise, and the trend of consumption upgrade is obvious. In the later period, with the entry of high-quality players such as Huawei and Xiaomi, this market is expected to accelerate expansion.
Mini cars have basically completed pure electric penetration, while compact cars and SUVs are lower than the industry average
Mini cars have basically completed pure electric penetration, but as the market is saturated, sales have dropped sharply; with the help of popular models, small car sales have increased significantly, and the penetration rate is second only to mini cars;
Since reaching its peak in 2019, the share of compact cars has declined year by year, and sales have been surpassed by compact SUVs again, but the penetration rate is lower than the industry average;
The penetration rate of new energy in medium and large SUVs and medium and large MPVs has increased significantly, among which the penetration rate of large SUVs has reached 70%. At present, many car companies use new energy as a breakthrough for brand upward and accelerate the launch of medium and large and above product markets.
The medium and large-sized and above markets are dominated by PHEV and REEV, and lack of explosive pure electric vehicles
The head effect of the micro-small market is significant, with the share of the TOP10 series exceeding 80%. The sales of Hongguang MINI EV was overtaken by Dolphin, down 42.3% year-on-year;
BYD still occupies half of the compact market, and AION S and AION Y performed well, with a year-on-year increase of 3.5% and 3.0% in share;
The concentration of medium and large-sized and above is relatively dispersed. The current main players are BYD and new power brands (luxury brands have fallen out of the list), and they are mainly extended-range and plug-in hybrid, lacking explosive pure electric. Ideal occupies more than 20% of the market with 3 models, and BYD Han's share fell by 9.2% year-on-year.
Manufacturer brand development trends
Independent manufacturers have an absolute advantage, and the share of joint venture manufacturers "stagnates"
With the help of the two core tracks of "electrification and intelligence", independent brands have achieved a reversal in market competition and currently have an absolute advantage. In the past two years, the share has been stable at around 80%, and joint venture manufacturers have stagnated.
On the other hand, there is a significant gap in the penetration rate of new energy between independent and joint venture manufacturers. In 2023, the penetration rate of new energy of independent manufacturers will reach nearly 60%, which is much higher than the industry average, while joint venture manufacturers are struggling on the road of new energy transformation, with a penetration rate of only 6.2%.
The product layout of joint venture brands in China lags behind, and the competitiveness of their products is not as good as that of independent brands
Compared with independent brands, the lagging product layout of joint venture brands in China (the number of products launched is relatively small and the speed is slow) has prevented them from continuing their dominant position in the traditional market on the new track.
After years of difficult transformation, the competitiveness of independent brand products has been significantly improved. From the analysis of "single vehicle sales", the gap between the two has gradually widened, and the sales of independent manufacturers have increased to 18,000 units, which is three times that of joint ventures.
The industry's head effect is significant, and the market competition pattern of "one super and many strong" has been initially formed
The head effect of the new energy vehicle market is significant. The TOP3 car companies BYD, Tesla, and Wuling account for nearly 5% of the market, and the market competition pattern of "one super and many strong" has been initially formed.
Geely and Great Wall began to exert their strength in the new energy track, and their penetration rate increased significantly year-on-year; Ideal took the lead in breaking through the siege among new power brands, and its share increased by 2.6% year-on-year.
The lack of the support of popular models led to Wuling's failure in the micro-small market, with a year-on-year sales growth of only 1%, the lowest among the TOP10 manufacturers, and a year-on-year decline in share of 2.3%.
Regional Market Development Trends
Referring to the traditional fuel vehicle market, the proportion of 4-5 tier cities is relatively low, and the market potential needs to be tapped
The new energy vehicle market has gradually sunk from 1-2 tier cities to 3-5 tier cities. In 2023, its share has increased to 44.5%, but referring to the traditional fuel vehicle market (52.3%), this proportion is relatively low, especially in 4-5 tier cities. It can be seen that low-tier cities still have a large room for development.
Taking the "trend of national new energy penetration rate" as the reference line, the trend of cities at all levels follows the national market, but the new energy penetration rate is differentiated. The new energy penetration rate of 1-2 tier cities leads the country, and 3-5 tier cities
lag behind, especially the penetration rate of 4-5 tier new energy cities is less than 30%.
