As I have mentioned before, apart from all the one time effects that hurt EV sales in China in January, there is always a strong seasonality effect on car sales with December being the strongest month and January / February being the weakest month. This doesn't only apply to EVs or China only. It applies to cars in general and can also be observed outside of China where there are not so many lunar new year holidays. That being said, as Joe Lowry also pointed out, China will not hesitate to adjust policies and may even reintroduce some form of EV subsidies if sales should not follow the desired path. After the federal NEV purchase tax exemption expired at the end of last year some regional / municipal governments started granting some kind of substitute benefits to make up for the expiration. And as I have also mentioned before I expect March to be the first month without major headwinds that should give us a good indication where the NEV market in China is heading this year. A sales number close to the December result would be good. But we have to keep in mind that the sales number in December profited from early sales, because many people wanted to still get the purchase tax exemption. This should almost not matter anymore in March, the third month after the expiration.
