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Strategic Analysis of the Chinese Electric Vehicle Market
Frost & Sullivan, Oct 2010, Pages: 113
Chinese Electric Vehicle Market to Step on Pedal from 2012
Currently niche EV makers and traditional OEMs in the Chinese automotive market are running pilot programmes based on lead acid and lithium-ion (Li-ion) batteries. By 2012, mainstream local vehicle makers are expected to introduce CEVs and eREVs based on Li-ion batteries for consumer use. Strong growth is anticipated during 2013-2015 as local and JV vehicle makers aggressively roll out CEVs and eREVs, supported by growth in the charging infrastructure and declining Li-ion battery prices. This is being supported by various government-backed incentives programmes. Such trends are making the Chinese EV market a hot destination for local and foreign vehicle manufacturers.
The Chinese Government is actively seeking ways to reduce global warming, which is primarily caused by the burning of hydrocarbon fuels. With zero-emission performance, EVs contribute significantly to this goal. “The Chinese government is determined to make China the leading EV market by 2015,” notes the analyst of this research. “To this end, they are offering several incentives and subsidies for the development and purchase of EVs.” Cash subsidies will be extended to individual customers in five cities including Beijing, Shanghai, Chongqing, Changchun and Shenzhen from 2011. The Ministry of Industry and Information Technology (MIIT) in China will provide a 20 billion RMB package from 2010 to 2012, offering tax breaks and R&D support to OEMs developing new energy cars, including EVs. The Ministry of Science and Technology (MST) is offering a 10 billion RMB subsidy package to sponsor the R&D activities of local OEMs in designing and manufacturing new energy cars. The Chinese Government offers cash incentives of up to $8,824 per CEV and $6,618-$7,353 per eREV in the 13 selected cities. This is expected to be extended to 20 cities in late 2010 for fleet buyers.
Government Incentives Coupled with Infrastructure Development to Promote Mass Adoption of EVs
Many potential Chinese customers do not clearly understand that the running cost of EVs is much lower than that of conventional cars. Moreover, the ability of EVs to reduce pollutant emissions is not fully acknowledged. “In addition to high cost, prospective customers are also concerned about the high voltage system and worry about safety issues of lithium-ion battery packs,” cautions the analyst. “Some potential customers believe EVs offer inferior driving performance compared to conventional vehicles.” These negative consumer perceptions are some major challenges that will need to be overcome in the Chinese EV market.
Nevertheless, subsidies and incentives offered by the Chinese Government, along with the aggressive re-charging infrastructure plan they have rolled out, will ensure the mass adoption of EVs in China where there is already a huge market for electric two-wheelers. Additionally, as domestic OEMs like BYD, Chana and SAIC are also eyeing the eREV market, this will boost consumer confidence in the driving range and performance of an EV. “The massive government backing, aggressive infrastructure plans for restructuring and focus on all types of EVs ranging from NEV, CEV to eREV will constitute key reasons for growth of the overall electric vehicle market in China by 2015,” concludes the analyst.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Neighbourhood electric vehicles (NEVs)
- City electric vehicles (CEVs)
- Extended-range electric vehicles (eREVs)
- High performance electric vehicles (HPEVs)
This Frost & Sullivan research service titled Strategic Analysis of the Chinese Electric Vehicle Market provides a strategic overview of the market including technology roadmaps, market size overview, OEM strategies and business model overview. It examines key drivers, restraints and challenges, provides an electric vehicle (EV) demand analysis in China from 2009 to 2015, and maps domestic and international OEM activities in the market. Profiles of key suppliers and OEM activities are provided. Also included is an in-depth examination of EV infrastructure development and incentive packages announced by Chinese government. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: neighbourhood electric vehicles (NEVs), city electric vehicles (CEVs), extended-range electric vehicles (eREVs) and high performance electric vehicles (HPEVs).
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