China's new energy vehicle industry is expected to enter a period of rapid growth. The Ministry of Science and Technology of China has released the "Implementation Plan for the National Key Research and Development Program on New Energy Vehicles (Draft for Comments)" (hereinafter referred to as the "Plan"), which plans to establish a complete electric vehicle system and industrial chain by 2020 and achieve the goal of 5 million new energy vehicles.
Analysis suggests that China's new energy vehicle market is expected to surpass the US market and become the world's largest in the next year or two. However, the promotion of new energy vehicles still faces significant obstacles in second-, third-, and fourth-tier cities.
According to China News Service, data shows that in January this year, China produced 6,599 new energy vehicles, nearly five times the number produced year-on-year. Among them, 2,108 were pure electric sedans, nearly five times the number produced year-on-year; 2,278 were plug-in hybrid electric sedans, nearly seven times the number produced year-on-year; 1,343 were pure electric commercial vehicles, nearly six times the number produced year-on-year; and 870 were plug-in hybrid electric commercial vehicles, nearly two times the number produced year-on-year.
Industry insiders point out that China and the United States have become the world's largest new energy vehicle markets. Although China's new energy vehicle sales in 2014 were still 40,000 units behind the United States, due to the policy dependence of new energy vehicles and China's unique and highly efficient policy system, China's new energy vehicle market will surpass the United States market in the next one or two years to become the world's largest new energy vehicle market.
Consumers in second-, third-, and fourth-tier cities generally believe that local air quality is currently good, unlike the severe pollution in first-tier cities. Meanwhile, electric vehicles with similar specifications are more than twice as expensive as gasoline vehicles, making it difficult to boost consumer willingness to purchase without substantial subsidies. Furthermore, the availability of charging stations and the range limitations of electric vehicles themselves are major factors hindering their widespread adoption in these regions.
Currently, there are numerous small and medium-sized enterprises (SMEs) in China's automotive industry supply chain. With major governments around the world developing policies to increase the market share of new energy vehicles, SMEs in the supply chain are advised to carefully assess whether their products will face the risk of needing to transform and to respond as early as possible.
Sources: Environmental Information Center(2015-02-24
