China is the largest electric vehicle market in the world — by a long shot.
According to the China Passenger Car Association, new energy passenger vehicle sales in China totaled 1,016,002 units last year, up 83 percent year-over-year.
Including commercial vehicles, the total jumps to 1,256,000 units. The vast majority of these vehicles are made in China.
The new energy vehicle category includes plug-in hybrid electric vehicles, battery electric vehicles and fuel cell electric vehicles. However, FCVs make up a tiny fraction of new energy vehicle sales with fewer than 5,000 of these cars on the road in China today.
China is investing big in electrified transportation to improve air quality in cities, reduce oil imports and mitigate carbon dioxide emissions. But arguably the most important driver is that China sees EVs as good industrial policy.
New energy vehicles are a part of “Made in China 2025,” an ambitious industrial strategy unveiled in 2015 with the objective of making China a major competitor in several core technology areas. To China, EVs offer a path to dominating the global automotive market, and have attracted strong financial and policy support from top leadership as a result.
EV manufacturing plant data shows China is already pulling in the vast majority of investment. According to Bloomberg New Energy Finance, as of last August China had 47 plants where EVs were being made or planned to be made. At that time, the rest of the world combined had 39.
Chinese firms are also rapidly scaling up lithium-ion battery gigafactories to serve the global EV market.
China’s EV market is simply far too big to ignore.