Forbes.com: China is the world’s most populous country and also the largest automotive market, outselling the U.S. by more than 6 million units in 2013. But the country still has a low vehicle ownership rate of around 79 vehicles per 1,000 inhabitants, dwarfed by the massive 791 vehicles per 1,000 inhabitants for the U.S. As China is the fastest growing major economy, increasing disposable incomes and development in the low-tier cities could continue to bolster expansion of the country’s automotive industry. However, higher vehicle sales have also led to congested roads and alarming pollution levels in some of the highly populated parts of the country. China has consequently looked to impose limitations on the number plate sales volumes and also the permissible running age of a vehicle. The government is also encouraging sales of the relatively more environmentally-friendly Electric Vehicles and Hybrid Electric Vehicles (EV/HEV).
EV/HEV Sales Expected to Rise In China
Demand for EV/HEVs is rapidly rising around the world mainly due to a relatively less harmful impact on the environment and lower running costs, as compared to gasoline-powered engines. In addition, governments around the world provide various incentives to boost electric vehicle sales. More and more, EV/HEVs also have lower battery prices, adding to their appeal. Due to these reasons, the combined EV/HEV market is expected to more than triple from current levels to 6.6 million units by 2020, representing 7% of the global light-duty vehicle market by then. China provides subsidies of up to 60,000 Chinese Yuan (about $9,700) on electric as well as hybrid electric vehicles. The country had earlier in 2012 set the target of reaching 500,000 unit sales of Plug-in Electric Vehicles by 2015, and over 5 million PEV sales by 2020. This means that China aimed for PEVs to constitute around one-seventh of all vehicle sales in the country by the end of the decade. However, plug-in electric vehicle sales stood at only 17,600 in China last year, comprising 14,604 pure electrics and 3,038 plug-in hybrids. Although this market grew by an impressive 38% year over year, reaching the aggressive figure of 500,000 sales by next year seems improbable. This is mainly because consumers seem hesitant to purchase electrically powered vehicles as running costs could be high due to the absence of a well established battery-charging infrastructure at present. However, the government has increasingly taken steps to persuade consumers to go green, which could boost sales for EV/HEVs going forward.
China Aims To Improve Battery-Charging Infrastructure
China has been somewhat unsuccessful in its attempts to drastically increase electric vehicle volumes. In order to reduce dependence on oil imports and also improve pollution levels, the State Grid Corp. of China plans to bring in private capital to build charging facilities for EV/HEVs. China’s largest power grid operator in terms of sales also aims to make battery-charging more practical, with costs going as low as $0.08 (0.5 yuan) a kilowatt-hour. China plans to build around 400,000 charging stations by next year, but the difficulties in building these networks might prolong the completion of this program. Nonetheless, as the country looks to improve electric-vehicle-friendly infrastructure, sales for EV/HEVs could be strong moving ahead.
Ageing, Polluting Vehicles To Be Done Away With
China aims to remove around 6 million old and air-polluting vehicles from some of the most smog-clogged cities. Despite having strict emission standards, the government has found it difficult to impose restrictions on older vehicles, as it could hurt small businesses. However, this move reaffirms the country’s plans of encouraging environmentally-friendly initiatives. Seeing how China couldn’t meet its pollution reduction goals through 2011-2013, the country now plans to remove vehicles registered before 2005 that have failed to meet cleaner emission standards. This drive by the government to clean cities and improve pollution levels could also prompt consumers to buy PEVs, in order to evade possible future limitations on their gasoline-powered vehicles.
EV/HEV Sales Rise Drastically In China
Although the previously laid out estimates of 500,000 unit sales in China by 2015 might be far-fetched, PEV sales continue to rapidly grow in the country. In the first quarter, PEV sales grew by an impressive 120% to 6,853 units, as reported by the China Association of Automobile Manufacturers. Sales include 4,095 pure-electrics and 2,758 plug-in hybrids. The domestic manufacturers BYD and Chery lead the Chinese PEV market at present with 43% and 30% share respectively. BYD will look for further expansion into this market with the launch of Denza in September, an electric car made in partnership with Daimler. The American company Tesla also rolled out its Model S, which sold only two units in China in the first quarter. However, the automaker plans to sell at least 5,000 vehicles in China this year itself, gauging the high demand for electric vehicles in the country. This means that although the electrically-powered vehicle market might not grow as outlined previously, demand for such vehicles is on a steep rise nevertheless. Automakers might look to tap into the growth potential of the EV/HEV market in the country going forward.
