The potential of China in the electric car market
Trends
Elon Musk's Tesla in the USA was the first to develop technological innovation in electric mobility, but it is in China that the market has grown and strengthened the most. The serious problem of pollution has been the driving force behind this change and today the number of electric cars in China has exceeded 5.1 million. The number alone is impressive, but it's the growth rates that are most noteworthy, indicating the dominance that China promises to have in the electric vehicle market. Since 2013, growth rates have exceeded 45 per cent every year.
The growth of the electric car market in China
In 2018, the number of electric cars sold in China represented around 50% of global sales - 2.1 million vehicles were sold worldwide in 2018, according to EV-Volumes' Global EV Sales for 2018 report. This data allowed the Asian country to maintain a fixed market share of 4,2%. Meanwhile, the North American and European markets had shares above 2%, lagging behind in the adoption of more sustainable and environmentally friendly mobility.
But it's not just in terms of electric vehicles that China stands out. China also leads the world in the production of lithium-ion batteries, the energy source responsible for powering these vehicles. In 2017, China was responsible for 60,1% of the world's production of these batteries and, according to Benchmark Mineral Intelligence, it is estimated that this leadership will remain unchallenged for the next 10 years. The report also estimates that Europe will see remarkable growth, rising from 5,3% in 2017 to 19,7% in 2028, even overtaking the USA.
Almost 500 Chinese manufacturers are looking for a place in the electric car market
Looking at the number of electric car manufacturers registered in China, it's easy to realise just how much the country is investing in this market. According to the Bloomberg news agency, there are around 486. Although the outlook is that not all brands will be able to survive, the truth is that many will remain and continue their journey to success.
Baic, JAC Motors and BYD are examples of successful brands in the Chinese market. With vehicles in the TOP 10 of the world's best sellers in 2018, the sales potential of these brands is still very high considering that they are only selling to the internal market. The slow process of opening up to the export market has several reasons:
the chinese market is large enough to accommodate current production;
chinese trams still don't meet the strict safety standards applied in the US and Europe.
The potential of China in the electric car market
https://www.tips4y.pt/en/blog/the-potential-of-china-electric-car-market /en/blog/the-potential-of-china-electric-car-market
China's weight in this growing market goes far beyond its own brands and becomes even more clear when major global manufacturers such as Tesla, Volkswagen or BMW decide to produce their electric cars in the country.
Volkswagen, for example, announced at the end of 2018 that it would be building a new factory in China exclusively for electric vehicles, from where 300,000 units a year will be produced from 2021 onwards.
How did China reach the leadership so quickly?
China has never been able to match the quality of established manufacturers in the production of vehicles powered by combustion engines. However, electric cars are easier to build and give Chinese companies the perfect opportunity to compete at a very high level. In addition, the support provided by the Chinese government is an important incentive in this market.
Beijing's policy has included electric vehicles as one of the priorities in the technology sector of the ‘Made in China 2025’ plan, with the aim of transforming the country into a technological leader. These efforts have involved policies that incentivate manufacturers with billions of euros to move forward with building these vehicles in China, but also to encourage companies and consumers to buy them.
Energy and environmental concerns are determining factors in the Chinese government's commitment to developing electric mobility, in an attempt to reduce air pollution and dependence on oil. Efforts have been very high, but they still have great potential to grow if we take into account that in 2018, 22.35 million vehicles were sold in China and only just over a million were electric vehicles.
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