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Chinese auto sales rise 2.4% as consumers look to make use of ending EV subsidies

Yahoo Finance’s Pras Subramanian discusses the outlook for Chinese EV makers, Tesla price cuts, and more.

Video Transcript

RACHELEL AKUFFO: Now to the global demand story. Auto sales in China rose 2.4% in December as consumers looked to make use of ending subsidies for electric vehicles. Well, for more on what's next for the world's largest car market, let's get to Yahoo Finance's Pras Subramanian. So what's going on here, Pras?

PRAS SUBRAMANIAN: So you saw that slight uptick in December as buyers sort of pushed forward some of their purchases because they wanted to take advantage of those ending government subsidies, right? So we saw that happen there. But also analysts are expecting some pain to come in January because we saw those incentives. And plus, also, you have the January holiday, the new year's holiday in China, which is going to shut down the economy for about 10 days or so. So we'll see some pain there.

Analyst at JP Morgan saying it's going to be called a transitional pain period, that end of the month, January and February region, because of the fact of those sort of slowdown in purchases. So the result has sort of led to a lot of price cuts in automakers there. You saw Tesla last week doing this as their sales fell 41% in December compared to a year ago, a very kind of stunning sort of collapse there in terms of sales because of the fact that there's been a lot of competition in that space.

Nevertheless, the CPCA, which is the Chinese Passenger Car Association, they see new energy sales via its hybrids and EVs. Sales hitting 8.5 million this year. They'll be 36% of overall sales for the market.

RACHELEL AKUFFO: We'll be keeping an eye on that as China continues to reopen, perhaps see some of that demand bouncing back. Pras Subramanian, thanks so much.