No Easy Road Ahead

By Li Xiaoyang

As environmental protection becomes an increasingly common concern， and new technologies such as 5G and the Internet of Things continue to improve， more and more Chinese drivers are embracing electric and intelligent vehicles.

In addition to U.S. electric carmaker Tesla， domestic startups such as Nio， Li Auto and Xpeng， as well as multinationals such as Volkswagen， have all expanded their market shares. According to the China Association of Automobile Manufacturers （CAAM）， new-energy vehicles （NEVs） accounted for 2.06 percent of total auto ownership in China in the first half of 2021， numbering 6.03 million units. Of the registered NEVs， 4.93 million units， or 81.68 percent， were fully electric vehicles （EVs）.

Getting electrified

Compared with gasoline-powered vehicles， EVs have the potential to be more energy-saving and environmentally friendly. As manufacturing technologies continue to improve， their global sales rose 41 percent year on year in 2020 and that growth is expected to strengthen， according to a report released by the International Energy Agency （IEA） in April.

Boosted by supportive policies and improving battery industrial chains in recent years， EV sales in China have continued to expand， despite a decline in government subsidies since 2019.

In response to the impact of COVID-19 on the market last year， the authorities extended purchase subsidies for NEVs from the end of 2020 to 2022. They also unveiled plans for NEVs to make up approximately 20 percent of new vehicle sales by 2025 and to completely electrify vehicles used in public transportation by 2035. This consistent support has driven the sector to see better-than-expected recovery from the pandemic.

Electric vans and buses have also seen growing demand. The Ministry of Ecology and Environment said in October last year that China had replaced 60 percent of its buses with electric vehicles. According to the IEA， the number of electric cars， vans， trucks and buses on the worlds roads could reach 145 million by 2030.

Supporting facilities for the EV sector are also developing rapidly. As of April， 65，000 charging stations， 644 power swap stations and 1.87 million charging piles had been built across China. They covered 176 cities and more than 50，000 km of highway， the CAAM said. Battery swap stations allow drivers to conveniently exchange drained batteries for fully charged ones.

Chinas lithium-ion battery output surged over 60 percent year on year in the first six months of this year， data from the Ministry of Industry and Information Technology showed. Contemporary Amperex Technology Co. Ltd. （CATL）， the countrys largest electric car battery maker， announced in February that it would invest up to 29 billion yuan （$4.5 billion） in capacity expansion.