China’s Li Auto releases the details of its sales. It reported a net profit of 265 million yuan ($38 million) for the last quarter of 2022. Its sales of family-friendly sport-utility vehicles zoomed 66% for the previous year. However, there was an operating loss, despite the overall profit. The gains also include form interest income and investments rather than solely from sales.
Unlike other battery-powered groups, Li offers “extended range electric cars” that combine a motor with a smaller battery. They require less frequent charging, thereby assuaging would-be buyers’ range anxiety. It also means it needs less of pricey raw materials such as lithium, making it easier to manage costs and supply chain snarls.
These supports look fragile. For a start, non-operating income fluctuates. Policymakers are also pressing for purer electric vehicles: in Shanghai, which contributed 6.5% of Li’s 2022 sales volume according to Bernstein, its hybrids no longer benefit from a scheme helping drivers skip the queue for a license plate, for instance. Li sees the direction of travel and will soon launch 100% battery-powered products.
2022 sales
In December 2022, auto sales in China were down 8.4% year over year to 2.56 million units. This marked the second consecutive month of year-over-year decline since May. Surging COVID infections weakened demand and kept buyers away from showrooms. While the overall car market stalled and automakers suffered production disruptions, sales of new energy vehicles (NEVs) continued their run on the fast lane. NEV sales rose 51.8% to 814,000 units last month.
For the full year, NEV sales rocketed 93.4% year over year to 6.89 million units. China further cemented its position as the biggest EV market in 2022, aided by favorable government policies and subsidies along with high oil prices. Led by the electrification boom, the market share of NEVs in China’s auto sales hit 25.6% last year, up from 13.5% in 2021. BEVs comprised 73% of total NEV sales and jumped 81.7% in 2022. This is from the data released in January.
Furthermore, BYD hit a new record by selling 235,197 plugin vehicles in December. This was the fourth straight month when the plugin vehicle sales volumes of the company crossed 200,000 units. It sold 683,440 vehicles in the fourth quarter of 2022, up 157%. For the full year, the company sold 1,863,494 NEVs, up a whopping 209% year over year. Of the total sales, battery-powered EVs accounted for around 49%. BYD delivered 911,140 pure EVs last year, rocketing 184% year over year. NIO delivered a record-setting 40,052 vehicles in the fourth quarter of 2022, representing a year-over-year uptick of 60%. XPeng delivered 22,204 units in the three months that ended Dec 31. 2022.
