TMTPOST -- The Chinese auto market saw a significant sales rebound in the past month, buoyed by accelerating new energy vehicle sales, according to the China Passenger Car Association (CPCA).

Credit：Xinhua News Agency

CPCA released on Monday that retail sales of passenger automobiles rose 26% year-over-year (YoY) to 1.386 billion units in February. The retail sales hit the record for February  fell 22.8% month-over-month (MoM), but resumed YoY growth following a 12.1% YoY decreasea month earlier. Sales for January plunged 31.9% MoM.

The auto market started off the year following Chinese New Year, stronger than the same period last year, CPCA noted. It attributed the recovery of momentum to better-than-expected macroeconomic development at home and abroad, the relatively steady consumer confidence, the auto companies’ increasing promotion and marketing activities, and low base in February last year.

New energy vehicles (NEVs), including electric and plug-in hybrid vehicles, became a major force that drove passenger vehicle market in February following Chinese New Year. Retail sales of NEVs surged 79.7% YoY to 686,000 units, down 7.8% MoM, compared with a 10.5% YoY increase and 42.9% decline in sales in January. The penetration rate for the new energy passenger vehicles gained 15 percentage points YoY to 49.5%. From January to February, NEV sales totaled 1.43 million units, representing a 35.5% YoY increase.

In February, the retail share of NEVs of mainstream domestic brands accounted for 73% of total sales, representing an increase of 4.4 percentage points from a year ago, and the share of NEVs made by joint venture brands dropped 1.9 percentage points YoY to 2.1%, CPCA data showed. The share of emerging startups popped 2.6% points YoY to 19.9%, driven by new brands such as Xiaomi, while Tesla's share decreased 4 points YoY to 3.9%.

The wholesale deliveries of Tesla China dived to 30,688 vehicles in February, representing a 49% year-over-year (YoY) decrease, according to the preliminary data from the China Passenger Car Association (CPCA). That suggested Tesla’s China-made wholesale deliveries hit their lowest monthly volume since July 2022, and plunged 51.5% from a month ago.

While retail sales typically reflect consumers’ activity, wholesales more closely align with the number of cars rolling off production lines and act as a better barometer of export demand.Tesla’s deliveries in China were partially affected by the production halt due to upgrade of lines manufacturing its refreshed Model Y sport utility vehicle (SUV) in Gigafactory Shanghai. Excluding the production line upgrade, the wholesale shipments would have been flat from a year ago, Bloomberg Intelligence analyst Steve Man.

However, the significant sales are another sign that Tesla is facing intense competition from Chinese automakers offering a more enticing range of tech-laden and affordable cars. Many Chinese EV manufacturers reported faster delivery pace than January, the off-season for the auto market. That month saw a transition from the national subsidies program last year to a renewed consumer goods trade-in program to stimulate domestic demand and bolster economy this year.

China’s top EV maker BYD Co. Ltd sold 322,846 NEVs in February with a YoY gain of 164% and a 7.4% MoM increase following a 49.2% YoY increase and 41.6% MoM drop for January. Xpeng Inc.'s delivery soared 570% YoY to 30,453 EVs in February compared with a 268% rise a month earlier. Li Auto Inc. deliveries added 29.7% reversing its surprising YoY drop of nearly 4% in the beginning of the year. Nio Inc. deliveries rose 62.2% YoY, accelerating from a 37.9% increase a month ago.