China NEV retail sales drop 20% in first 27 days of September as EV demand slump deepens

• China's NEV retail sales totaled 827,000 in September 1-27, accounting for 65.7% of passenger car sales.
• Overall passenger car retail sales totaled 1.258 million, down 29% year-on-year.

China's retail sales of new energy vehicles (NEVs) fell 20% year-on-year in the first 27 days of September, a steeper decline than in the first 20 days, but still outperformed the broader passenger car market.

Retail sales of passenger NEVs in China totaled 827,000 in September 1-27, up 2% from the same period in August, according to the latest weekly report from the China Passenger Car Association (CPCA).

By comparison, NEV retail sales in the first 20 days of September fell 9% year-on-year and rose 14% from the same period in August, indicating mounting pressure as the reporting period extended.

NEVs accounted for 65.7% of China's passenger car retail sales in the first 27 days of September, down from 67.9% in the first 20 days, but still representing nearly 2 out of every 3 vehicles sold.

Year-to-date retail sales of passenger NEVs in China totaled 7.5 million, down 13% year-on-year, reflecting continued pressure on domestic demand.

The broader market posted a larger decline. China's passenger car retail sales totaled 1.258 million in September 1-27, down 29% year-on-year and up 1% from the same period in August.

Overall passenger car retail sales had fallen 22% year-on-year in the first 20 days of September. Year-to-date sales totaled 12.97 million, down 22%.

A buying rush ahead of subsidy suspensions in some regions last September pushed monthly retail sales to a record high, creating a high comparison base for this year, the CPCA said.

In the fourth week of September, daily passenger car retail sales averaged about 54,000, down 42% year-on-year and 13% from the same period in August. The CPCA attributed the sharp annual decline partly to a shift in the timing of the Mid-Autumn Festival holiday.

Wholesale sales also weakened. China's passenger NEV wholesale sales totaled 1.032 million in September 1-27, down 11% year-on-year and 7% from the same period in August.

That contrasted with growth of 8% year-on-year and 25% from the same period in August during the first 20 days. Still, year-to-date NEV wholesale sales rose 7% to 10.81 million.

NEVs accounted for 70% of passenger car wholesale sales in the first 27 days of September. Overall passenger car wholesale sales totaled 1.474 million during the period, down 30% year-on-year and 12% from the same period in August.

This year's traditional "Golden September" sales season is marked by competition for existing demand, with incremental demand concentrated mainly in NEVs as demand for gasoline-powered vehicles continues to be squeezed, the CPCA said.