Thousands of Abandoned China EVs in the Context of Millions of Car Inventory

Anti-China channels are reporting of thousands of abandoned EVs. It is unclear exactly when the video of the registered EV in fields were taken. Thousands and even tens of thousands of sold and abandoned vehicles does not necessarily make a big deal in the big picture. There are normally millions of cars on dealer lots in the US and China. There is also a large number of unsold used cars.

Cumulatively, used car prices in the USA have dropped -20.87% at the wholesale level over the past 8 months. US used car inventory was at 1,767,684 at the beginning of May, a 4.07% increase in availability from the beginning of April 2023.

The big picture is that used and new car prices are declining. New and used car prices were temporarily inflated during the COVID supply chain crisis. Selling new and used cars is difficult in the tough business climate in the US, China and Europe. There is a continuing transition to pure electric cars, which is about 30-35% of China car sales and about 10% of US new car sales. Domestic carmakers in china have increased their share of the China car market from 36% in 2020 to 53% today. Japanese, US and European carmaker joint ventures have lost a lot of market share in China. There are a lot of unsold cars in China. Many of the unsold cars do not qualify for sale under China’s new emission rules. Sixty days of car inventory is the normal level.

Kelly Blue Book’s parent company, Cox Automotive, reports the average US dealership has achieved a 56-day supply level, just a few cars off from the 60-day industry standard. It’s also 58 percent higher than just one year ago, says Cox. The US had 1.375 million cars sold in May, 2023. 56 days of inventory would be 2.6 million cars on dealer lots.

China reported in that at the end of February, 2023 there were 3.41 million cars in stock. It is estimated that the China inventory can support retail sales for 64 days.

The inventory of Chinese brands is equivalent to 54 days of sales, the stock of joint venture garages is 64 days, and the stock of luxury brand cars is equivalent to 70 days of sales. 75% of China’s car inventory is ICEs, while the rest is PHEVs and EVs. Considering that PHEVs and EVs account for more than 35% of the total sales in the Chinese market, EVs’ stock is equivalent to approximately 40-50 days of sales. ICEs’ stock is equivalent to approximately 70 days of sales.

China’s used car market is expected to see a steady recovery this year, with a sales volume possibly reaching 20 million units, industry data showed. In January, 2023 about 1.25 million second-hand vehicles were traded in China, with a total transaction value of 78.03 billion yuan ($11.36 billion), according to the China Automobile Dealers Association. The China used car trade volume went down 15.93 percent year-on-year.

In 2019, China had 1.2 million NEVs were sold out of 25.8 million units (4.7%).
In 2022, China had 6.9 million NEVs were sold out of 26.9 million units (25.6%).