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China takes world leadership on EV sales, battery production

Mon 15 May 2017 | Back to news list

New rules to be set in China, the world's largest car market, would require as much as 8% of manufacturers' sales to be electric vehicles as soon as 2018. Car makers who fail to meet the target may be forced to buy expensive 'credits' from competitors who exceed their sales requirement.

According to the Financial Times, the plans are designed to encourage local production of battery-powered cars by allowing makers to trade credits. 

The main beneficiaries of the new policy will be companies that produce electric vehicles locally — such as BYD and BAIC, the largest sellers of electric vehicles in China, which will probably be able to sell excess credits.

Last year, electric vehicle sales in China exceeded 300,000. China’s 13th five-year plan that came into effect last year set an ambitious target for cumulative sales of EV’s to reach more than 5m by 2020. China's sales are ahead Germany, France, Italy, the United States, Japan and South Korea.

Stricter emissions regulations in major Chinese cities are also injecting new impetus into the electric vehicle sector.

Another major driver behind China's pole position is its advantages in battery cell production, according to German consulting firm Roland Berger (reported in Biz News China). Locally produced lithium-ion cells contributed more than 90% of the total to the Chinese EV market thanks to state subsidies.

A survey by Nielsen shows that the popularity of clean energy vehicles is rising among Chinese consumers, with 27 percent of car-buyers willing to consider purchasing fully electric vehicles this year, while 25 percent are interested in plug-in hybrid electric vehicles.

Nielsen's report finds that demand for longer battery life is particularly strong among fully electric vehicle buyers. The average expected driving range rose to 374 km in 2017, while the actual distance was extended to 252 km this year, close to the expectation of 265 km reported last year. The average expected range among mid-range vehicle buyers is 309 km, while high-end customers look for 462 km on average in 2017.

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