Abstract
The plug-in electric vehicle (PEV) is recognized as a pivotal component in transportation energy security and technology innovation in China. With government incentives and substantial capital investments, the Chinese PEV market has become one of the largest in the world. However, is this market boom ephemeral or will it be continuing? This chapter provides a general review of the Chinese PEV market mainly from the consumer perspective, by summarizing the characteristics of the vehicle policies and consumer concerns in the PEV market in recent years. Moreover, it introduces detailed examples on how the policies, technologies, and infrastructure shape the market. In addition to employing large amounts of reliable data from the China Automotive Technology and Research Center for the review, the authors also adopted a quantitative analysis tool—the New Energy and Oil Consumption Credits model—to project the potential industrial impacts of the government policies in multiple scenarios. Based on the findings, it seems that the prosperity of the PEV market, incentivized by the government, will continue in the short run. The direct subsidies to PEV from the government will gradually phase out, and the supply-side push policies such as the dual-credit policy and other charging infrastructure incentives will work as the invisible hand to force the automakers to invest more in the PEV segment. However, in the long run, innovation in PEV technology and business models, together with consumer acceptance will be the major factors that can sustain further market growth.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The currency exchange rate of $1.000 USD = 6.910 CNY which is the average exchange rate in 2016. Source from the U.S. IRS “Yearly average currency exchange rates”, https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates (visited in May 2018).
- 2.
In the June 2017 draft version of dual-credit policy, the required NEV minimum ratio is 8% in 2018. However, the official version released in September 2017 postpones the implementation of NEV-credit rules one year later, which means only CAFC-credit rules took effects in 2018.
References
Beijing Municipality Government. (2018). Provisions of Beijing Municipality on motorized vehicle parking management. http://zhengce.beijing.gov.cn/library/192/33/50/438650/1543100/index.html. Accessed November 2, 2018.
Beijing Transportation Research Center. (2017). Beijing Transportation Annual Report 2017, Beijing, China. www.bjtrc.org.cn.
Bloomberg. (2020). How elon musk built a tesla factory in China in less than a year. https://fortune.com/2020/01/07/elon-musk-tesla-gigafactory-shanghai-china-ceremony. Accessed February 4, 2020.
Castle, S. (2017). Britain to ban new diesel and gas cars by 2040. New York Times (2017). https://www.nytimes.com/2017/07/26/world/europe/uk-diesel-petrol-emissions.html.
CATARC. (2014). Annual report on automotive energy-saving in China (1st ed.). Beijing, China: Posts & Telecom Press.
CATARC. (2019). Automotive data center database of China Automotive Technology and Research Center. Tianjin, China.
Chai, J., Yang, Y., Lu, Q., Xing, L., Lai, K. K., & Wang, S. (2017). Green transportation and energy consumption in China (1st ed.). New York, NY: Routledge Taylor & Francis Group.
Chen, S. (2016). The best-selling electric vehicles in year 2015 (in Chinese). Micro Electric Vehicles. http://www.aooev.com/html/201601/59439.html. Accessed July 18, 2016.
Chen, Y. (2018). New energy vehicle after market service: Real electric range is complained most. D1EV Website, 1. https://www.d1ev.com/news/shichang/64867. Accessed May 29, 2018.
Chi, D. (2018). Chances of getting a Beijing license plate hit record low of one in 1,907. Global Times. https://gbtimes.com/chances-of-getting-a-beijing-license-plate-hit-record-low-of-one-in-1907.
China Automotive Technology and Research Center, Nissan Group of China, Dongfeng Motor Company. (2018). Annual report on new energy vehicle industry in China. Beijing, China: Social Sciences Academic Press. http://www.ssapchina.com/ssapzx/c_00000009000200010007/d_1202.htm.
Cui, H., Jin, L., Zhou, H., Zhang, J., Zhang, B., Liu, X., & He, H. (2018a). The assessment of the new energy vehicle incentive policies in the Chinese cities, Beijing, China. https://www.theicct.org/publications/evaluation-incentive-policies-China-urban-NEVs.
Cui, H., Jin, L., Zhou, H., Zhang, J., Zhang, B., Liu, X., He, H. (2018b). Evaluation of incentive policies for new energy passenger vehicles in Chinese cities, Beijing China. https://www.theicct.org/publications/evaluation-incentive-policies-China-urban-NEVs.
D1EV Web. (2016). Electric vehicles information database (in Chinese). http://www.d1ev.com/salecar. Accessed July 18, 2016.
