A Chinese retiree bought an all-electric, small sport-utility vehicle from BYD at an auto show for $20,000. She decided to go electric because she was concerned about the price of gas and wanted to save money. Her son had bought an E.V. a few months before.
All-electric and plug-in hybrid cars will make up 25% of all new cars sold in China this year. There are more than 300 Chinese companies that make E.V.s, ranging from discount offerings below $5,000 to high-end models that are more expensive than those made in Germany. The number of charging units in the country has doubled from a year ago.
While other E.V. markets are heavily dependent on subsidies and financial incentives, China has entered a new phase where consumers are weighing the merits of electric vehicles against gas-powered cars based on features and price without much consideration of state support. The US is far behind. 5 percent of new car sales were accounted for by E.Vs this year. It was China that passed that level last year.
New U.S. incentives have raised questions about how effective they will be in addressing factors such as long wait lists and high prices. The tax credit for electric vehicles was part of the inflation reduction act. The credit didn't apply to many current E.V. models and could increase the cost of building one.
It took China more than a decade of subsidies, long-term investments and infrastructure spending to build its electric vehicle market. Tu Le is a managing director of the Beijing-based Sino Auto Insights. In China, we're competing on price. We compete on features. Mr. Le said that it was not a subsidy. The market is moving in a certain direction.
The only way that China could transform from a big automobile country to an automobile power was through the development of electric vehicles. China wants 20% of new car sales to be electric by 2025. This year is likely to be three years ahead of schedule for China. China is expected to sell six million vehicles this year, more than the rest of the world combined.
Half of the world's top 10 best-selling E.V. brands are Chinese, led by BYD, which lags onlyTesla in global market share. Car sales in China are not the only success story. Beijing has a tight grip on access to critical raw materials and is the biggest player in the industry.
The Chinese economy is still sluggish but the demand for electric cars is a bright spot. China said it would keep pouring money into electric cars. Beijing said last month that it was extending a tax exemption for new energy vehicles until 2023 at a cost of 14 billion dollars, instead of letting it expire this year as scheduled.
Gou Chaobo said financial incentives did not affect his decision to go electric. Traditional cars are not allowed to be on the road on certain days of the week in the megacity of Chengdu. Electric vehicles are free to leave and return. The first two hours of parking are free for electric cars.
The cost of operating an electric vehicle is less than that of a gas-powered car, according to Mr. Gou. He will benefit from a government subsidy that can knock almost $2,000 off the sticker price if he chooses a specific car.
Mr. Gou said that he decided to go electric because of the future's direction. In other markets, electric vehicles from traditional automakers are often considered luxury vehicles, whereas Chinese brands are also competing with inexpensive models. It's made by a joint venture of General GM and SAIC in China.
When the red carpet was rolled out for Tesla to build a huge factory in China, it was clear that the country was serious about developing electric vehicles. It was thought that the move would force the domestic market to compete with an industry leader. The Shanghai government helped foot some of the costs of building the factory that became the first foreign automaker to manufacture in China.
After some early stumbles and Covid lock ups that hobbled its China operations,Tesla now produces more vehicles at its Shanghai factory than anywhere else. A lot of Chinese competitors are making new models at a rapid pace. The majority of electric vehicles sold in China this year were made by domestic companies. Most foreign brands have a hard time keeping up with their Chinese rivals.
Most of the Chinese companies are likely to fail from the challenges of manufacturing electric vehicles at the scale needed to drive down costs because of the domestic competition. The move from selling cars at home to selling them abroad is not easy. As sales of gas-powered cars plummet, Chinese manufacturers have little choice but to go all in on electric.
Last month, one of China's most prominent automakers, with investments in Volvo Cars and Mercedes-Benz, said it intended to sell more electric and hybrid vehicles next year. The Chinese E.V. brands have been more aggressive in integrating new technologies into their vehicles, according to the principal analyst for Canalys.
The retiree who bought an electric S.U.V. chose BYD because she preferred a larger brand. The air-conditioning on her son's E.V. car broke after a few months, so she was cautious about buying a new brand. The minimal features did not suit her tastes. There wasn't anything inside. Ms.Zhang said she didn't like the design. It's a bit different from our Chinese lifestyle.
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