China’s new-energy vehicle market hot

China sold 21.48 million cars in 2021, placing it first on the list of car sales by country, a rank it has held for more than 10 years.

The US and Japan followed with 14.95 million and 4.45 million in total car sales in 2021, respectively. China’s EV market for passenger cars reached 3.334 million in 2021. It is followed by India, Germany and other countries.

Experts said China is expected to sell 4.5 million to 5 million EVs in 2022, which could see it overtake Japan for the third ranking.

Wang Yunshi, director of the China Center for Energy and Transportation at the University of California-Davis, said the growth in the sale of China’s NEVs, which includes battery-electric cars, plug-in hybrids and fuel-cell electric vehicles, isn’t just driven by government policies but also by the rise in popularity of energy-efficient cars in China.

He noted that the penetration rate, or per centage of Chinese car users who have purchased an EV was 6.2 per cent in 2020. By 2021, that rate has climbed to 15.5 per cent.

“In 2022, it is expected to reach 20 per cent, three years ahead of the government target for the market share by 2025,” Wang told a webinar on “China’s electric vehicle growth boon” organized by the California-China Climate Institute.

Although China’s annual vehicle sales, which are slightly shrinking and grew at 3.8 per cent from 2020 to 2021, NEV sales jumped 157.3 per cent, Wang said.

Sales in smaller markets also have surged substantially, whereas megacities, which traditionally have accounted for a large portion of the market share, have experienced declines, Wang pointed out.

“This is also a very encouraging sign. That means it’s not just the government policies, but the market is driving the shares forward, and we believe the second- and third-tier cities will increase even more,” he said.