(Yicai Global) Feb. 14 -- Sales of new energy vehicles in China will continue to surge this year despite a cut in purchase subsidies and increasing raw material costs, according to a leading industry group.

NEV sales are expected to jump 70 percent to about 5 million units this year, the China Passenger Car Association said at a virtual seminar today.

January’s sales surged 132 percent from a year earlier to 347,000. The top three sellers were BYD, Tesla and SAIC-GM-Wuling Automobile, the association said. The NEV penetration rate was 16.6 percent, up 10 percentage points from a year ago.

NEVs also made up 30 percent of the 169,000 passenger cars exported in January, with 40,499 from Tesla China, 4,814 from SAIC Motor Passenger Vehicle and 4,267 from eGT New Energy Automotive. Exports were up 91 percent from a year before. 

At 2.1 million units, overall car sales fell 4.4 percent on the year and 0.6 percent from December, but the sales trend is generally stable, the CPCA said. People returning to their hometowns for the lunar new year holiday buoyed car buying in smaller counties and towns as vendors stepped up promotions. 

Of the 2.1 million vehicles sold in January, 290,000 were luxury cars, a 5 percent drop on the year. Domestic brands had 45.5 percent of the market, with sales jumping 11 percent year on year to 940,000.

Meanwhile, sales of vehicles from joint venture brands fell 17 percent on the year to 860,000. The top three were FAW-Volkswagen Automobile, Chongqing Changan Automobile and SAIC Volkswagen Automotive. 

Editor: Tom Litting