Position：Home » Industry News

CHINA Rising Global Leader In The EV Rush

Writer：万利隆电子 Page View：Date：2022-09-09

China’s electric vehicle market, a rising global leader in EV technology

With the rising concerns of climate change, the case for electrification of consumer transport is undeniable since it accounts for 17% of global greenhouse gas emissions. In China, consumers are showing a faster pace to adopt electric vehicles (EV) compared to other countries globally. In 2021, the sales of electric vehicles in China reached 2.92 million and dominated more than half (53%) of the global market share. The commitment to the 2060 carbon neutrality plan and government subsidies are strong factors in stimulating EV purchase.

Despite a deceleration in growth rate between 2019 and 2020 caused by the Covid-19 pandemic, the EV market is one of the most promising industries in China, with a forecast penetration rate of 60% by 2030. There are two major factors to explain the reasons behind this fast growth of the market.

Government vigorously supports the development of the EV industry through car purchase subsidies and other means. Since 2009, USD 14.8 billion (100 billion RMB) in subsidies were provided to EV consumers but direct state aid was supposed to end in 2020. However, to help the electric vehicle sales rebound in 2020, though at reduced rates, the central government has extended monetary incentives as well as prolonged the purchase-tax exemptions of EVs throughout 2022. These brand-new incentives, together with billions of investments in charging stations, are accelerating the demand for EVs, leading to an expected growth rate of 30.82% and an estimated sales volume of 3.82 million cars in 2022.

Moreover, the development of the EV market is driving the growth of related value chains. For example, the battery industry, which is located at the upstream of the EV value chain, is benefiting from the current tailwind. In 2021, the installed capacity of batteries reached 220GWh with a year-on-year increase of 175%. However, the profitability of a single battery is reduced due to the rising price of raw materials.

As for environmental concerns, EVs themselves do not produce any harmful gas directly. Even for the manufacturing process, it is getting more environmentally friendly. After the signing of the China-US Joint Statement on Climate Change in 2013, the Paris Agreement in 2015, and the issue of the 14th 5-year plan in 2021, the central government launched various policies to control and reduce emissions from the manufacturing process, especially focusing on the shift from coal-fired powerplants to more environmental-friendly choices such as solar power.

Apart from environmental benefits, the growth of the EV industry is a way to cut dependence on oil. In 2021, China ranked 4th globally in terms of oil production per day, whereas it ranked 2nd in terms of consumption. Thus, China is highly dependent on imports, which could be costly and limited, especially under trade restrictions. The transformation toward electric cars can enhance energy security as the oil consumption from citizens could be possibly reduced.

Batteries are one of the core components of electric vehicles and account for 40% of the EV’s total cost. China possesses abundant rare earth materials for batteries. In 2021, China counts with 1.5 million tons of lithium, accounting for 6.8% of the market size globally. Although the world’s largest lithium mines are mainly concentrated in South America and Australia, Chinese companies hold a great number of shares of them. For instance, China’s Tianqi Lithium Corporation holds 51% shares of Terryson, which owns the largest and best quality spodumene mine in Western Australia.

Currently, China is the world’s largest supplier of the battery industry, boasting a market size of 324GWh, accounting for 59.4% of the global market. In addition, the Chinese battery market is expected to record an astonishing CAGR of 7.5% during the forecast period from 2022 to 2027.

Engines, gearboxes, and chassis are three key components for fuel vehicles. However, the first two of them are no longer used in EVs. Therefore, the competitive advantage of foreign automakers has become less useful in the EV market. This helps China to compete on a level playing field with foreign countries.

Precision resistors and Shunts are also highly demanding materials in EV industries. Microhm Electronics Limited, Greater China region is also benefitting from this EV Rush.

Next：IAPS 2022 The 10th China International Automobile Powertrain Summit Prev：Precision Resistors > MVR > benefits pets wearable to beat heat

Keywords：

CHINA Rising Global Leader In The EV Rush

Latest News

Hot Articles

Resistance applications