E-cars account for over 20pct of China’s new vehicle sales, reaching goal ahead of sched

Daniel Ren, South China Morning Post

Posted at Jan 12 2022 11:22 AM

Man cycles past entrance to the headquarters of Chinese electric vehicle maker BYD in Shenzhen's Pingshan district, Guangdong province, China October 25, 2019. Yilei Sun, Reuters/File Photo
Man cycles past entrance to the headquarters of Chinese electric vehicle maker BYD in Shenzhen's Pingshan district, Guangdong province, China October 25, 2019. Yilei Sun, Reuters/File Photo

Cars powered by electricity made up more than a fifth of China's passenger vehicle sales for a second consecutive month in December, buoyed by an increased awareness of the environment among drivers.

The electric vehicle (EV) adoption rate is the latest signal that the mainland's motorists are shifting from oil-guzzling vehicles that run on internal combustion engines to environmentally friendly cars, echoing Beijing's drive to achieve carbon neutrality by 2060.

The government had hoped new-energy vehicles (NEVs) - which comprise pure electric, plug-in hybrid and fuel-cell cars - would account for 20 per cent of the country's total vehicle sales by 2025, according to the Made in China 2025 industrial strategy published in 2015.

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"Beijing's efforts to encourage purchases of 'green cars' have paid off and the upwards momentum will pick up its pace in 2022," said Cao Hua, a partner at private equity firm Unity Asset Management. "A consensus forecast is that NEV sales could be double last year's number in 2022."

According to the China Passenger Car Association (CPCA), NEV deliveries jumped 138.9 per cent year on year to 505,000 units in December, which represented 22.6 per cent of total car sales.

In China nearly all NEVs are either pure electric or hybrid cars, both of which are powered by batteries.

In November, China's NEV penetration rate surpassed 20 per cent for the first time, with delivery of 378,000 cars, a 122.3 per cent jump over last year.

For the year, NEV delivery hit 2.99 million units, up 169.1 per cent from 2020. They represented 14.8 per cent of the country's total passenger vehicle sales, according to the CPCA.

The full-year sales data easily beat the industry consortium's forecast in the middle of 2021 that 2.4 million NEVs would be sold.

China's electric car market is now dominated by a raft of carmakers ranging from Tesla and BYD to SAIC-GM-Wuling, General Motors' three-way joint venture with SAIC Motor and Wuling Motors.

Mini EVs with a driving range of less than 200 kilometres and smart cars fitted with high-performance batteries that can go as far as 600km on a single charge are all well received by customers in the world's largest automotive and NEV market.

Tesla is the leader in the premium EV segment but its Chinese rivals such as Xpeng Motors and NIO are snapping at its heels by developing intelligent cars with autonomous driving technologies and advanced in-car entertainment systems.

Cui Dongshu, general secretary of the CPCA, said more EVs would replace conventional cars in the coming years.

"It was a great leap forward in terms of the EV adoption rate, which stood at only 5.8 per cent in 2020," he said. "The joint ventures by global conventional carmaking giants have yet to prove their strength in the EV sector, with only 3.7 per cent market share."

Total car sales on the mainland increased 4.4 per cent to 20.15 million units, data from the CPCA showed.

It was the first time the mainland's car market had reported year-on-year sales growth since 2017.

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