BOCOM INTL: Penetration rate of new energy vehicles is expected to reach 47.6% in 2024, and the new round of national subsidies is expected to drive consumption in the car market.

BOCOM INTL released a research report stating that under the stimulus of the old-for-new and scrappage subsidy policies, the retail sales growth of China's passenger car market is expected to reach 5.5% in 2024, with new energy vehicles penetration reaching 47.6%. On January 8, 2025, a new round of consumer goods old-for-new policy was introduced, further expanding the scope of support for scrappage renewal of cars. Looking ahead to 2025, the scope and intensity of subsidies for passenger cars are expected to continue to increase, and the new energy passenger car market is expected to maintain its current high growth momentum, with the penetration rate of new energy vehicles expected to further increase to 60% in 2025. The main points of BOCOM INTL are as follows: - In 2024, passenger car retail sales volume increased by 5.5% year-on-year, with a 12% increase in December - Benefiting from the old-for-new and scrappage renewal policies, coupled with efforts by various enterprises to reach their annual targets towards the end of the year, the passenger car market in December 2024 maintained a high level of prosperity, with national retail sales of 2.635 million vehicles (12%/8.7% year-on-year/month-on-month); with a total of 22.894 million vehicles sold in 2024, an increase of 5.5% year-on-year. In December, independent brands maintained strong momentum, with retail sales of 1.64 million vehicles, an increase of 12% year-on-year and 8.7% month-on-month, with the national retail market share of independent brands increasing by 9.3 percentage points to 62.3% year-on-year; the cumulative market share of independent brands in 2024 was 61%, an increase of 8.6 percentage points compared to the same period last year. In December, mainstream joint venture brand retail sales reached 710,000 vehicles (11%/17% year-on-year/month-on-month), with German/Japanese/American brand retail market shares of 16.2%/13.4%/6.7% (decreasing by 4.4/-3.6/-0.1 percentage points) year-on-year. - In 2024, new energy vehicle retail sales increased by 40.7% year-on-year, with a penetration rate of 47.6% - In December, the retail sales of new energy vehicles reached 1.302 million vehicles (37.5%/2.6% year-on-year/month-on-month), with a penetration rate of 49.4%, an increase of 9.1 percentage points from the same period last year. The cumulative sales of new energy vehicles in 2024 reached 10.899 million vehicles, an increase of 40.7% year-on-year, with a penetration rate of 47.6%. In terms of brands, independent brands had a high penetration rate of 71.3% for new energy vehicles in December, while the penetration rates for luxury/joint venture brands were 33.9%/4.8% respectively. BYD Company Limited sold 403,000 vehicles, with a market share of 15.1%. The overall retail market share of new energy vehicles increased by 0.2 percentage points to 17.2% year-on-year. - In 2024, passenger car exports increased by 25% year-on-year, with a 6% increase in December - In December, the total number of passenger cars exported (including complete vehicles and CKD) was 404,000 vehicles, a year-on-year/month-on-month increase of 6%/2%; with a total of 4.791 million passenger cars exported in 2024, an increase of 25% year-on-year. In December, the export of new energy passenger cars reached 122,000 vehicles, an increase of 21.5%/52.9% year-on-year/month-on-month, with new energy vehicles accounting for 30% of the total exports, a year-on-year decrease of 3 percentage points. In December, independent brands exported 345,000 vehicles, with a year-on-year/month-on-month increase of 4%/1%. Investment insight: It is recommended to pay attention to the quality targets in the passenger car sector, such as BYD COMPANY (01211) DM5.0 model + export and the new car cycle of XPENG-W (09868)/NIO-SW (09866) (M03/P7+/L60).