China: The Global Winner of EV Production?
Tesla dominates news stories in the US about the sales of electric vehicles, followed by the big US automakers. However, China is becoming increasingly dominant in the world of EV production. It is well known that China produces the vast majority of batteries.
Let’s Dig Deeper
The near monopoly China has over many of the raw materials used to make EV batteries, including several essential rare earth minerals, is where it all begins. China produces more than 60% of the world’s rare earth minerals, but due to its influence over the global supply chain for resources from other nations, the actual percentage is significantly greater. The domestic market in China alone generates enough demand to sustain exponential output growth. At 3 million units sold domestically in 2021, it will be the largest EV market in the world. The country is constructing a vast network of publicly accessible charging stations, with a current count of 1.15 million and growing, to accommodate those vehicles. Approximately one charging station is available for every five automobiles in the nation.
First off, the Chinese government actively promotes the growth of the EV business through financial incentives for car purchases and other initiatives. The federal government has extended financial incentives and extended the purchase-tax exemptions of EVs through 2022 in an effort to support the recovery of electric car sales in 2020, albeit at lower rates. With the help of these recent incentives and massive investments in charging infrastructure, the market for EVs is predicted to increase at a rate of 30.82% in 2022, with an estimated volume of 3.82 million vehicles sold.
Increase in the competition
It is obvious that China’s electric vehicle market will be a key area of the automotive industry given the country’s economic development, national security, and environmental protection concerns. Additionally, as conventional companies like BYD and upstart brands like NIO, Xpeng, and Li Auto expand quickly, domestic market competition is sure to heat up, spurring even more EV industry innovation. Recognizing some of the persistent dangers, such as the mismatch between supply and demand, the pandemic’s consequences, and limited government funding, is crucial. In the long term, all of these variables could slow the market’s overall growth.
Bottomline
As the first half of 2022 has demonstrated, one region can quickly overtake another to hold the market’s top position for electric vehicles. Ultimately, regulatory requirements and additional incentives are what drive automobile makers to deliver appealing, cutting-edge goods while also piquing public interest. Finding the ideal balance and timing is what makes it so difficult, a problem that we are keen to keep resolving by giving data and analyses like we usually do.
