Chinese market could ensure EV superiority

Proposed quotas expected to double annual sales of electrified vehicles

Published: May 7, 2017, 5:30 PM
Updated: November 21, 2021, 3:10 PM

Combined Charging System plug

A lot has been written about how unrealistic governments are, in trying to force feed electric vehicles to the masses. But one word is bound to almost guarantee that electrified vehicles will not only survive but likely prosper in coming years — China.

Not only is the country setting up a network that will corner the market on electric battery production, it is also taking steps to ensure that electric vehicle sales grow exponentially in coming years, reports the Arab News.

The Chinese government is proposing that 8% of manufacturers’ production must be electrified vehicles (fully electric or plug-in hybrids), which would put an estimated 1 million such vehicles annually on the country’s roads.

Meant to curb increasing levels of air pollution, mostly in metropolitan centres, it is expected to double the number of electric and plug-in hybrid deliveries each year, especially now that all major manufacturers have to jump on the production bandwagon.

The Arab News reports that last year’s deliveries were just over 500,000 units (mostly from local companies), which was double what it was the year before. This year’s tally is expected to come in around 800,000.

As with automakers in other parts of the world, some big manufacturers are lobbying against the implementation of the order, but the media outlet is reporting that the executive order is expected to get legislative approval next year. That could be bad news for the American and German companies currently building cars in China, and which are trying to delay the implementation. Chinese makers currently supply nearly all the EV sales volume, and are introducing new models priced to sell, whereas the foreign makers are showing off fancy concepts (at the recent Shanghai Auto Show) that could come to market in 2020.

Volkswagen alone is planning to sell 400,000 electrified vehicles annually in the country (made up of 15 new models), reports the Arab news, while Mercedes-Benz is budgeting $10.7 billion in development costs. Meanwhile, Ford has announced plans to electrify 10% of its Chinese model mix, and possibly as much as a quarter of it, by 2020.

But it will still be a tough go for foreign makers, though, with the subsidies tendered to domestic makers. Reuters has reported that government subsidies makes Chinese electric vehicles affordable, pointing to an example of a Chery eQ sedan that sells for the equivalent of $8,600 US (about 40% off its true cost of $14,500).

However, subsidies are expected to be scaled back, says the Arab News, which would mean the elite EVs from foreign makers might find willing consumers despite their higher prices.