All about the Chinese Electric Vehicle Market

2 min read

Chinese Electric Vehicle Market

ELECTRIC VEHICLE DEVELOPMENT IN CHINA

The Chinese government is investing majorly in the development of electric vehicles. Businesses and governments all over the world are searching for technological innovations for reducing costs and increasing the usage of ‘eco-friendly’ vehicles. China became the biggest car producer in 2009, and it is heavily investing in the manufacturing of electric vehicles.

China is majorly pushing new energy vehicles (NEVs) (including battery electric vehicles, and plug-in hybrid electric vehicles) not only to reduce smog in overcrowded cities but also as a strategic industry move, which is expected to help in boosting its firms’ global presence. It is now moving toward making producers and market more competitive by phasing out subsidies. China manufactured 794,000 NEV units and sold 777,000 in 2017, both the world’s highest and up by more than 50% on the previous year. Total NEV ownership in China reached 1.8 million, more than half the global total. Manufacturer representatives have the perspective that EV industry will focus on improving performance and driver convenience, with battery life, recharging speeds, and the availability of recharging stations among the primary concerns. These executives have also asked the government to elevate technological thresholds and create incentives to improve battery range. Additionally, they demanded policies to encourage NEV sharing and to grant EVs special road access to make them more attractive for consumers.

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PROMOTIONAL STRATEGIES OF CHINA FOR PROMOTING EV INDUSTRY IN THE COUNTRY

The Chinese government is providing incentives to consumers and imposing quotas on manufacturers. The government is giving a 10% tax rebate to NEV purchasers. Provincial governments also offer subsidies, combining to knock off, for instance, USD 12,000 from the cost of a new BYD e5. Gradually, China is bringing in tougher vehicle emission rules and introducing quotas from 2019, which will need manufacturers to buy credits or face fines if they miss targets for manufacturing zero- and low-emission cars. Battery-powered cars are cleaning up most of the demand, as subsidies are shifting more toward BEVs than hybrids.

Several incentives are provided by both government and the industry to promote the EV market. For instance, the Chinese central government supports municipalities deploying public charging infrastructure by subsidizing the construction of charging stations. The State Grid Corporation of China and China Southern Power Grid have together opened more than 27,000 charging stations and more than 800 electric vehicle battery-swapping stations for buses. In China, EVs are also exempt from license-plate lotteries and high registration fees that apply to cars with combustion engines.

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CHINA INITIATIVES FOR NEVS FOR 2018

The Chinese NEV production crossed the 1 million unit line at the start of the fourth quarter of 2017 and ended 2017 with 1,230,000 NEV passenger cars in operation. This made China ahead of the United States (740k units) and Europe (950k units). With around 180 million cars in operation, the PEV share is a mere 0.70 % of the total stock, but it is higher than in other regions. In 2018, China expects NEV passenger cars to represent more than 1% of vehicles on the road.

Battery Electric Cars

Source: IEA, Mordor Intelligence Analysis

5 million EVs on the road by 2020 was a previously stated target of the Chinese government. This prediction entails all vehicle types combined, which includes LCVs, trucks, and buses. With the present rate of NEV adoption, this target is very likely to be achieved or even exceeded.

About the market

The Chinese electric vehicle market is expected to register a high CAGR during the forecast period, 2018-2023. Globally, EV sales have risen eight-fold in the United States and 66 times in China since 2011.

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Mordor Intelligence is a market intelligence and advisory firm operating in 14 industry segments and serving over 600 clients worldwide.

Sunil Kumar
Sunil Kumar Sunil is a Market Research professional with 1.5 years of experience in business research, market research, and client servicing in the automotive domain. He is extremely committed & an energetic individual, having always worked beyond the defined mark. He enjoys challenges & is driven by initiatives.
Sunil Kumar Sunil is a Market Research professional with 1.5 years of experience in business research, market research, and client servicing in the automotive domain. He is extremely committed & an energetic individual, having always worked beyond the defined mark. He enjoys challenges & is driven by initiatives.  

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