Davis, S., Williams, S.E., Boundy, R.G., & Moore, S. (2016). Vehicle Technologies Market Report, Oak Ridge, TN. http://cta.ornl.gov/vtmarketreport/index.shtml.
Hao, Y. (2018). Investments helps internet startup NextEV kick off mass production. China Daily, 1. http://www.chinadaily.com.cn/cndy/2017-11/13/content_34464531.htm. Accessed May 15, 2018.
Hao, H., Ou, X., Du, J., Wang, H., & Ouyang, M. (2014). China’s electric vehicle subsidy scheme: Rationale and impacts. Energy Policy, 73, 722–732. https://doi.org/10.1016/j.enpol.2014.05.022.
Helveston, J. P., Liu, Y. E., Feit, M., Fuchs, E., Klampfl, E., & Michalek, J. J. (2015). Will subsidies drive electric vehicle adoption? Measuring consumer preferences in the U.S. and China. Transportation Research Part A: Policy Practice, 73, 96–112. https://doi.org/10.1016/j.tra.2015.01.002.
Howell, S., Lee, H., & Heal, A. (2014). Leapfrogging or stalling out? Electric vehicles in China. HKS Working Paper. http://dx.doi.org/10.2139/ssrn.2493131.
Huo, H., Cai, H., Zhang, Q., Liu, F., & He, K. (2015). Life-cycle assessment of greenhouse gas and air emissions of electric vehicles: A comparison between China and the U.S. Atmospheric Environment, 108, 107–116. https://doi.org/10.1016/j.atmosenv.2015.02.073.
Huo, H., Zhang, Q., Wang, M. Q., Streets, D. G., & He, K. (2010). Environmental implication of electric vehicles in China. Environmental Science and Technology, 44, 4856–4861. https://doi.org/10.1021/es100520c.
International Energy Agency. (2017). Global EV outlook 2017, Paris, France. https://www.iea.org/publications/freepublications/publication/GlobalEVOutlook2017.pdf.
Jiang, C. (2016). MIIT changes the subsidy strategies (Chinese). http://www.gov.cn/xinwen/2016-12/21/content_5150850.htm#1. Accessed August 28, 2018.
Jiao, J., Zuo, F., Li, L., Yuan, H., & Li, J. (2017). Estimation of China’s alternative policies of automotive fuels—A perspective of oil dependence. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2017.05.107.
Li, Z., & Sun, L. (2011). The impact of the government policy on the Chinese electric vehicle industry and business strategy management: Case of FAW. Linköpings Universitet. http://www.diva-portal.org/smash/get/diva2:445387/fulltext01.pdf.
Lin, Z. (2014). Optimizing and diversifying electric vehicle driving range for US drivers. Transportation Science, 48, 635–650. https://doi.org/10.1287/trsc.2013.0516.
Lin, Z., & Greene, D. L. (2011). Promoting the market for plug-in hybrid and battery electric vehicles: Role of recharge availability. Transportation Research Record, 2252, 49–56. https://doi.org/10.3141/2252-07.
Liu, H., & Yu, Q. (2018). Forbidden regional protectionism on new energy vehicles (Chinese). Xinhua News Agency. http://www.gov.cn/xinwen/2018-02/15/content_5266998.htm. Accessed February 15, 2018.
Ma, S., Fan, Y., & Feng, L. (2017). An evaluation of government incentives for new energy vehicles in China focusing on vehicle purchasing restrictions. Energy Policy, 110, 609–618. https://doi.org/10.1016/j.enpol.2017.07.057.
Marquis, C., Zhang, H., & Zhou, L. (2013). China’s quest to adopt electric vehicles. http://hdl.handle.net/1813/36438.
MIIT. (2015). Notice on financial support policies on the promotion and application of new energy vehicles (2016–2020). http://www.miit.gov.cn/n1146290/n4388791/c4214459/content.html. Accessed August 28, 2018.
MIIT. (2013). Notice of continuing on the promotion and application of new energy automobiles. http://www.gov.cn/zwgk/2013-09/17/content_2490108.htm. Accessed August 27, 2018.
MIIT. (2017). Measures on parallel administration of passenger car enterprise average fuel consumption and new-energy vehicle credits. http://www.miit.gov.cn/n1146290/n4388791/c5826378/content.html. Accessed October 30, 2018.
MIIT. (2018). Notice on adjusting and improving the policy of financial subsidy for promoting and applying new energy vehicles (Chinese). http://www.miit.gov.cn/n1146295/n1652858/n1652930/n3757018/c6064786/content.html. Accessed August 28, 2018.
