Is China the leader in EV width

By Isabella Storyclaire

last updated September 17, 2024

Contributions sourced from

How did China come to dominate the world of electric cars?

What does China’s EV market look like now?

As a result of all this, China now has an outsize domestic demand for EVs: according to a survey from the US consulting company AlixPartners, over 50% of Chinese respondents were considering battery-electric vehicles as their next car in 2021, the highest proportion in the world and two times the global average.

There are a slew of Chinese-built options for these customers—including BYD, SAIC-GM-Wuling, Geely, Nio, Xpeng, and LiAuto. While the first three are examples of gas-car companies that successfully made the switch to EVs early on, the last three are pure-EV startups that grew from nothing to household names in less than a decade.

And the rise of these companies (and other Chinese tech behemoths) coincided with the rise of a new generation of car buyers who don’t see Chinese brands as less prestigious or worse in quality than foreign brands. “Because they’ve grown up with Alibaba, because they’ve grown up with Tencent, they effectively were born into a digital environment, and they’re much more comfortable with Chinese brands versus their parents, who would still rather likely buy a German brand or a Japanese brand,” says Tu. The fact that these Chinese brands have sprinkled a little bit of nationalism into their marketing strategy also helps, Tu says.

Can other countries replicate China’s success?

Many countries are almost certainly now looking at China’s EV experience and feeling jealous. But it may not be that easy for them to achieve the same success, even if they copy China’s playbook.

While the US and some countries in Europe meet the objective requirements to supercharge their own EV industries, like technological capability and established supply chains, ICCT’s He notes that they also have different political systems. “Is this country willing to invest in this sector? Is it willing to give special protection to this industry and let it enjoy an extremely high level of policy priority for a long time?” she asks. “That’s hard to say.”

“I think the interesting question is, would a country like India or Brazil be able to replicate this?” Mazzocco asks. These countries don’t have a traditional auto industry as strong as China’s, and they also don’t have the Chinese government’s sophisticated background in handling massive industrial policies through a diverse set of policy tools, including credits, subsidies, land use agreements, tax breaks, and public procurements. But China’s experience suggests that EVs can be an opportunity for developing countries to leapfrog developed countries.

“It’s not that you can't replicate it, but China has had decades of experience in leveraging these [systems],” says Mazzocco.

Chinese brands are now looking to other markets. What challenges are they facing?

For the first time ever, Chinese EV companies feel they have a chance to expand outside of China and become global brands. Some of them are already entering the European market and even considering coming to the US, despite its saturated market and the sensitive political situation. Chinese gas cars could never have dreamed of that.

BYD and Tesla Dominate Global EV Sales

Some of the world’s leading car makers are among the exhibitors at IAA Mobility 2023 in Munich this week, where the electric future of mobility will once again take center stage. While German legacy car brands such as Volkswagen, Mercedes and BMW will try to make an impression on their home turf, they have fallen behind in the transition to electric cars lately, as they understandably continue to work on international combustion engines as well, while smaller, more specialized companies such as Tesla and Chinese market leader BYD have raced ahead.

In the first half of 2023, BYD alone sold almost 1.2 million plug-in electric vehicles (incl. plug-in hybrids), roughly double the combined total of BMW, Volkswagen and Mercedes. To make things worse for Germany’s automotive heavyweights (and other European carmakers), the company that recently surpassed Volkswagen as the number 1 car brand in China now has Europe in its sight. On Monday, BYD presented six models for the European market in Munich, showing that it means business in the market it entered less than a year ago. Between January and July, the company sold 92,469 EVs overseas, already exceeding the total of 2022.

It remains to be seen, however, how European consumers respond to the Chinese newcomer, as there is still a bit of a stigma attached to cars made in China, especially in Germany, which prides itself on its automotive excellency. The following chart, based on estimates from CleanTechnica, shows that BYD and Tesla have opened up a sizeable lead in the global EV market, where other Chinese brands such as GAC Aion, SGMW and Li Auto are also among the largest players thanks to their huge home market.

3 Drivers of China’s Booming Electric Vehicle Market

More than half of the electric vehicles (EVs) on roads worldwide are found in China. In 2022, new EV sales in China grew by 82%, and the country provided 35% of global EV exports. While the U.S., Norway, and other Scandinavian nations were early adopters of EVs, and Germany and Japan have long been automotive powerhouses, their EV markets have lagged in mass market adoption compared to China. How did China get to this point? What can companies looking to scale up their innovations learn from their approach? This article outlines three key reasons for the growth of China’s EV sector: experimenting in adjacent industries, encouraging operational solutions, and doubling down on core technology.

China’s CATL cements position as EV battery leader with jump in profits

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China’s CATL has unveiled a big increase in annual profits to cement its position as the world’s largest maker of electric car batteries, just days after a warning from the country’s leader Xi Jinping of the risks of success as geopolitical rifts with the west deepen.

Xi, who on Friday started a third term as China’s president, said this week that he was both “happy and worried” by CATL’s market leadership, according to the Xinhua News Agency.

“Nascent industries should . . . figure out where the risks are and avoid penetrating deep into enemy territory alone, only to be caught by others and get wiped out,” Xi said in a rare intervention.

This was interpreted as a warning that the group could be vulnerable to a reliance on raw materials from overseas at a time when tension between the US and China is interrupting global supply chains.

CATL also faces mounting competition from local rivals such as BYD as demands for greener transport grow, just as the US and EU try to promote their domestic battery industries.

Beijing phased out a long-running national subsidy for EV purchases at the beginning of this year, which has weakened demand.

In an attempt to fend off rivals, CATL has reportedly offered discounts to clients including Nio, Li Auto and Huawei in exchange for commitments the carmakers will commission the company for their battery needs.

Xi was speaking after meeting CATL chair Zeng Yuqun on the sidelines of Beijing’s annual parliamentary gathering.

CATL said in a regulatory filing on Thursday that annual net income rose 92.9 per cent to Rmb30.7bn in 2022, beating analysts’ expectations of Rmb28.8bn. Its full-year revenue surged 152 per cent to a record of Rmb328.6bn.

The company, based in the province of Fujian, in south-east China, has a wide range of western customers, including Tesla, Daimler, BMW and Volkswagen.

Ford last month said it would license technology from CATL to make lithium iron phosphate batteries at a $3.5bn plant in Michigan.

CATL also supplies Chinese EV makers including Nio, XPeng and Li Auto. It accounted for 37 per cent of global EV battery sales in the first 11 months of 2022, according to data from South Korea’s SNE Research.

Its Shenzhen-listed shares were steady on Thursday ahead of the results.

China’s sales of new energy vehicles, which include plug-in hybrids, pure battery and hydrogen-powered cars, jumped 61 per cent from a year earlier in February after a 6.3 per cent decline in January, data from the China Passenger Car Association showed.