NEV arms of established giants saw their sales slump as well, but they are speeding up their preparations in terms of models and dealerships for a bumper 2023.

GAC's Aion sold 10,206 units in January, down 36.3 percent year-on-year and 66 percent from the same month last year. It cited the Spring Festival holiday as well as the withdrawal of subsidies as the major causes.

But the carmaker said its sales goal this year is 500,000 units, which would be a surge from its 2022 sales of 271,000 units.

Geely's electric Zeekr brand saw an 11.73 percent year-on-year fall in January, delivering 3,116 vehicles. But its sales target for the year is to double its 2022 figure, which stood at 70,000 units.

Aito, backed by Huawei, sold 4,475 units last month, down 55.88 percent month-on-month. The brand began deliveries of its model, the Aito M5, in March 2022.

Despite the fall in January, Zhang Yongwei, vice-president of China EV 100, an automotive think tank, is sanguine about the sector.

He said car buyers in smaller cities are emerging as a new customer group, which is a sign of such vehicles' rising popularity.

In the first 11 months of 2022, 54 percent of China's NEVs were sold outside tier-one cities, and the figure is expected to rise further this year, said Zhang.

A growing number of available NEV models will help boost sales as well, he said. A survey by China EV 100 shows automakers will launch at least 100 NEV models this year in the country.

Cui Dongshu, secretary-general of the CPCA, expects the market to take a turn for the better starting from February. The CPCA estimates passenger NEV sales in China will reach 8.5 million units in 2023, up from 6.5 million units in 2022.

Cui was echoed by analysts at Cinda Securities, who said January would be the lowest point for the year and sales will go on the rise starting from February to April.

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