China is leading the world in electric vehicle (EV) sales and adoption by a massive distance and seeks to maintain its supremacy with a package of incentives given for companies who contribute to the electric mobility ecosystem.

EV in China is getting momentum to grow at an unprecedented speed. China saw 1.2 million electric vehicles on the road as of 2017, far above the United States and Europe with 760,000 and 710,000 respectively.

US-based electric mobility company Tesla also lends its hand to support China’s EV production and sales growth. In 2017, Tesla sold 17,000 vehicles in China, making the country its second-largest market for EVs after the US. Tesla also mulls to establish an additional car plant in China with a production capacity of 500,000 cars per year.

Despite this aggressive growth, the government is still targeting to achieve 5 million electric vehicles by 2020. The new electric vehicles sales in China is expected to reach 1.1 million and 1.5 million by 2019 and 2020 respectively.

The massive EV production follows hard on the heel of a global shift towards renewable energy storage made possible by lithium-ion batteries. In 2017, China’s EV battery production was 11 times that of the US and 22 times that of Europe. This number is expected to increase up to 180 GWh production in 2022.

The supporting facilities for EV are significantly growing. China plans to build 12,000 centralized charging/battery swap stations and 4.8 million scattered charging piles across the country by 2020 to meet charging demand of 5 million EVs in principle of one vehicle to one charging pile.

The growth is also backed with their consumers’ wealth and preferences which have shifted towards greater consumption of manufactured and tertiary goods. 

Government’s support

The Chinese government has stated supports for a greater EV adoption and implement a package of policies intended for EVs to account for 12% of overall sales by 2020, making electric cars more affordable and convenient.

Several pro-EV policies that have been rolled by the government include zero emission vehicle regulation and subsidies for EV manufacturers. On the consumers’ side, China’s central government has paid subsidies between $3,000 and $6,600 per electric vehicle and most local governments have added between 15% and 50% on top of that amount. 

Will China (and the world) be able to sustain EV in the long term?

Despite the aggressive growth of EV in China and other parts of the world, many stakeholders hold concerns about its sustainability due to limited nickel resources to accommodate double-digit growth. And given this pressing challenge, China seeks to continue innovating in order to maintain its prominent share in the global lithium-ion battery market as effectively and efficiently as possible, ambitiously aiming to achieve 217.2 GWh of annual production capacity by 2020.