Ministry of Science and Technology of P.R.C. (2014). Notice of further promotion and application of new energy vehicles (in Chinese). http://www.most.gov.cn/tztg/201402/t20140212_111801.htm. Accessed August 27, 2018.
Moss, T. (2018). Tesla to build auto factory in Shanghai. Wall Street Journal (2018). https://www.wsj.com/articles/tesla-to-build-auto-factory-in-shanghai-1531230784. Accessed October 7, 2018.
Moss, T., & Colias, M. (2018). China to ease rules on foreign auto makers. Wall Street Journal, 1. https://www.wsj.com/articles/china-to-ease-rules-on-foreign-auto-makers-1523963345. Accessed May 25, 2018.
NDRC. (2018). Notice of the State Council on implementing the price and tax reform of refined oil, China. http://www.chinatax.gov.cn/n810341/n810765/n812171/n812675/c1190752/content.html.
Office of Energy Efficiency & Renewable Energy. (2016). Global plug-in light vehicle sales increased by about 80% in 2015. U.S. Department of Energy. http://energy.gov/eere/vehicles/fact-918-march-28-2016-global-plug-light-vehicle-sales-increased-about-80-2015. Accessed July 18, 2016.
Office of Energy Efficiency & Renewable Energy. (2017). China has the highest number of sales of plug-in vehicles in the world. U.S. Department of Energy. (2017). https://www.energy.gov/eere/vehicles/fact-976-may-8-2017-china-has-highest-number-sales-plug-vehicles-world. Accessed May 14, 2018.
OFweek. (2020). NIO Auto’s sales grew more than 80% in 2019 and it still faces more difficulties in 2020 (Chinese). https://nev.ofweek.com/2020-01/ART-71008-8440-30424276.html. Accessed February 4, 2020.
Ou, S., Hao, X., Lin, Z., Wang, H., Bouchard, J., He, X., et al. (2019). Light-duty plug-in electric vehicles in China: An overview on the market and its comparisons to the United States. Renewable and Sustainable Energy Reviews, 112, 747–761. https://doi.org/10.1016/j.rser.2019.06.021.
Ou, S., Yu, R., Lin, Z., Ren, H., He, X., Przesmitzki, S., & Bouchard, J. (2019). Intensity and daily pattern of passenger vehicle use by region and class in China: estimation and implications for energy use and electrification. Mitigation and Adaptation Strategies for Global Change, 1–21.
Ou, S., Lin, Z., He, X., & Przesmitzki, S. (2018a). Estimation of vehicle home parking availability in China and quantification of its potential impacts on plug-in electric vehicle ownership cost. Transport Policy, 68, 107–117. https://doi.org/10.1016/j.tranpol.2018.04.014.
Ou, S., Lin, Z., Qi, L., Li, J., He, X., & Przesmitzki, S. (2018b). The dual-credit policy: Quantifying the policy impact on plug-in electric vehicle sales and industry profits in China. Energy Policy, 121, 597–610. https://doi.org/10.1016/j.enpol.2018.06.017.
Ou, S., Lin, Z., Wu, Z., Zheng, J., Lyu, R., Przesmitzki, S., et al. (2017). A study of China’s explosive growth in the plug-in electric vehicle market. Knoxville TN. https://doi.org/10.2172/1341568.
Panasonic News Bureau. (2015). Panasonic Factory in Dalian, China begins mass production and shipments of automotive lithium-ion batteries. Panasonic, 1. https://news.panasonic.com/global/press/data/2018/03/en180313-3/en180313-3.html. Accessed May 15, 2015.
ResearchAndMarkets.com. (2018). China Low-speed Electric Vehicle Industry Report, 2018–2022, Dublin. https://www.prnewswire.com/news-releases/china-low-speed-electric-vehicle-industry-report-2018-byvin-yogomo-and-shifeng-group-are-the-top-3-players-300657214.html.
Schmidt, E. (2018). Electric vehicle sales in Canada, 2017. Fleetcama. https://www.fleetcarma.com/electric-vehicle-sales-canada-2017/. Accessed May 14, 2018.
Schmitt, B. (2016). Large number of Chinese EV sales fake, investigators say. Forbes. http://www.forbes.com/sites/bertelschmitt/2016/02/01/large-number-of-chinese-ev-sales-fake-investigators-say/#5c0fb25f4dc3.
