BEIJING (Reuters) -Sales of electric passenger vehicles in China rose 10.5% in March from the same month a year earlier, industry data showed on Tuesday, as automakers led by popular BYD (SZ:002594) deepened discounts and offered financing tools to boost sales.
For January-March, sales totalled 1.03 million EVs, up 14.7% on year and the slowest quarterly growth since the second quarter of 2023, the data from the China Passenger Car Association (CPCA) showed.
New energy vehicles (NEV) including all-electric models and plug-in hybrids made up 41.5% of overall passenger car sales in March, which jumped 5.7% to 1.71 million vehicles.
Authorities have joined automakers in trying to convince consumers to buy cars to help jumpstart a sluggish economy. Initiatives include revising car loans to promote auto trade-ins and scrapping government-set minimum down payments for new-car purchases.
The launch of an electric sedan by electronics maker Xiaomi (OTC:XIACF) last month prompted rivals to announce further price cuts and subsidies.
BYD, which ceded the top EV seller title to U.S. peer Tesla (NASDAQ:TSLA) in the first quarter, in March lowered starting prices for nine models including four under its premium brand Denza by 4% to as much as 20.5%.
BYD Chairman Wang Chuanfu forecast falling profit margins this year as the price war intensifies, but said the automaker would ensure stable profitability by improving sales. It is targeting 20% sales growth this year.
The auto sector's profit margins have fallen to 4.3% from 8.7% in 2015, said Cui Dongshu, the CPCA's secretary general.
Tesla hiked Model Y prices in China by 5,000 yuan ($691.24) starting April 1, but also offered a time-limited zero-interest financing scheme for buyers of the base Model 3 model.
Volkswagen (ETR:VOWG_p) and Nio (NYSE:NIO) have also launched auto financing plans with low interest rates to attract buyers.
Tesla exported 26,666 China-made vehicles in March, down 11.8% from the previous month, the association data showed. China's overall car exports jumped 39% to a record monthly high of 406,000 units in March, quickening from February's 18%.
In response to comments by Treasury Secretary Janet Yellen on how Washington would not allow Chinese exports to decimate the U.S. industry, Cui said: "China's new energy vehicle sector has yet to reach severe overcapacity levels and the current reasonable output bodes well for consumers and a market-oriented economy."
($1 = 7.2334 Chinese yuan renminbi)