New electric vehicle (EV) sales in China plunged in November for the fifth consecutive month, extending a decline that we've been highlighting for the past 1.5 years.
Last month, we noted how China's EV bubble continues to deflate, mostly due to a reduction in government subsidies over the summer.
China's EV slump in November was shocking, and sales plunged 43.7% on year to 95,000 units after October recorded one of the fastest declines for the year, reported China Association of Automobile Manufacturers (CAAM).
CAAM said last month that EV sales plunged 45% in October Y/Y.
"Because of the insufficient demand of the domestic market, the pressure for automakers to upgrade their technology to the national standard, and the major subsidy cuts for new energy vehicles, the recovery of production and sales is still limited," said Chen Shihua, assistant secretary-general of CAAM.
CAAM warned that the EV market would continue to deteriorate through 2020. It won't be until the global economy troughs that the industry could stabilize.
The slowdown also hurt battery manufacturers as the EV slump in China weighs on Lithium prices.
At a press conference on Thursday, CAAM said China's overall auto sales are expected to dip 2% to 25.3 million units.
And while China's overall auto market continues to rapidly slow, Tesla has started to unveil some of its Chinese-built vehicles last month.
Of course, Tesla is setting up shop at the time when the EV market is going bust, and the overall auto industry wanes.
As we've mentioned before, China is the epicenter for the global auto market, and partly the reason why the industry is sliding into a recession.
In a series of charts, Bloomberg shows the current crosscurrents affecting auto markets in top regions.
The first shows that global auto sales peaked two years ago at slightly under 86 million on an LTM basis. In October, that number stood at 78 million, a decline of about 9%.
The second chart shows trends from across the globe, noting that since China's market is so big, that it is been obscuring falling trends elsewhere in the world.
The chart shows China, Asia ex-China, North America, Europe, Latin America and Africa/Middle East all in steep downtrends.
North America and Europe could be argued to the be healthiest regions out of all of these, but the trends are still moving in the wrong direction.
Looking deeper into Asia ex-China, which still includes major countries like Japan and India, we see that all other markets across the continent are lower. Japan is the healthiest, relative to others, and South Korea, Malaysia and Singapore are all within 10% of their peak.
The third chart sums up the grim picture across Asia, despite these small points of optimism.
And finally, China's EV bust shows how government subsidies fueled a bubble that is now imploding.
Recall, as we reported days ago, it's looking like Beijing isn't so excited to help sustain the EV niche of the market anymore.
The EV boom in China appears to be over at the moment, this could be bad news for Tesla, but more importantly, the overall auto industry continues to wane, which means the global economy will likely remain stagnate in 2020.