Jing Ji Guan Cha Wang·2025-09-13 08:38Core Viewpoint - The A0-level small electric vehicle market in China is experiencing a significant revival driven by declining battery costs, increased policy support, and enhanced product capabilities [2][3][8]. Group 1: Market Trends - The A0-level electric vehicle market has seen three notable peaks, with the most recent resurgence beginning in 2023 after a decline in 2022 due to rising costs and reduced subsidies [3][6]. - In the first two months of 2023, A0-level electric vehicle sales dropped by 58% year-on-year, while higher segments saw growth [3][4]. - By mid-2025, major brands like Extreme Fox, Wuling, MG, and Chery are expected to enter the A0-level market, indicating a full recovery of this segment [7]. Group 2: Cost and Policy Factors - The price of lithium carbonate, a key battery material, surged over tenfold from late 2020 to early 2022, significantly impacting the profitability of A0-level electric vehicles [3][5]. - The reduction of subsidies by 30% in 2022 further exacerbated the challenges faced by A0-level electric vehicles, with per-vehicle subsidies decreasing by thousands of yuan [5][9]. - In 2023, lithium carbonate prices began to decline, allowing manufacturers to adopt a "low-cost, no-loss" business model in the A0-level market [8]. Group 3: Product Development - New A0-level electric vehicles are now equipped with advanced features, breaking away from the "cheap transportation" image, with ranges exceeding 500 kilometers and enhanced smart configurations [2][10]. - The latest models, such as the MG4 and Wuling Bingguo S, offer competitive dimensions and battery performance, appealing to a broader consumer base [10][11]. - Recent policy changes have mandated higher technical standards for electric vehicles, pushing manufacturers to improve battery performance and technology [11]. Group 4: Market Dynamics - The A0-level electric vehicle segment is becoming increasingly competitive, with a penetration rate of 68.7% in the passenger vehicle market by 2024, second only to the fully electrified A00 segment [12]. - Leading brands are showing significant sales growth, with BYD's Dolphin and Seagull models leading the market [12][13]. - The market is expected to diversify further, with the introduction of various body styles such as SUVs and sedans to meet different consumer needs [13].