China NEV sales fall 38pc as demand slows

China's new energy vehicle sales fell 38.8 percent in January versus the previous month, the first such drop since August 2023, industry data showed, as demand faltered in the world's largest auto market despite a renewed discounting push led by Tesla.

Vehicle sales, including those exported, totaled 2.44 million, up 47.9 percent from a year earlier but down 22.7 percent from December, the first such slide since November, according to data from the China Association of Automobile Manufacturers.

New energy vehicle sales, accounting for 29.9 percent of total sales, grew 78.8 percent on year in January, the data showed.

Meanwhile, China's commerce ministry said it would encourage the new energy vehicle industry to "actively" respond to foreign trade restrictions and cooperate with overseas firms, amid a European probe into Chinese subsidies for the sector.

The ministry issued guidelines that also encouraged automakers to set up research and development and after-sales service centers abroad, to collaborate with foreign partners in building up supply chains, and to work more closely with shipping companies on transportation logistics.

Under the measures, Chinese banks would be encouraged to expand domestic and overseas services for automakers and their supply chains, including the scale of cross-border RMB settlements.

The ministry also said it would optimize export procedures for NEVs and batteries.