Sales of new energy vehicles (NEVs) in China fell by 4.7% to 80,000 units in July 2019 from 84,000 units a year earlier, according to wholesale data released earlier this week by the China Association of Automobile Manufacturers (CAAM).
This is the first time since early 2017 that this segment of the market, which mainly comprises electric and hybrid vehicles, has posted a year on year monthly decline.
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Subsidies for NEVs were cut again at the end of June, prompting buyers to bring purchases forward ahead of likely price hikes.
The association's deputy general secretary, Xu Haidong, said dealers also offered heavy discounts in June as they wanted to sell off stocks of conventional vehicles ahead of the introduction of new State VI emissions standards in 15 major municipalities and that also diverted buyers away from the NEV segment.
The government has been cutting subsidies and incentives for NEVs since last year, choosing instead to impose mandatory sales quotas on vehicle manufacturers to ensure this segment continues to grow over the long term.
In the first seven months of the year, the new energy vehicle segment was almost 50% higher at 699,000 units, compared with 496,000 units in the same period of last year.
CAAM still expects NEV sales to reach 1.5m-1.6m units this year, up from 1.26m last year.
