This would include 6.99 million BEVs and 3.37 million PHEVs, according to a team of local analysts.

China's July NEV sales at 593,000 units, largely flat from June, CAAM data show-CnEVPost

China's new energy vehicle (NEV) sales are expected to reach 6.62 million units in 2022 and 10.36 million units in 2023, Essence Securities analyst Xu Huixiong's team said in a research note released today.

The team expects China's battery electric vehicle (BEV) sales to be 6.99 million units in 2023, up 37 percent year on year, and plug-in hybrid vehicle (PHEV) sales to be 3.37 million units, up 120 percent year on year.

In terms of BEV sales, the team sees tight supply in 2022 for models in the price range of RMB 100,000 ($14,340) - 200,000, with sales of Qin Plus EV, BYD Yuan Plus, BYD Dolphin, and GAC Aion S continuing to climb.

The team expects sales of BEV models priced at that range to reach 2.31 million units in 2023, up 39 percent year on year.

In the market priced above RMB 200,000, the supply of premium models will be abundant, including BYD Seal, BYD Sea Lion, Denza D9, ET5, Nio ES7, G9, and 009.

In 2023, sales of BEV models priced above RMB 200,000 are expected to reach 3.05 million units, up 70 percent year-on-year, according to the team.

In terms of PHEV model sales, the team believes that local car companies, including Great Wall Motor, Geely, and GAC, have also accelerated their presence in hybrid technology after BYD launched its DM-i super hybrid system.

These car companies' hybrid models have 40-50 percent lower fuel consumption compared to competing models of the same class of internal combustion engine vehicles, and they are expected to gain more recognition, according to the team.

In terms of PHEV demand, BYD's DM-i technology-equipped models have seen rapid growth in sales, accumulating large-scale users and a significant increase in consumer recognition of local hybrid technology, the team said.

So far this year, China's NEV industry continues to grow at a faster pace than many expected.

In late February, the China Association of Automobile Manufacturers (CAAM) said China will reach 5 million NEVs this year. From January to July, NEV sales in China had reached 3.19 million units, according to the CAAM's latest data.

In early August, the China Passenger Car Association (CPCA) raised its forecast for new energy passenger car sales in China by 500,000 units to 6 million units in 2022.

So far this year, China's overall new energy passenger car performance has exceeded the CPCA's forecast of 5.5 million units at the end of last year, a previous report said.

China aims to reach 25 percent penetration of NEVs by 2025, but it now appears that goal could be reached this year, three years ahead of schedule, Miao Wei, former minister of industry and information technology and a member of the CPPCC National Committee, said on September 6.

China's 25% NEV penetration target could be reached three years earlier than planned