Electric carmakers and subsidies
With the help of huge subsidies and favorable policies, the Chinese government seems to be determined to keep the electric vehicle revolution in the country alive. On June 25, China’s Kandi Technologies (KNDI) announced that its joint venture company Kandi Electric Vehicles Group received a national subsidy payment of 876 million Chinese yuan or ~$127.7 million from the government.
Last month, NIO (NIO) announced that one of China’s state-owned funds, E-Town Capital, will likely invest nearly 10 billion yuan in the company. The move could help NIO since the Chinese government’s subsidies on electric cars are phasing out.
At 11:30 AM ET on June 25, Kandi Technologies was trading with 2.5% gains for the day, while NIO stock fell 2.3%.
On a year-to-date basis, Kandi has risen 30.9%. In contrast, NIO stock has fallen 58.6% in 2019.
Chinese electric vehicle revolution
In 2019, China’s auto industry is facing troubles due to declining auto sales in the country. According to data compiled by MarkLines, new vehicle sales in China fell 16.4% YoY (year-over-year) in May. The country’s new car sales have fallen 13.0% YoY in 2019.
China reported a 1.8% YoY rise in its new energy vehicle sales, which included a 1.4% increase in its battery electric vehicle sales in May. According to data from China’s Association of Automobile Manufacturers, China’s electric car sales rose nearly 62% to ~1.3 million units in 2018.