The Chinese government has released preliminary figures on corporate average fuel consumption (CAFC) and CAFC credits and new energy vehicle (NEV) credits for 2023 for companies producing and importing passenger cars in China in April 2024.

In the preliminary CAFC and NEV credit figures for 2023, BYD and Tesla, which lead in NEV sales, are the top performers; of the top 20 companies for NEV credits, 15 are Chinese-owned companies (on a corporate basis). The government will check the companies’ reported values (preliminary figures) by the end of June before announcing the final figures in July, after which the credits will be ready for trading.

In contrast, only three of the bottom 20 companies are Chinese-owned. This once again highlights the fact that Chinese-owned companies are focusing on the NEV business and foreign-owned companies are lagging behind. Japanese companies Guangqi Toyota, Guangqi Honda, FAW Toyota (Chengdu), Dongfeng Honda and Changan Mazda all rank in the bottom ten. For these companies, there is an urgent need to enhance their line-up of NEV products to match consumer preferences.

Emerging NEV manufacturer Ideal Automobile’s net profit/loss turned profitable, while Xiaomi (Xiaomi) is a new market entrant; in 2023, the market size of new energy vehicles in China (on a factory shipment basis) grew by 38.2% year-on-year to 9.481 million units (of which 1.205 million units were exported, up 77.4% year-on-year). This paper summarises the business trends of a total of six emerging manufacturers specialising in NEVs – NIO, Xiaopeng Automobile (Xpeng), Ideal Automobile (Li Auto), Hezhong New Energy Source (哪吒汽車) (Neta), Leapmotor (零跑汽車) and Xiaomi Auto (小米汽車) – since October 2023. 2023. In terms of sales performance in 2023, Ideal Motor, which only handles range-extender EVs (REEVs), took over the top sales position of emerging manufacturers with 376,000 units, becoming the first emerging manufacturer to achieve a return to profitability in terms of net profit or loss. It plans to enter the NEV market and launch its first mass-produced model at the end of March 2024.

Many of China’s emerging manufacturers are increasing their sales volumes and revenues in line with the growth of the new energy vehicle (hereafter NEV = EV+PHEV+FCEV) market. On the other hand, their profits are currently under pressure due to investment in product development and the development of recharging networks. Against this backdrop, Ideal Automobile’s net profit/loss for 2023, which turned positive for the first time, has attracted industry attention. The reasons for Ideal Automobile’s good performance were analysed as increased sales volume, improved management efficiency and reduced procurement costs, etc. Although the first EV model was launched in March 2024, sales are struggling and there are concerns that Ideal Automobile’s profits will shrink in 2024.