In a remarkable turn of events, the primary Chinese manufacturers of electric vehicles (EVs) experienced a substantial upswing in their sales during the month of June.

This surge can be attributed to pent-up demand, following a period of lackluster sales, and is seen as a promising sign for an industry that plays a vital role in China’s economic recovery.

Li Auto, headquartered in Beijing, achieved an unprecedented milestone by delivering a staggering 32,575 vehicles last month.

This figure represents a 15.2% increase compared to May, marking the third consecutive month of record-breaking sales for the EV manufacturer.

Meanwhile, Nio, based in Shanghai, witnessed a significant surge in sales as well. The company handed over 10,707 cars to customers in June, representing a three-quarter increase from the previous month.

Similarly, Xpeng, headquartered in Guangzhou, experienced a noteworthy 14.8% month-on-month jump in deliveries, reaching an impressive total of 8,620 units.

This marks the highest monthly sales volume for the company thus far in 2023.

Gao Shen, an independent analyst based in Shanghai, expressed his belief that the carmakers can anticipate robust sales in the second half of the year.

He attributes this optimism to the fact that numerous drivers, who had been waiting on the sidelines for several months, have finally decided to pursue their plans of purchasing EVs.

According to Gao Shen, the introduction of new models by these companies will play a pivotal role in reshaping the industry.

These three EV manufacturers, all publicly listed in both Hong Kong and New York, are considered China’s formidable response to the American giant, Tesla.

They have been striving to catch up with Tesla in terms of sales within mainland China by focusing on developing intelligent vehicles equipped with high-performance batteries, preliminary autonomous driving technology, and advanced in-car entertainment systems.

Tesla does not disclose its monthly sales figures for the Chinese market. However, data from the China Passenger Car Association (CPCA) revealed that the company’s Gigafactory in Shanghai delivered 42,508 vehicles to mainland customers in May, representing a 6.4% increase from the previous month.

The impressive delivery numbers from these Chinese EV manufacturers align with the optimistic predictions made by the CPCA.

In a recent forecast, the CPCA estimated that approximately 670,000 pure electric and plug-in hybrid vehicles would be delivered to customers in June.

This reflects a 15.5% increase from May and a substantial 26% increase compared to the same period last year.

Earlier this year, a price war erupted in China’s automotive market as both EV and petrol car manufacturers vied to attract consumers who were concerned about the economy and their financial situations.

To retain their market share, many carmakers resorted to slashing their prices by up to 40%. However, these deep discounts failed to stimulate sales, as cost-conscious consumers held back, anticipating even more significant price reductions in the future.

Nevertheless, the tides have now shifted, and Chinese motorists who had been waiting on the sidelines for further price cuts have decided to enter the market, realizing that the opportune moment has arrived. Citic Securities released a research note indicating this shift in consumer behavior.

In a bid to invigorate its lackluster sales in the fiercely competitive mainland market, Xpeng recently priced its new model, the G6 sport utility vehicle (SUV), at a 20% discount compared to Tesla’s highly popular Model Y.

This strategic move aims to attract more customers. During the 72-hour presale period in early June, the G6 received an impressive 25,000 orders.

The vehicle boasts a limited self-driving capability using Xpeng’s cutting-edge X NGP (Navigation Guided Pilot) software, allowing it to navigate the streets of China’s major cities such as Beijing and Shanghai.

The electric vehicle sector remains one of the few bright spots in China’s gradually slowing economy.

According to analyst Paul Gong from UBS, sales of battery-powered vehicles in mainland China are projected to increase by 35% this year, reaching a total of 8.8 million units.

It is worth noting that this growth forecast is significantly lower than the remarkable 96% surge witnessed in 2022.