China's new energy vehicle (NEV) production and sales rose for the eighth consecutive month in February, with the volume setting new monthly records.

The country produced 124,000 NEVs in February, up by 720pc from a year earlier but down by 36.1pc from January, because of lower output during the lunar new year holiday in 11-17 February, according to China's automotive manufacturers association (CAAM).

February sales stood at 110,000 vehicles, up by 580pc on the year but down by 38.5pc on the month.

The increases in production and sales were led by plug-in hybrids vehicles, which are mostly equipped with lithium iron phosphate (LFP) batteries, with production of such vehicles up by 740pc on the year and sales up by 590pc.

LFP batteries are safer and more cost-effective to manufacture than nickel-cobalt-aluminium/nickel-cobalt-manganese (NCA/NCM) batteries, which are typically installed in pure electric vehicles.

Production in January-February totalled 317,000 vehicles, up by 390pc on the year, with sales up by 320pc to 289,000.

Keener competition among domestic NEV manufacturers has also boosted production and sales. Major Chinese carmakers have raised their sales guidances for 2021-25 in view of higher buying interest after the Covid-19 pandemic eased and on rising demand for NEVs.

Major Chinese NEV producer BYD reported higher production and sales of NEVs in February compared with a year earlier, driven by a recovery in the NEV market.

Domestic auto manufacturer Geely and internet integrated services firm Baidu earlier this month set up the joint venture Jidu to develop the NEV market.