Visitors inspect cars on the Xpeng stand at the 2022 Haikou International New Energy Vehicle&Connected Mobility Show, which was held in early January in Hainan province. (ZHANG JUNQI/FOR CHINA DAILY)
BEIJING – China's new-energy vehicle (NEV) market is in the spotlight of the global automobile industry, with its sales ranking first globally for a seventh straight year in 2021 and jumping 1.4 times year-on-year in the first quarter of 2022.
The country's NEV industry is gaining steam in the fast lane of expansion, powered by growing demand, mounting investment, improved supportive facilities and policies, as well as technological breakthroughs.
The size of China's NEV market is expected to top 5.22 million units this year, a surge of 47.2 percent over the previous year, according to a report released by global market research firm International Data Corporation
The size of China's NEV market is expected to top 5.22 million units this year, a surge of 47.2 percent over the previous year, according to a report released by global market research firm International Data Corporation (IDC).
China's NEV market is likely to expand at a compound annual growth rate of around 38 percent from 2021 to 2025, with the total market size reaching 12.99 million units in 2025, according to the report.
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More consumers have turned to NEVs as continuous international oil price hikes have pushed up the cost of fuel in the domestic market, the IDC says.
At the same time, Chinese consumers, especially the younger generations, are more focused on NEV's advantages in saving energy and costs and reducing pollution, instead of being solely motivated by subsidy incentives and preferential policies in purchasing and using these vehicles.
In terms of supply, the report hails China's improvements in building supportive infrastructure for NEVs, saying it consolidates consumer confidence in the NEV market.
In March 2021, China released a plan to speed up development of new consumption forms, urging efforts to shore up the construction of NEV charging piles and encouraging operators to lower charging prices.
The country has built 936,000 charging piles, 14,000 charging stations and 725 swapping stations for NEVs so far. It will speed up the construction of these facilities and deal with power-supply shortages on expressways and in old residential areas, according to the IDC.
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In January this year, China issued a guideline on further improving charging facilities for electric vehicles, vowing to set up a charging system capable of meeting the needs of more than 20 million such vehicles by the end of 2025.
The IDC also expects that the strong momentum of self-driving services will boost the NEV market in the future. Autopilot technology, which requires the accurate control of car systems, can be applied more easily in electric cars given their simpler structures compared with fuel-powered cars, it says.
To promote the high-quality development of the NEV industry, China released a 2021-2035 plan for the sector in November 2021, vowing to raise the proportion of NEVs in its sales of new vehicles to around 20 percent by 2025, while realizing the commercial use of highly self-driving cars in designated areas and scenarios.
This year's government work report also underscored the need to continue supporting the consumption of NEVs.
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China will continue to offer NEV purchase subsidies and grants for constructing charging facilities, according to the Ministry of Industry and Information Technology. It will also facilitate NEV sales in rural areas to increase consumption demand.
Over the next three to five years, medium and small-sized cities, together with a vast area of countryside, will become an important market for driving the growth of China's NEV sales, said Zhang Yongwei, vice president of electric vehicle industry think tank China EV100.
Eyeing huge opportunities in the NEV market, automobile manufacturers from home and abroad are racing to increase investment and produce more competitive products, which also adds vitality to the market, according to the IDC report.
The total amount of financing in NEV-related sectors exceeded 80 billion yuan ($12.52 billion) in 2021, and the number of newly-established NEV-related firms was 2.4 times that in 2020, according to a report released by database query platform Tianyancha.com.
In February this year, German automaker Audi and China's leading automaker First Automotive Works launched a project to produce pure electric vehicles in northeast China's Changchun.
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Bearing a total investment of more than 30 billion yuan, the joint project is expected to have an annual production capacity of 150,000 vehicles.
In a recent symposium attended by representatives of 17 foreign-invested auto and auto-parts manufacturers, attendees also expressed a willingness to increase investment in NEV manufacturing and technology research and development in China.
The NEV market is an important battlefield for auto manufacturers, said Wang Bo, a researcher with the IDC, noting that mainstream producers will increase their output and the maturity of the market will improve significantly in the future.