China's New Energy Vehicles: Leading the Automotive Revolution
\ | /
★
In September 2022, BYD, China’s new energy vehicle (NEV) brand, exceeded 200,000 units in monthly sales for the first time, including 200,973 new energy passenger vehicles with cumulative sales surpassing 1,000,000 units, and a year-on-year surge of 187%. BYD became the world’s first electric vehicle company to sell more than one million units a year, overpowering its strong competitor Tesla.
BYD’s sales miracle is not just another Chinese Myth of a sudden rise, more like a journey of a thousand miles begins with a single step story. China’s new energy industry started from scratch and has been striving forward to reach its present height. Behind the sales miracle of BYD is not only China’s great strengths in science and industry, but also the enthusiasm of Chinese consumers to embrace a new low-carbon lifestyle.
Picture 1: BYD 4S store（Picture source: https://www.pcauto.com.cn）
Real capability of
China’s NEV
Mr Wang, a NEV owner, has experienced the powerful power of China’s NEVs during a trip to Tibet. Usually speaking, driving from Bomê to Mêdog County requires a car to climb a plateau of 4,000 metres above sea level. When Wang arrived at the most dangerous part of the road, which is a water-damaged section, with great gradient and complicated road conditions, the staff there warned him “If your car is a full-time four-wheel-drive, you can go ahead; but if not, just stop.”
The vehicle did not disappoint him. At the checkpoint, when all the passengers in other cars are off, leaving the driver drive through alone, and some ORVs of well-known brands needed to rush the slope several times before finally going up, Mr Wang’s domestic NEV just “charged through without anyone leaving the car”, said Wang.
China holds the initiative firmly in its own hands among major NEV countries. In July 2022, data released by SNE Research, a South Korean research institute, showed that the total installed capacity of global electric vehicle batteries was 157.4 GWh, with Chinese companies CATL and BYD ranking first and third respectively and taking up 46% of the global power battery market share.
Figure 1：Global ranking of installed electric vehicle battery capacity (June 2022)
China’s NEV industry is growing rapidly with market sales of around 480,000 units in August 2022, accounting for 25.5% of overall passenger vehicle sales. Having the power that can compete with traditional fossil-fuel powered vehicles is the source of confidence of China’s NEV industry.
A broad NEV market
prospect in China
The market tends to take a wait-and-see stance when it comes to the unknown. But China’s strong industrial capacity gives consumers tremendous confidence. A NEV owner from Xi’an, China, gives a clear answer, “The most direct impact of (driving) new energy vehicle is the change on our trip experience.”
The change in public perception of NEVs is an important factor in China’s booming NEV market. According to the New Energy Vehicle Consumer Insight Report published by Roland Berger in September 2022, the motivation of Chinese NEV consumers shifts from “curiosity” to “utility”.
In 2012, China’s domestic NEV sales were 12,800 units, and in 2021, it reached 3.521 million units accounting for more than 50% of the global market share and ranking first in the world for seven consecutive years.
By the end of June, 2022, the registered NEVs in China exceeded 10 million, including 2.209 million newly-registered units in the first half of the year, up by 1.106 million units and 100.26% compared to the same period last year. In the first half of the year, China’s NEV brands occupied half of the top 20 global new energy vehicle brands in terms of sales.
Figure 2: Top 20 plugin electric vehicles across world (Bold/green = fully electric)
According to Decarbonizing China’s Road Transport Sector: Strategies Toward Carbon Neutrality published by the World Resources Institute, China’s efforts in promoting NEVs are expected to help its road transport sector achieve carbon neutrality, and if the existing policies can continue to take effect, China’s greenhouse gas emissions in road transportation will be 50% lower in 2060 than in 2020.
China's NEVs have increased the market share by “driving” the new development concept of low carbon and clean energy into people’s hearts.
Policy support for the
Overall NEV Development
The rapid development of the industry cannot be separated from the scientific plan and decisions made by the government.
In 2009, the Chinese government issued the Plan for the Adjustment and Revitalization of the Automotive Industry, which for the first time, setting the goal of developing NEVs on a large scale. The plan is extremely forward-looking when the idea of driving NEVs were still relatively new to the Chinese public.
A “silent revolution” against carbon emissions is taking place in Shenzhen, China. More and more environmentally-friendly cars with chic designs appear on the streets.
In 2017, Shenzhen officially announced that it had put 16,359 fully electric buses in use, and took the lead in making all of the city’s franchised buses fully electric, except for a small number of non-electric vehicles for emergency purposes. As a result, the buses will reduce annual emission of 1.353 million tons of carbon dioxide and 431.6 tons of pollutants such as nitrogen oxides, non-methane hydrocarbons and particulates.
The Guardian was amazed at the low noise of the new buses, “Nowadays, at the bus station in Shenzhen’s Futian Central Business District, you have to look out for a quietly arriving bus.”
Apart from Shenzhen, most cities in China have put the fully electric buses in use. The use of new energy buses and new energy taxis is already quite common in cities like Beijing, Shanghai, Guangzhou and Chongqing.
Picture 2: Online car-hailing model “BYD D1” co-made by BYD and Didi Chuxing
（Picture source: http://www.cwtea.net）
By 2021, China had 709,400 urban public transport vehicles, increasing by 0.7% compared to previous year, and the proportion of nationwide urban public buses vehicles reached 59.1%, increasing by 5.4%.
Recently, the Chinese government released the Action Plan for Accelerating the Construction of Charging Infrastructure along Highways, which proposes that by the end of 2022, all highway service areas in the country, except for those in alpine and high-altitude areas, will provide basic charging services, so that long distance electric vehicles travel is no longer a dream.
Picture 3: China’s EV charging station
（ Picture source: Visual China Group）
New energy vehicles are the most direct reflection of China’s new energy industry layout. The interaction among technology, the market, and the government as well as the tremendous confidence of consumers have turned China from a follower to a leader in the automotive industry. In the future, China’s NEVs will continue to improve their quality and efficiency on the fast track to globalisation, leading the global automotive revolution.
Author: Melissa Guo; Kenny Li; Leo Sun
Editor: Ukki Xu; Sherry Lin; Nora Wang