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Macroscope
OpinionComment
David Chao
David Chao

In China’s vast and growing electric vehicle market, local brands have the edge

  • Tesla is about the only foreign electric vehicle maker making top sales in China amid intense local competition and price cuts
  • But with their focus on the domestic market, Chinese electric carmakers are unlikely to become global names any time soon

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Nio’s chief executive William Li Bin unveils the all-electric ET7 sedan at the carmaker’s global launch ceremony in Chengdu on January 9. Nio is cementing its role as a challenger to Tesla in China’s premium electric vehicle segment. Photo: Daniel Ren
David Chao

The global electric vehicle market has recovered rapidly from the pandemic-related demand shock as sales grew by 43 per cent last year, reaching a record 3.24 million units.

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General Motors, the largest carmaker in the United States, has announced plans to sell only carbon-emission-free vehicles by 2035, while China and Japan are banning sales of fossil-fuel-only vehicles by the same year.

These targets are rippling through global car supply chains, even as new regulatory emission standards and improving consumer acceptance doubled electric vehicles’ share of the global car market to 4.2 per cent in just a year.

China is the core driver of the electric vehicle market, accounting for roughly half of global sales. Covid-19 decimated global car sales last year but in China, electric vehicle sales grew 12 per cent. This year, China’s electric vehicle sales could grow by over 40 per cent on the back of a stable economy and sale promotions, according to the Chinese Association of Automobile Manufacturers.

This is only the beginning of a very long electric vehicle adoption cycle. Recent gains by the industry can be sustained and even strengthened over the next few years. Historical constraints to electric vehicle take-up by consumers include access to vehicle charging, but significant investments in charging networks in China should ease the bottleneck soon.

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