BEIJING: New energy vehicle makers (NEV) in China will see tougher competition in 2024 although the sector is expected to continue its momentum, experts warn.

       The China Passenger Car Association (CPCA) expects NEVs, which include fully electric vehicles (EVs) and plug-in hybrids, to account for 40% of new vehicle sales this year.

       It forecast that total sales this year will reach 11 million units, around 2.3 million more than in 2023, which saw fierce competition but ended well for many companies.

       Cui Dongshu, secretary-general of the CPCA, said the competition will be just as fierce this year because many are not making a profit despite sales growth.

       He was echoed by Zhang Yongwei, secretary-general of China EV100, an industry think tank.

       Zhang said he is optimistic about China’s NEV market and expects sales to reach two trillion yuan (US$280.6bil) this year. But he was quick to add that despite the growing demand for NEVs, competition will be fierce.

       “This year will prove (to be) a make-or-break year for many as we see an accelerated reshuffling in the NEV sector. For many, it means growth but for many others, it will be harder to even survive,” said Zhang.

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       He said the price war, which was started by Tesla in early 2023 and continued throughout the whole year, might continue into 2024.

       Also, many new cars are entering the market, grabbing buyers’ attention. In the last week of 2023 and the first week of 2024, at least six EVs were launched, including the Xpeng X9 MPV on Jan 1.

       He Xiaopeng, chairman of Xpeng, said the company will rush to ramp up production even during the Spring Festival holiday.

       He said the intense competition in China’s NEV sector will continue for at least three years from 2024 and some may lose their foothold during that period.

       For example, technology companies are joining the fray alongside carmakers to win a slice of the burgeoning market.

       The China Association of Automobile Manufacturers (CAAM) said sales of NEVs were expected to have hit nine million units nationally in 2023. It is scheduled to release the statistics in mid-January.

       In the first 11 months of 2023, NEV deliveries totalled 8.3 million units, up 36.7% year-on-year (y-o-y), according to the CAAM.

       Huawei, which launched the Aito M5 in 2022, is wooing buyers away from established carmakers, thanks to its huge following and cutting-edge autonomous driving functions.

       It said orders for the Aito M9, a sport-utility vehicle (SUV) co-developed with Chinese carmaker Seres, surpassed 30,000 in a week since its launch. The model’s mass deliveries are set to begin in February.

       Chinese smartphone maker Xiaomi unveiled its first vehicle in late December, aspiring to compete with prestigious companies including Porsche and Tesla.

       The model has dimensions similar to BMW’s 5 Series and is scheduled to hit the market in early 2024.

       Lei Jun, chief executive officer of Xiaomi, said its SU7 sedan outperforms Porsche’s electric four-door Taycan and Tesla’s Model S in such aspects as acceleration from zero to 100 kms per hour and mileage on one charge.

       He said the company is expected to join the ranks of top-tier players in terms of autonomous driving in 2024. — China Daily/ANN