(Yicai Global) Nov. 10 -- A turning point is appearing in China’s commercial vehicle market, according to Fan Xianjun, chief executive of Farizon Auto, a new energy commercial vehicle business subsidiary of Chinese private auto giant Zhejiang Geely Holding Group.

Sales of traditional fuel-commercial cars are falling, while that of new energy- commercial vehicles are rising, forming a strong contrast, he said recently.

Fan pointed out that before 2018, China’s new energy commercial vehicle market was basically driven by policy, but this year’s situation is completely different, with market power slowly increasing.

It is expected that after 2023, new energy commercial vehicles will enter a market-driven stage supplemented by policy. And after 2025, it will be fully driven by market forces, he predicted.

Domestic new energy commercial vehicle posted a market penetration rate of 11.8 percent in September, topping the 11 percent mark for the first time, as 33,000 such vehicles were sold in a year-on-year surge of 95.9 percent, data from the China New Energy Commercial Vehicle Association showed.

In the January-September period, sales of new energy commercial vehicles reached 204,000 units, climbing 80.1 percent, with a market penetration rate of 8.2 percent.

The NEV market penetration rate was 4.2 percent last year and only 2.7 percent in 2020, per data from the same association.

Citing industry forecast data, Fan noted that by 2030, the penetration rate of new energy light trucks will reach more than 30 percent, and the penetration rate of new energy medium- and heavy-load trucks will also be above 25 percent.

Compared with the current market penetration, the future growth space of new energy commercial vehicles is still quite large, he added.

On the other hand, the rapid growth of the new energy commercial vehicle market has been achieved against the background of a significant contraction in the overall domestic commercial vehicle market.

According to data from the China Association of Automobile Manufacturers, in the first nine months this year, the cumulative sales of commercial vehicles reached 2.5 million units, down 34.2 percent annually.

Farizon Auto’s business has expanded simultaneously with the rapid growth of new energy commercial vehicles in China. Founded in 2016, the firm enjoyed a 169.7 percent annual increase in new energy commercial vehicle sales over the first nine months, with its new energy light trucks snaring a market share of 24.2 percent.

At the end of October, Farizon Auto completed the Pre-A round of financing worth more than USD300 million, and plans to carry out Series A funding soon.

Editors: Tang Shihua, Peter Thomas