How China lapped the world on EV uptake

China’s centralised economy has enabled its government to drive electric car uptake at breakneck speed.
Charging an EV.
China’s global leadership in electric vehicle (EV) uptake continues undiminished despite the impacts of COVID-19, but Europe is an emerging EV powerhouse that could soon challenge the Middle Kingdom.

That’s a key take-out from a new study released by automotive industry data specialist Jato Dynamics which concludes that even with the Chinese government pulling back subsidies the EV market there is still racing far ahead of its competitors.

According to Jato there are currently 138 different EV models available in China, compared with just 60 in Europe and 17 in the USA. At last count Australia had about 13 EV models available. 

China’s global leadership in EVs has been facilitated by its centralised economy with government policy relentlessly driving the uptake of EVs while also deterring consumers from purchasing petrol and diesel cars, says Jato. Examples include Shanghai, where a licence plate costs $13,000 for a vehicle with a combustion engine, but is free for an EV.

Public charging infrastructure is another area where China is miles ahead of other economies, with statistics from the International Energy Agency’s Global EV Outlook 2020 showing the Asian powerhouse is home to 60% of the world’s 862,118 public slow and fast charging spots. 

Here in Australia, the Electric Vehicle Council’s recently released State of Electric Vehicle Report for 2020 revealed a 40% per cent increase in public charging infrastructure in the 12 months to July 2020. Despite this, the total number of AC and DC charging stations still stands at a modest 2307.        

Pricing favours EVs in China

Highly competitive pricing is another area that helps explain China’s impressive EV penetration, with JATO’s figures showing the average retail price of EVs sold in Europe and the US in 2019 to be 58% and 52% higher than in China, respectively.

However, China’s ability to maintain its stellar EV growth trajectory will be sorely tested by the government-mandated 20% cut to subsidies in 2021, followed by a further 30% in 2022, says JATO.

At the same time the market in Europe is gaining momentum, with state intervention ramping up to accelerate uptake and growth, as countries  race to meet new carbon emission targets. 
“Notwithstanding incentives, in Europe, adoption will be economic rather than regulatory, and only when parity in total cost of ownership is achieved will EVs begin to gain a significant share of new vehicle sales,” said Jato.  

Here in Australia, the Morrison Government recently announced a $1.9 billion investment in new energy technologies, which includes a new $74.5 million Future Fuels Fund, designed to help businesses and regional communities take advantage of opportunities offered by hydrogen, electric, and bio-fuelled vehicles.

Government support welcomed

The Electric Vehicle Council, the national peak body representing the electric vehicle industry in Australia, welcomed the initiative, with the organisation’s chief executive Behyad Jafari saying the announcement represented welcome progress.

“We know businesses are waking up to the many benefits of electrifying their fleets and these grants should be the incentive they need to break with combustion engine tradition,” Mr Jafari said.

In its State of Electric Vehicles Report released before the government announcement, the EVC reported that “68 per cent of consumers want government subsidies to reduce the cost of buying an EV” with the same percentage wanting “governments to provide more public charging infrastructure”.  

The report went on to say that, despite an increase in electric vehicle sales, improvements in consumer sentiment, and the rollout of public charging infrastructure, Australia continued to lag behind comparable countries when it came to electric vehicle market share, model availability, consumer awareness, industry development, and government support.

Global comparisons of electric vehicle market share show EVs now account for about 2.5-5% of all new vehicles sold across developed countries, whereas in Australia they account for only 0.6% of all new sales, according to the Electric Vehicle Council.

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The information in this article has been prepared for general information purposes only and is not intended as legal advice or specific advice to any particular person. Any advice contained in the document is general advice, not intended as legal advice or professional advice and does not take into account any person’s particular circumstances. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives and needs.