China’s new energy vehicle (NEV) sector has achieved a milestone, as for the first time more NEVs were sold in a month than fossil fuel-powered cars, in an accelerated drive toward a greener and more intelligent future. Retail sales of NEVs nationwide reached 878,000 units in July, accounting for 51.1% of the total market, according to the China Automobile Dealers Association (CADA). It is a historic moment not only for the transformation of the country’s automotive industry but also for the global shift toward green transportation, analysts said. “This is the beginning of a ‘qualitative change’ in the NEV market,” said Zheng Yun, Senior Partner and Asia head of automotive practice at Roland Berger.
The NEVs’ market share in China was just above 1% in 2015 but surged in the following years, thanks to an expedited green transition of the economy. The monthly market penetration rate exceeding 50% marked a solid step toward accomplishing the government’s target of making electric vehicles the mainstream of new automobile sales by 2035.
Industry insiders attributed the popularity of NEVs to factors ranging from favorable government policies to corporate innovation. Traditional automakers like BYD have rapidly embraced electric and digital technologies, while more tech firms, including Xiaomi, are also scrambling for a foothold in the auto sector. Advances in core technologies from batteries to intelligent systems, and the formation of an efficient and reliable industry chain, have further enhanced the competitiveness of Chinese NEVs.
Bill Russo, Founder and CEO of Automobility, noted that favorable subsidies and incentives initially spurred consumer interest in NEVs, but now consumers are driven by more diverse reasons. New NEV models in China offer better experiences for tech-savvy users than before, with enhanced technology features, lower maintenance costs, a longer driving range, and improved power performance. China’s rapid expansion of charging infrastructure has also alleviated drivers’ anxiety over range. The total number of charging piles jumped 54% from a year ago to 10.24 million by the end of June. “A demand-driven market rather than a policy-driven market has become the main factor boosting the sales of domestic NEVs,” said Liu Jia, Electronics and Automotive Analyst of Nomura Orient International Securities.
In July, NEV sales rose almost 37% year-on-year, while traditional fuel vehicle sales declined 26%. As the world’s largest auto market, China’s shift toward the green- clean era could reshape the auto industry from a global perspective, promoting the global electrification process, the China Daily reports.
