Policy Shift: The Next Decade Could bethe One for Electric Cars
China aims for 20% of new vehicles sold to be electric by 2025.
In the profound “New Energy Vehicle (NEV) Industrial Development Plan (2021-2035)”, the State Council outlines the country’s expectations for this booming industry, including that China aims for new energy vehicles to account for 20% of the new vehicles sold in 2025, and battery electric vehicles to become the majority of new vehicles sold by 2035.
Policies taking effects from multiple angles are in place. Purchasers of electric vehicles can receive a bonus deducted from the price and obtain license plates in metropolises like Shanghai or Beijing with lower costs and a short waiting time. And vehicle manufacturers in China will be fined for inadequate production and sales of new energy vehicles as per the dual scoring system.
Tax Exemption Subsidies
Unlimited Road Accessibility
Source: CEIC Data. (2020). China Automobile: Sales
The globe political force is targeting 2030 as the turning point of vehicle electrification, implying a landmark decade to come.
European countries like Netherlands, Denmark, or the United Kingdom are to ban ICE vehicle sales by 2030. Canada, China, and South Korea are working towards around 30% penetration by 2030. Norway is the most ambitious for announcing to phase out ICE vehicles by 2025.
EV Market Share
Governments’ EV Penetration Goals (% of New Vehicle Sales）
Source: International Energy Agency. (2020). Global EV Outlook 2020; International Energy Association. (2019). Electric car market share in selected countries, 2019
Cars from NIO, Xpeng and Tesla still appear expensive relative to their best-selling fossil fuel peers, despite net losses on their financial statements.
Since subsidies will be discharged by 2022 year-end, the start-ups are expected to further research means to bring down the costs, enabling them to compete with established automakers.
Source: CEIC Data. (2020). China Automobile: Sales, and price information derived from official sites of carmakers