The sale of electric vehicles continues to boom in China, so much so that as much as a third of all the new cars sold across the country this year are expected to be electrified.
China has quickly established itself as the largest electric vehicle market in the world and is home to approximately 200 EV manufacturers of varying sizes. The market of new energy vehicles, consisting of hybrids and EVs, is particularly strong and as many as 9 million NEVs are expected to be sold in China this year with the total new car market swelling by 3% to 27.6 million units.
The falling costs of hybrids and EVs are contributing to the boom in sales. On the back of Tesla announcing a series of price cuts since the start of the year, various other car manufacturers have followed suit, meaning EVs are more accessible to Chinese buyers than ever before. It has also opened up a large market for mid-priced EVs, whereas previously most EVs sold in China were either expensive and luxurious or cheap.
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“This year will have new energy vehicles rising close to 10 million units, and their volume in 2035 will be at least 25 million units and they will account for 80% of all new vehicles sold,” professor of automotive engineering at Tsinghua University in Beijing, Ouyang Minggao told Nikkei Asia.
Senior research officer at Mizuho Bank in Tokyo, Tang Jin, says car sales in China can be split into three price categories. The first is for vehicles priced below approximately $7,450, the second is for vehicles costing between $14,900 and $22,350, and the third is for vehicles priced between $29,800 and $44,700. NEVs currently account for more than 15% of sales in each segment and demand in the $14,900 to $22,350 segment is expected to rapidly expand this year. Indeed, EVs accounted for 37% of sales in this segment through the first quarter of 2023.
A key advantage that China has over other countries is the fact that its EV battery makers own 70% of the global market, giving local carmakers a competitive edge over rivals.
