Norway is leading the EV revolution, but China is quickly gaining ground. According to Bloomberg hyperdrive (email) A total of 722,000 plug-in passenger cars and commercial vehicles were sold in China in October. Battery electric vehicles accounted for 22% of the passenger car market and plug-in hybrids accounted for another 9%. BYD is at the top of the leaderboard when it comes to sales.
China’s share of global passenger electric vehicle sales has increased from 26% in 2015 to 48% in 2021 to 56% in the first half of 2022. Total electric vehicle market share in China to 60%. When it comes to trucks, buses and two-wheelers, China is even further ahead.
Here are five takeaways from EV sales in China this month:
1) The average range of electric cars is steadily increasing. There are now nearly 250 different battery-electric models for sale in the passenger car market in China, and the average range of the models sold so far this year was 420 kilometers (261 miles) as measured by the NEDC standard. Microcars like the Wuling Air have an average range of less than 250 kilometers, while large sedans and SUVs often offer ranges of 500 miles or more. Average reach across all segments has increased by 42% since 2018.
2) Lithium Ion Phosphate (LFP) batteries are gaining more and more market share. Because they don’t use cobalt or nickel, they generally cost less than other types of EV batteries. The number of new EV models in China with LFP batteries is increasing rapidly and now accounts for half of all models coming onto the market. This leads to significant downward revisions to the forecasted demand for cobalt and shows how the EV market is able to adapt to different price dynamics and external pressures, Bloomberg says.
3) Electric vehicle efficiency in China is slowly but steadily improving. Despite increasing average ranges and associated battery pack sizes, the average efficiency of electric vehicles has improved by around 2% per year since 2018. That’s largely due to more efficient engines and power electronics, better thermal management systems, and efforts to reduce the weight of other parts of the car. The largest vehicles have seen the greatest improvements, although their average battery pack sizes have increased over this period. As more cell-to-pack and cell-to-chassis battery designs and other advances occur in the near future, efficiency gains should continue.
4) Plug-in Hybrids (PHEVs) are on the rise in the larger vehicle segments. While plug-in hybrid sales have slowed in Europe and never really picked up speed in North America, they are finding real traction in China in the larger vehicle segments. PHEVs accounted for 15% of sales in the large car segment and nearly 25% in the large SUV segment from January through August. This is partly because high battery prices make it difficult to fully electrify larger, heavier vehicles while remaining competitive.
Chinese automakers are also offering their PHEVs a much higher electric range than most global brands, many of which see PHEVs primarily as a compliance tool to meet emissions targets rather than gearing them to consumer needs. Plug-in hybrids are also becoming a popular choice in regions where public charging infrastructure is not as well developed. Selling patterns in China show that the technology is certainly not dead and likely will still play a role. The biggest challenge is making sure they’re actually plugged in and charging.
5) Electric vehicle sales are spreading beyond major cities. Places like Shanghai and Beijing have had high EV adoption rates for several years, in part due to city-level policies limiting the number of new license plates issued. EVs were exempt from some of these restrictions, making them a popular choice in China’s megacities. These cities also have clusters of local automakers and suppliers, good charging infrastructure, and other incentives that help drive EV adoption. But in the last two years, EV sales have rapidly spread to smaller cities, underscoring the fact that electrification is not just a big city phenomenon.
The electric car snack bar in China
The real question is when will Chinese electric car manufacturers start exporting their products to global markets? Right now, there seems to be enough demand in China to keep all of these factories running, but eventually these companies will want to expand sales to other countries.
Much will depend on the policies China puts in place regarding the business practices it wants its major manufacturers to adhere to. Just this week, a Chinese national was arrested in Canada and charged with industrial espionage. Things like that make people nervous about doing business with Chinese interests. If anything is stopping the Chinese from dominating the electric car world, it’s politics, not vehicle quality.
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