Shenzhen Municipal Finance Commission, Shenzhen Development and Reform Commission. (2017). Financial support policy for the promotion and application of new energy vehicles in 2017 in Shenzhen. Shenzhen Municipality Government, 1. http://www.sz.gov.cn/zfgb/2017/gb1016/201708/t20170816_8142020.htm. Accessed May 28, 2018.
Shenzhen Municipal Government. (2018).Passenger car ownership control in Shenzhen. http://www.szxqcjj.com/jjjg.shtml. Accessed October 31, 2018.
SHEVDC. (2017). Shanghai New Energy Vehicle Market Characteristics and User Behavior Research Report 2017, Shanghai, China. http://www.shevdc.org/report/.
Sohu Auto. (2018). Trend analysis of government subsidies in 2018. http://www.sohu.com/a/238423857_383324. Accessed October 31, 2018.
Sohu, Former Director of the Planning Division in the Ministry of Industry and Information Technology blamed the New Energy Vehicle Planning in Beijing (in Chinese) (2016). http://auto.sohu.com/20160217/n437613315.shtml. Accessed July 19, 2016.
Tamor, M. A., Gearhart, C., & Soto, C. (2013). A statistical approach to estimating acceptance of electric vehicles and electrification of personal transportation. Transportation Research Part C: Emerging Technologies, 26, 125–134. https://doi.org/10.1016/j.trc.2012.07.007.
Temple, J. (2018). China’s ambition to power the world’s electric cars took a huge leap forward this week. MIT Technology Review, 1. https://www.technologyreview.com/s/611448/chinas-ambition-to-power-the-worlds-electric-cars-took-a-huge-leap-forward-this-week/.
The State Council of P.R China. (2012). Planning for the development of the energy-saving and new energy automobile industry (2012–2020) (p. 16). http://www.scio.gov.cn/32344/32345/32347/33535/xgzc33541/Document/1450371/1450371.htm.
The Strategic Advisory Committee, SAE-China. (2016). Technology roadmap for energy saving and new energy vehicles (1st ed.). Beijing, China: China Machine Press.
The Tariff Commission. (2018). Notice on reducing vehicles and components import tariffs by the Tariff Commission. Minist of Finance of the P.R.C, 1. http://gss.mof.gov.cn/zhengwuxinxi/zhengcefabu/201805/t20180522_2903728.html. Accessed May 29, 2018.
Tian, Y., Xie, H., Zhao, Y. (2017). China plans to kill local subsidies for electric cars. Bloomberg News. https://www.bloomberg.com/news/articles/2017-12-18/china-is-said-to-plan-killing-local-subsidies-for-electric-cars-jbbq58bn. Accessed May 18, 2018.
U.S. Department of Energy. (2020). Alternative fuels and advanced vehicles data center. http://www.afdc.energy.gov/. Accessed Feburary 5, 2020.
Xie, F., & Lin, Z. (2017). Market-driven automotive industry compliance with fuel economy and greenhouse gas standards: Analysis based on consumer choice. Energy Policy., 108, 299–311. https://doi.org/10.1016/j.enpol.2017.05.060.
Xinhua News Agency. (2016). China’s unveils measures to promote the private investment. State Council Information Office. http://www.scio.gov.cn/32344/32345/33969/35257/35264/Document/1493927/1493927.htm. Accessed January 1, 2016.
Yamazaki, M. (2018). Japan’s Panasonic says it could make batteries with Tesla in China. Reuters, 1. https://www.reuters.com/article/us-panasonic-results/japans-panasonic-says-it-could-make-batteries-with-tesla-in-china-idUSKBN1IB0X2. Accessed May 15, 2018.
Zheng, J., Mehndiratta, S., Guo, J. Y., & Liu, Z. (2012). Strategic policies and demonstration program of electric vehicle in China. Transport Policy, 19, 17–25. https://doi.org/10.1016/j.tranpol.2011.07.006.
Acknowledgements
The authors would like to thank Aramco Services Company for their generous financial support for this study, and the China Automotive Technology and Research Center for their data support. The authors are solely responsible for the views expressed in this book chapter.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Ou, S. et al. (2020). China’s Booming Plug-in Electric Vehicle Market—How Will It Continue?. In: Contestabile, M., Tal, G., Turrentine, T. (eds) Who’s Driving Electric Cars. Lecture Notes in Mobility. Springer, Cham. https://doi.org/10.1007/978-3-030-38382-4_11
Download citation
DOI: https://doi.org/10.1007/978-3-030-38382-4_11
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-38381-7
Online ISBN: 978-3-030-38382-4
eBook Packages: EnergyEnergy (R0)