(Yicai Global) Jan. 11 -- Thirty-six percent of all passenger cars sold in China this year will be new energy vehicles, according to the China Passenger Car Association.

Passenger car sales will likely jump 14.4 percent from last year to 23.5 million in 2023, of which 8.5 million will be NEVs, the CPCA said at a press conference yesterday. But demand for NEVs will be weak in the first quarter, the industry group added.

NEVs, which include all-electric and hybrid vehicles, accounted for 27.6 percent of passenger car sales in 2022, up from 15 percent in 2021.

Total car sales last year edged up 1.9 percent to 20.54 million after an almost 1.5 million additional units were sold in the second half compared with a year earlier thanks to a cut in the tax on buying fossil fuel-powered vehicles. NEV sales soared 90 percent to 5.7 million.

Last month, about 2.2 million cars were sold, up 3 percent from a year ago but down 9.1 percent from November. NEV sales jumped 35 percent to 640,000. BYD, SAIC-GM-Wuling Automobile, and Tesla were the top three sellers at 234,598, 85,632, and 55,796 units, respectively.

Competition between carmakers will become fiercer this year, the CPCA said. Tesla’s substantial price cuts have sparked concerns about a price war, but CPCA Secretary-General Cui Dongshu said Chinese automakers are unlikely to follow the US electric vehicle giant because the market is sluggish ahead of the forthcoming Spring Festival.

“The prices of NEVs have dropped faster than those of fuel vehicles,” Cui said. “The cost of lithium carbonate is high, but there are signs of a decline recently.”

“Carmakers will likely release new models and improve their product competitiveness to adjust the market in February or March,” he added.

NEV technologies are improving at a much faster pace than those of fuel cars, and EVs have the advantage of fast-improving battery and smart technologies, the CPCA pointed out.

Editor: Futura Costaglione