Urban concentration continues to decline, and new energy vehicles are becoming more and more popular across the country
Compared with 1-2 tier cities, the new energy vehicle market in 3-5 tier cities presents the characteristics of "low concentration, large number of cities, and low sales in a single city". It is difficult for a single brand 4S store to make profits and survive independently, and it is difficult to sink the network channel. In 2023, the sales volume of 1-2 tier cities will be 115,000 units, while that of 3-5 tier cities will be about 10,000 units. It can be seen that the dilemma of the lower level of the industry channel has not been alleviated.
On the other hand, the sales share of the TOP10 cities of all levels is showing a downward trend, the urban concentration is constantly declining, and new energy vehicles are beginning to be promoted and popularized across the country.
The share of medium-sized and above in 1-2 tier cities exceeds 50%, which is much higher than that in 3-5 tier cities
Affected by factors such as urban economic development, consumers in cities of all levels have obvious differences in their preferences for vehicle models, and urban demand preferences show a certain positive correlation with economic development. The commuting distance in 1-2 tier cities is relatively long, and there are many "middle-class" consumers. The share of medium-sized and above "fashionable, comfortable, and smart" exceeds 50%, which is higher than that in 3-5 tier cities.
In recent years, with the upgrading of consumption, micro-sized cars can no longer meet the diversified needs of the market. Their share in 3-5 tier cities has continued to decline, and market demand has continued to penetrate into compact and above models.
New power brands are more popular in 1-2 tier cities, and traditional brands in low-tier cities have more advantages
BYD, with its advantages such as "product layout and channel coverage", will shine in markets at all levels in 2023, especially in 4-5 tier cities, where its share exceeds 40%. Wuling has obvious market advantages in 3-5 tier cities, but with the shrinking of the micro-sized market and the launch of competing products in this market, its market position has been constantly challenged.
The sales channels of Tesla and new car-making forces (the first echelon) are mainly distributed in 1-2 tier cities. Their brand tone of "comfort, intelligence, and fashion" is more in line with the needs of middle-class users in 1-2 tier cities, so these brands are more popular in 1-2 tier cities.
Regions
After years of decline, North China's share began to rebound in 2023, not much different from Central China
East China is the main sales area for new energy vehicles, accounting for about 40%, and South China's share has fallen from 25.7% in 2019 to 16.7% in 2023, which has fallen for four consecutive years; after years of decline, North China's share began to rebound to 12.2% in 2023, not much different from Central China.
In terms of the popularization of new energy, affected by multiple factors such as economy, geography, and temperature, there are obvious differences among regions across the country: the penetration rate of new energy in East China and South China is significantly higher than that in other regions, while the penetration rate of new energy in the western region and Northeast China is not high, with a penetration rate of only 24.3%, which is lower than the national average.
Micro-sized cars are more popular in Central China, while Northeast China and Northwest China prefer medium-sized and above cars
The regional vehicle model structure shows different characteristics, but the trend of change follows the industry market, with micro-sized and compact market share declining, and medium-sized and above rising sharply.
East China: The vehicle model structure is relatively evenly distributed, and the gap between the share of medium-sized, medium-large and above and the share of micro-small and compact is narrowing. South China: Although the share of compact has declined, it still occupies more than 40% of the market. Central China: The share of micro-small continues to decline, but it still accounts for more than 30%, which is significantly higher than other regions. At the same time, the share of medium-sized and above has increased significantly; Compared with other regions, medium-sized and above cars are more popular in the Northeast and Northwest, with a market share of more than 50% in 2023. : Ideal shines, and the share of each region has increased BYD, Wuling, Tesla, and Ideal are firmly in the top 5 sales in each region. BYD ranks first in regional sales, with a share of more than 30% in each region, among which the share of East China and Central China continues to rise, while the share of Northeast and Northwest has declined by 3.5%. Ideal shines, and the share of each region has increased. Wuling has lost all its ground, among which Wuling's share in Central China and Northeast & Northwest has declined by 3.7%, which is higher than other regions. Changan and Hongqi ranked among the top 5 in Central China, Northeast China and Northwest China respectively. Among them, Hongqi's sales in Northeast China and Northwest China were second only to BYD, with a share of 8.1%.
