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Nearly one out of every four cars sold in China was an electric vehicle (EV) in 2022, with total sales of 6.9 million representing an impressive performance for the market. This rapid growth is mainly driven by government subsidies which have incentivised consumers and corporate drivers to make the switch to EVs. According to Counterpoint Research, China’s EV sales are expected to exceed 8 million units in 2023, marking an end to the rapid growth.
China’s EV market dominated by local brands, with BYD leading the pace
With GM Group, Tesla, Geely Holding and GAC Group attempting to catch up, BYD commands a significant market lead of almost 30 per cent. The percentage of battery electric vehicles (BEVs) in China’s overall EV sales, however, fell in 2022, while the percentage of plug-in hybrid electric vehicles (PHEVs) rose to 24 per cent. This pattern is expected to persist. By 2026, the cost of owning an electric car will be equal to that of a conventional car, making plug-in hybrid electric cars a more affordable option for many consumers.
With over 94 brands offering more than 300 models in price ranges from $5,000 to over $90,000, China has the most vibrant EV market in the world. With BYD, Wuling and GAC among the top manufacturers, domestic brands control 81 per cent of the global EV market. Additionally, China is home to a large number of EV start-ups that are succeeding and posing a serious threat to established international brands.
In 2022, the top 10 EV models represented nearly 45 per cent of all EV sales, with BYD accounting for six of the top 10 models on the Chinese market. The Wuling Hongguang MINI EV‘s eight-quarter dominance in the market came to an end in Q4 2022 when the BYD Song overtook it as the best-selling EV model.
Price war looming in China’s EV market as subsidies phase-out
As brands compete for market share, the phase-out of subsidies and the wealth of EV players could easily result in a price war. BYD increased the price of its electric vehicles by $250 to $900 in January 2023 as a result of rising raw material costs and the elimination of EV purchase subsidies.
Later, in February, BYD announced price reductions, following Tesla. The prices of new BYD models were cut by $860 to $1,150, and the prices of the Han and Qin models for 2021 were reduced by an average of $2,500. This demonstrates the continued power of established international brands.
Due to production halts brought on by the resurgence of COVID-19, Tesla saw a nearly five per cent YoY decline in market share in 2022, whereas BYD saw an increase of more than 11 per cent year-on-year (YoY). The EV market in China is anticipated to maintain its upward trend, with increased competition from both seasoned players and EV startups.
China’s EV subsidies withdrawal will slow sales growth
The growth in EV sales in China, however, is disputed by a report by ING that is accessible in our report database. According to the report, government subsidies were the primary factor in China’s 2022 EV market growth, and without them, EV sales are predicted to decline. The report also shows that prices of EVs have been trending down for years, but battery prices increased for the first time in 2022, leading to price uncertainty.
The report projects that EV sales will increase going forward, albeit more slowly than in previous years. Additionally, it forecasts that by 2026 the cost of owning an EV will be comparable to that of a conventional vehicle. With this market penetration, China still leads the global electrification trend, followed by Europe.
Government Initiatives Drive Charging Infrastructure Growth
Along with the expansion of the market for electric vehicles, China has also made significant strides in the establishment of a charging infrastructure. China had more than 1.5 million public charging stations as of 2022, far more than any other nation.
Government programs that have made significant investments in building charging stations and implemented policies to encourage private investment in charging infrastructure have been the driving forces behind the development of this infrastructure.
China remains the leader
The switch to electric vehicles in China began more than ten years ago but it has picked up speed in recent years as a result of subsidies provided by the government to individuals and businesses. After hitting a five-year low in 2020, the switch from traditional cars to EVs signalled a turning point in the auto industry.
The green transition is continuing even though it is anticipated that the growth of the electric vehicle market in China will slow this year. By 2030, it’s anticipated that more new zero-emission vehicles will be sold than vehicles with internal combustion engines. As the market for electric vehicles expands steadily, China is anticipated to continue to dominate the global electric vehicle market.
This article is provided by the editorial team of EVMarketsReports.com. The ‘FREE OF CHARGE’ platform holds the world’s largest collection of EV Reports and outlooks and presents an overview of almost 600.000 Public Charge Points across Europe. Access more than 500+ valuable EV reports covering among others the Chinese, American and European emobility markets.