EV/HEV Sales Expected to Rise In China
Demand for EV/HEVs is rapidly rising around the world mainly due to a relatively less harmful impact on the environment and lower running costs, as compared to gasoline-powered engines. In addition, governments around the world provide various incentives to boost electric vehicle sales. More and more, EV/HEVs also have lower battery prices, adding to their appeal. Due to these reasons, the combined EV/HEV market is expected to more than triple from current levels to 6.6 million units by 2020, representing 7% of the global light-duty vehicle market by then. China provides subsidies of up to 60,000 Chinese Yuan (about $9,700) on electric as well as hybrid electric vehicles. The country had earlier in 2012 set the target of reaching 500,000 unit sales of Plug-in Electric Vehicles by 2015, and over 5 million PEV sales by 2020. This means that China aimed for PEVs to constitute around one-seventh of all vehicle sales in the country by the end of the decade. However, plug-in electric vehicle sales stood at only 17,600 in China last year, comprising 14,604 pure electrics and 3,038 plug-in hybrids. Although this market grew by an impressive 38% year over year, reaching the aggressive figure of 500,000 sales by next year seems improbable. This is mainly because consumers seem hesitant to purchase electrically powered vehicles as running costs could be high due to the absence of a well established battery-charging infrastructure at present. However, the government has increasingly taken steps to persuade consumers to go green, which could boost sales for EV/HEVs going forward.
China Aims To Improve Battery-Charging Infrastructure
China has been somewhat unsuccessful in its attempts to drastically increase electric vehicle volumes. In order to reduce dependence on oil imports and also improve pollution levels, the State Grid Corp. of China plans to bring in private capital to build charging facilities for EV/HEVs. China’s largest power grid operator in terms of sales also aims to make battery-charging more practical, with costs going as low as $0.08 (0.5 yuan) a kilowatt-hour. China plans to build around 400,000 charging stations by next year, but the difficulties in building these networks might prolong the completion of this program. Nonetheless, as the country looks to improve electric-vehicle-friendly infrastructure, sales for EV/HEVs could be strong moving ahead.
Ageing, Polluting Vehicles To Be Done Away With
China aims to remove around 6 million old and air-polluting vehicles from some of the most smog-clogged cities. Despite having strict emission standards, the government has found it difficult to impose restrictions on older vehicles, as it could hurt small businesses. However, this move reaffirms the country’s plans of encouraging environmentally-friendly initiatives. Seeing how China couldn’t meet its pollution reduction goals through 2011-2013, the country now plans to remove vehicles registered before 2005 that have failed to meet cleaner emission standards. This drive by the government to clean cities and improve pollution levels could also prompt consumers to buy PEVs, in order to evade possible future limitations on their gasoline-powered vehicles.
EV/HEV Sales Rise Drastically In China
Although the previously laid out estimates of 500,000 unit sales in China by 2015 might be far-fetched, PEV sales continue to rapidly grow in the country. In the first quarter, PEV sales grew by an impressive 120% to 6,853 units, as reported by the China Association of Automobile Manufacturers. Sales include 4,095 pure-electrics and 2,758 plug-in hybrids. The domestic manufacturers BYD and Chery lead the Chinese PEV market at present with 43% and 30% share respectively. BYD will look for further expansion into this market with the launch of Denza in September, an electric car made in partnership with Daimler. The American company Tesla also rolled out its Model S, which sold only two units in China in the first quarter. However, the automaker plans to sell at least 5,000 vehicles in China this year itself, gauging the high demand for electric vehicles in the country. This means that although the electrically-powered vehicle market might not grow as outlined previously, demand for such vehicles is on a steep rise nevertheless. Automakers might look to tap into the growth potential of the EV/HEV market in the country going forward.
