“Despite being the world’s largest auto market, China has never been a big car exporter globally. It seeks to change that in a more-electrified future,” writes Jacky Wong at The Wall Street Journal. In 2021, China broke its record for new-energy car sales, tripling what it sold in 2020 and accounting for 25% of all car sales in November alone.
The push for growth in China’s electric vehicle (EV) industry is just one of President Xi’s many steps towards making China carbon-neutral by the year 2060. As China rolls out its 14th five-year plan, Wood Mackenzie’s Asia-Pacific vice chair for energy, Gavin Thompson, stated that “increased investment in wind, solar, electric vehicle and battery storage technology deployment will almost certainly feature [in the plan], and we can expect support for green hydrogen and carbon capture technology.”
The consulting firm KPMG surveyed over 1,000 auto industry experts who anticipate that electric vehicles will make up over half of all new car sales in the U.S. and China by 2030. With this level of anticipated growth, many new players are looking to join the market. There are currently more than 300,000 businesses related to “new energy vehicles”, and Chinese Minister Xiao Yaqing says “the number of new energy vehicle businesses is too great, and is in a small and scattered state.” The main players in the market, however, are General Motors, Liuzhou Wuling Motors, state-owned SAIC Motor, BYD, Li Auto, Nio and XPeng.
Driving head first into the electric vehicle market makes total sense for China, especially surrounding its “carbon neutral” pledge. There are obstacles to overcome, though, especially in the all-important tech-sector as we head into the new year and expected tighter tech regulations won’t make things any easier. Semiconductors are an all-important component when it comes to manufacturing electric vehicles, but China has long been at the mercy of foreign companies, which have previously dominated the market. Self-sufficiency will be key moving forward if China expects to compete on the global stage. For China, the chips are indeed down. However, the horizon is brighter thanks to its five-year plan.
While 2030 seems light-years away, it’s really right around the corner, and auto industry experts say that the anticipated growth in the next eight years is creating much coveted supply and demand. Therefore, it’s important for China to overcome its tech liabilities so it can deliver on an increasing green-friendly marketplace. But what can we look for over the next 12 months? Sales of EV's in China is expected to reach around 3-million vehicles, and that’s more than twice as many as 2020. And who’s buying those EV’s? About 75% will be purchased by individual consumers.
It is believed that China is on track to produce more than eight million electric vehicles by the year 2028, and the power behind this production is the recent boom in electric vehicle factories. Companies like Xpeng Motors, Nio, Volvo and even the struggling Evergrand have opened electric vehicle plants throughout China at a rate, “almost as fast as the rest of the world combined.”
2022 will also be the final year government subsidies are available for EV purchases. However experts say that won’t matter, with sales expected to grow to nearly 20 million by 2030, according to China EV 100, a nonprofit organization and third-party think tank aimed at boosting the development of the EV industry.
Having China with a majority of EV’s is one thing. Charging those vehicles is another. That’s clearly spelled out in the China Clean Transportation Partnership opinion pages, which states charging stations or “piles” need to be strategically placed within residential and commercial communities. How quickly a battery can charge is also an issue not to be overlooked. Are consumers in China willing to wait endlessly for their vehicle to charge?
No doubt, much of this will be discussed at the 2022 World Intelligent Connected Vehicles Conference (WICV), held this coming September in Beijing. What remains to be seen is how many attending will arrive in an electric vehicle.