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China's new energy vehicle sector: Where are we now and what's ahead?

Time : 2023-08-28Hits : 11

Under the initiative to achieve the country's peak carbon emissions by 2030 and carbon neutrality by 2060, the new energy vehicle (NEV) industry in China carries an important historic mission on its shoulders. It is not only a pillar industry for economic development but also a major force for rewriting the history of China's automobile manufacturing industry and building a low-carbon future.

China is the world's largest auto market, with nearly 30 million vehicles produced and sold annually. But nearly 90 percent of them are fossil-fuel-powered vehicles. It is now a global consensus to take the path of eco-friendly and low-carbon development.

It is expected that in about 10 years, fossil-fuel-powered vehicles will have given up half of their market share to NEVs, and by 2040, mainstream manufacturers will no longer sell vehicles powered by fossil fuels. Therefore, the development of NEVs, especially electric vehicles, has brought new opportunities for the development of China's automobile manufacturing industry.

After more than a decade of development, China is now the world's largest market for NEVs. In 2020, more than 10 million NEVs were in circulation worldwide, and China accounted for nearly half.

In 2021, despite the impact of the pandemic and the chip shortage, China's NEV market bucked the global downtrend and registered growth, with annual sales jumping to 3.52 million units, up 1.6 times year on year, accounting for 13 percent of all new vehicles sold. In the coming years, China's NEV market will enter a period of rapid growth, with a projected adoption rate of over 25 percent by 2025.

From a strategic point of view, the development of China's NEV industry is important because it can contribute to the low-carbon transformation of the transport sector, and electric vehicles can serve as energy storage facilities to support the new electric power system. NEVs can be integrated into the new power system to promote the massive development of wind, solar and other renewable energy sources.

To achieve peak emissions and carbon neutrality, China's economy and society will undergo a profound systemic change, and integrating NEVs with the power system will be an important catalyst for accelerating this transformation.

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