China leads the world in electric-vehicle sales and production, not because Chinese people are keener to buy New Energy Vehicles than consumers elsewhere, but because the Chinese government has decided the country should be the EV leader.
Local automakers have jumped on the NEV bandwagon enthusiastically, and non-automotive companies – many of them tech firms – have rushed to enter the fray. A plethora of local EV-only manufacturers also has sprung up.
Meanwhile, multinational automakers with stakes in China are scrambling to determine the best strategy to meet the government’s demand to produce significant numbers of vehicles for which there may be little customer appetite.
Suppliers know there is demand for their products and technology – the EVs must be produced, after all. But they often must figure out which EV start-ups actually will survive so as not to waste valuable time and resources developing products for an EV maker that eventually will go under. Overcapacity also is an issue in areas such as battery production.
A new Wards Intelligence report, “China’s New Energy Future,” takes an in-depth look at the issues and opportunities facing established automakers, start-ups and suppliers as the market for electrified vehicles takes hold. It also casts light on key strategies automakers are using to develop demand for NEVs and dissects China’s evolving policies directed at the sector.
Included in the report are verbatim Q&As with key executives from a cross-section of the industry, results of an exclusive Wards Intelligence survey and a detailed forecast for NEV sales in China to 2028.
Among the report’s highlights:
- Chinese NEV start-ups are relying on a digital-lifestyle strategy to sell battery-electric vehicles to consumers, focusing their marketing around connectivity, communication and community to appeal to buyers.
- NEV sales in China should top 7 million units annually by 2028, a near 600% increase from 2018 levels. Full battery-electric vehicles will account for close to 80% of the total.
- Of the 25 automakers evaluated in this report, Wards Intelligence finds nine best positioned to exploit the emerging NEV market in China. Four of those are domestic manufacturers and five are multinational companies.
- There is some skepticism within the industry as to whether China will achieve its NEV goals. In a Wards Intelligence survey conducted for this report, more than half of the respondents expect NEVs to account for 15% or less in 2025, not the 20% the country is targeting.
- Although big plans for charging infrastructure have been announced, actual buildout has not kept pace with BEV sales. In the Wards Intelligence survey, 55% cite lack of charging infrastructure as the biggest impediment to NEV sales, second only to vehicle cost (56%).
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