China’s EVs driving world into the post-carbon energy era
More than 50% of all cars sold in China last year were electric vehicles, making China by far the largest EV market in the world.
The exponential growth of EVs and new energy vehicles (NEVs) is having a positive impact on the air quality in major Chinese cities. Shanghai, Guangzhou and other major Chinese cities have reported notable improvements in the Air Quality Index (AQI).
Chinese EV makers are rapidly expanding overseas. Approximately 80% of all EVs sold in the world last year were made in China. Many EVs from legacy automakers like Ford, Nissan and Kia are made in China or rely on Chinese suppliers for key components like batteries. China accounts for 75% of the world’s battery cell manufacturing capacity.
The Chinese government has subsidized its EV industry with over US$200 billion in the past decade. The investment was part of China’s program to achieve carbon neutrality by 2060.
The government also uses subsidies to boost the development of batteries, wind turbines, solar panels and other green tech. The country develops more renewable energy capacity than the rest of the world combined.
The explosive sales of EVs are transforming the Chinese and the global automobile industry. Sales of most legacy (internal combustion engines) car makers are cratering, in some cases by over 10% a year.
Several foreign makers of internal combustion energy (ICE) vehicles in China are closing factories and showrooms. Even prestigious brands are struggling. Porche is closing 35 of its 138 dealerships in China.
The China EV industry has been built from the ground up, and entirely with Chinese production technology. The industry is vertically integrated and outsourcing is kept to a minimum. Vertical integration leads to