Electric vehicles are becoming popular in China, but how long will this trend continue?
If you want to know how the government of any country can play a role in promoting new technologies, look no further than the new taxis in Beijing, China.
Five years ago, the city proposed that petrol or diesel-powered taxis would no longer be allowed on the streets, and today the situation is that thousands of vehicles run on batteries on the streets of Beijing and these electric vehicles Drivers don’t even have to worry about wasting time at charging stations.
In Beijing and many other Chinese cities, electric taxis go to a battery-swapping station, where a machine removes their battery and replaces it with a charged one within minutes.
“They (drivers) come to the streets to earn some money by driving, so they don’t want to have to wait two hours at a station to charge their batteries,” says E Yun Lisa Hsia of National Taiwan University. ‘
This is just one facet of China’s booming electric vehicle market. Not only taxis but also common citizens are buying electric vehicles in large numbers.
In July this year, the China Passenger Car Association expected the country to sell 6 million new electric vehicles in 2022, up from its previous forecast of 5.5 million.
September has been the best month for Tesla in China. According to the latest data, it has sold 83 thousand 135 vehicles in this month.
About a quarter of all new vehicle registrations in China are now either electric or hybrid. It simply means that China is ahead of America and Europe in acquiring this technology. Half of the world’s electric vehicles are sold in China.
According to Eun Lisa Hsia, the main reason for this is government patronage, incentives and benefits. For more than a decade, the Chinese government has subsidized the sale of electric vehicles. These subsidies have been decreasing over time and are set to end by 2023, but there are still a number of reasons why buying an electric vehicle is just a pocket benefit.
Buyers of new fossil fuel (petrol and diesel) vehicles in China have to pay not only for the vehicle but also for the number plate. A new number plate in Shanghai costs about 100,000 yuan (US$14,000).
If you choose an electric vehicle, there are other benefits that may vary from city to city. In the city of Liuzhou, the authorities have allowed electric vehicle owners to drive in bus lanes and get free parking.
After that, some cars are also priced very attractively. The Wuling Hongguang Mini EV is a vehicle that is challenging the trend of expensive electric vehicles.
The very basic version of the small car costs just $4,600 and is attractive to both city dwellers and first-time buyers, says Jon Hackaway, president and director of research firm Storm Crow Capital.
“These are vehicles that can be sold across a large part of Asia,” he says.
The Hongguang Mini is currently the most popular electric car in China, but there are several other high-priced electric cars, such as the Tesla Model Y ($54,000) or the Shipeng P7 ($33,100). Both are among the top 10 best-selling electric vehicles in China.
The competition in the electric vehicle market in China is very fierce and many companies are trying to make a place in it. According to a recent Reuters report, Junyao Airlines is also planning to build electric vehicles.
“It’s a very favorable environment for these manufacturers to develop their technology,” said Pedro Pacheco, an analyst with consulting firm Gartner.
He says the range of some electric vehicles in China is huge, and carmakers are now adding infotainment systems and other accessories to expensive electric vehicles to attract customers.
But there are two big questions about the electric vehicle trend in China: will it continue, and how will it change the global electric vehicle market?
Anna Nichols, director of industry analysis at the Economist Intelligence Unit, says she’s been surprised by how fast electric vehicle sales have been in China in recent years, but says the end of subsidies on new electric vehicle purchases has helped boost sales. Their demand may decrease.
“It’s a bit difficult for the electric vehicle market to continue growing at this rate in the future,” she says.
Charging facilities are still not everywhere and supply issues remain. In some parts of China, many charging stations were shut down when electricity production fell due to the worst drought.
More electric vehicle sales generally mean an increase in demand for electricity, and at a time when China is trying to reduce coal consumption in its coal-fired power plants, powering all those vehicles will be a challenge. can
Some analysts, like Hackaway, argue that hybrid vehicles are better than fully electric vehicles because they will be less dependent on electricity.
In addition, they will require less lithium due to smaller batteries. Fears are being expressed that in the next few years there will be a shortage of lithium in the world.
And as for the question of what trends China’s electric vehicle market might change globally, it is too early to say anything in this regard, but this change has already begun and many Chinese companies are now selling their electric vehicles in Latin America. Presenting for sale in America, Africa and other countries.
New has also recently opened its battery swapping stations in Norway and has opened its second such station in the country.
Pedro Pacheco says more major car brands will have to adopt battery-swapping technology for their vehicles to thrive in Europe, but he also points to the success of ultra-low-cost electric vehicles in China.
They already have low-cost electric vehicles in China. In Europe, we are not there yet.’
These are exactly the kind of vehicles that can make their place in emerging markets.
Is it time to conquer the world? Perhaps yes, but another circle says the world can wait.
