The Covid-19 outbreak suppressed already weak demand in China for electric vehicles and created a scarcity of auto parts which drove a record 77% year-on-year drop in sales for February, according to the latest figures from a Chinese auto industry association.

Why it matters: February marks the eighth consecutive month of decline in the world’s largest EV market since the central government announced a more than 50% cut in purchase subsidies beginning in June.

  • Beijing later suspended its plan to completely phase out EV subsidies. Local governments from Guangzhou and Hunan last week announced the resumption of regional-level incentives to boost sales.

Details: Sales of new energy vehicles (NEV) in February plunged 77% compared with the same month a year earlier to around 11,000 units due to the Covid-19 outbreak, the China Passenger Car Association (CPCA) said on Monday.

  • The general passenger vehicle market also sank, falling 82% to around 217,900 units last month, according to CPCA, which records sales from manufacturers to dealerships.
  • Accordingly, February sales for China’s two biggest EV makers, BYD and BJEV, had more than halved. Warren Buffet-backed BYD sold 2,803 units last month, down by four-fifths compared with the same period a year earlier, while BJEV reported monthly sales of only 1,002 units, around one-third the number sold in February 2019.
  • CPCA said automakers in China were digesting the work backlog over the past few days while struggling to resume operations at full capacity given the length of the auto supply chains.
  • Only a third of 183 car manufacturing bases in China had reopened as of Feb. 12. An updated number from earlier in March showed the number had shot up to 84%, according to the Ministry of Industry and Information Technology.
  • CPCA expects the February drop to be the biggest for the year and that the market is on its way to recovery as China’s workforce begins returning to work, it said in a weekly report released last week, although it cut its forecast for annual auto sales growth from 1% to -8% on Monday.

Context: After the government began slashing purchase subsidies in June, China’s NEV sales decreased in 4.7% year on year in July to 80,000, falling for the first time in more than two years. This was followed by a double-digit drop each month for the seven months since.

  • The central government is planning to unveil fresh support measures to boost NEV sales, China’s state-owned Securities Times reported last week without revealing further details, including all-electric cars, plug-in hybrids, and fuel cell vehicles.

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: or Twitter: @yushan_shen

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