Why Your First Electric Car Might Be Chinese
Your next Electric Vehicle (EV) is likely to be Chinese if not Asian for various reasons. In recent years, the EVs industry across the Asia-Pacific region has really developed.
This is decorated by the region accounting for the largest share of battery electric vehicle (BEV) sales worldwide. Additionally, statistics have been showing higher growth than its western competitors with its EV sales. Sales of BEVs in the region have increased significantly in the past decade. Moreover, it was projected that China had the highest number of EVs in use and was forecasted to continue to produce the biggest volume of electric vehicles in the Asia-Pacific region in 2023. Together with Japan and South Korea, the three East Asian countries are industry leaders in the field of electro-mobility across the world.
It is worth noting that China is clearly taking the lead in the global Electric Vehicles development by motivating the public and private sectors, making its consumers show a faster pace to adopt electric vehicles compared to other countries globally. China got it right with phones and that is why the majority of citizens from this part of the world are using Chinese phones and for sure without an iota of doubt, they have once gotten it right with EVs. Various surveys done by various researchers clearly show that Chinese automakers are making inroads after spending years preparing to meet the growing demand for electric vehicles and the batteries that power them. Automakers globally are partnering with Chinese battery makers to power their EV fleets. Various Electric Vehicle dealers such as East Africa’s Go Electric Limited through its brand dubbed Utu have partnered with various Chinese automakers as they are of higher quality and affordable. Just like most citizens currently in our region are preferring Chinese phones to other phones available in the market because of their affordability and user-friendliness. Against the same backdrop, the world is preferring Chinese EVs because the electric auto manufacturers from this Asian Tiger economy are able to develop cost-effective advantages and localization strategies that have made them penetrate the market with ease.
Approximately a quarter of all cars newly manufactured in China are now EVs or plug-in hybrid vehicles, meaning that the country is ahead of its peers in Europe and well ahead of the US in the adoption of these technologies. Half the world’s EVs are sold in China. And this is largely driven by government mandates and incentives. For more than a decade, the Chinese government has subsidized EVs buying. The value of these subsidies has fallen over time, and they are due to end by 2023, but there are still plenty of reasons why buying an electric car is a financial no-brainer. Countries such as Japan didn’t give EVs much-needed attention and they will have to play a second fiddle as China leads the way hence your next EV is likely to be Chinese.
Europe’s automakers are already losing market share to China due to a lack of competitive electric vehicles, and they risk doing so at home too, where Chinese carmakers already account for 5% of the EV market. Chinese- manufactured automobiles are of far higher eminence than those other countries tried to impose on European consumers over a decade and a half ago. China’s auto exports rose over 50% in the first nine months of last year, shipping out over 2 million vehicles. This isn’t just western automakers using China as an export hub; homegrown brands are also finding their footing on the world stage. And demand is being led by Europe, the birthplace of the automobile, where a supply-chain crunch, energy crisis and war in Ukraine continue to hamstring manufacturers.
In the last few decades, China has made huge progress in science and technology. This is due to key drivers behind this upward trend include; a high level of spending on research, and development and the high number of patent applications made by Chinese companies and institutions. From the Chinese economic development, national security, and environmental protection, it is certain that China’s electric vehicle market will be a core sector of the automotive industry.
The country’s central government has invested heavily over the past decade to spur growth in the new energy vehicle (NEV) industry, leveraging a mix of policy, tax incentives and consumer subsidies. As of 2020, EVs must account for 12 percent of production for any company that manufactures or imports more than 30,000 vehicles in China (up from a 10 percent requirement the previous year). The government has also deeply subsidized consumers’ EV purchases with more than $14.8 billion since 2009, providing up to $3,600 for battery electric vehicles (BEVs) with more than 400 km range, though those rebates were first halved, then eliminated by 2021.
Despite the fact that western automakers overcame the competitive challenge from Japanese and Korean manufacturers in the past, the challenge is bigger this time because EVs are a new technology and China is years ahead in batteries and associated supply chains. The European Union reached a deal to ban sales of combustion-engine cars from 2035; so the continent’s manufacturers are stuck between a rock and a hard place.
China will continue to lead the EV space because it is the world’s major manufacturer of batteries since they are one of the core components of electric automobiles that makes them self-sufficient, as the world’s largest vehicle market, and plays a special role globally. This is an indication that China is ready to remain ahead of its peers as far as expanding its EV production, and thus accelerate the time to reach electric vehicle cost parity.
From the aspects of Chinese economic development, national security, and environmental protection, it is certain that China’s electric vehicle market will be a core sector of the automotive industry and this is why when you are buying your next Electric vehicle you will consider a Chinese model.
The writer, Ms. Eve Maina, is the Managing Director of Go Electric Ltd an Electric Vehicle (EV) dealer that provides e-mobility solutions to the African market.
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