China is leading global EV race says International Energy Agency, has highest number of EV adopters

beijingwalker · May 3, 2023

China is leading global EV race says International Energy Agency, has highest number of EV adopters

Mehul Reuben Das May 02, 2023 15:15:13 IST

In the United States, Tesla dominates the news concerning electric car sales, followed by the main American automakers. However, China is gaining global dominance in EV production.

The dominance of China in battery manufacture is well recognised. According to Rahul Sen Sharma, managing partner of Indxx, a financial services organisation, Chinese producers account for around 60 per cent of world exports, and that figure is rising.

According to the International Energy Agency, sales of electric vehicles reached new highs last year, with China leading the way.

The IEA claimed in the current edition of its annual Global EV Outlook that global sales of battery electric cars and plug-in hybrids will surpass 10 million in 2022, with China accounting for 60 per cent of the vehicles sold. According to the survey, the East Asian country is home to more than half of all electric vehicles now on the road globally.

Europe is the second largest market, with electric car sales expected to increase by more than 15 per cent by 2022. The third-largest market, the United States, witnessed a 55 per cent growth last year, with electric vehicles accounting for 8 per cent of all automobile sales.

According to the IEA, the percentage of electric cars in total auto sales has been gradually increasing over the previous several years, going from less than 5 per cent in 2020 to 14 per cent last year.

The agency anticipates a significant increase this year as a result of national policies and incentives that assist boost sales, as well as worries that last year’s high oil prices would repeat.

According to figures released by the Financial Times on Friday, Chinese EV producer BYD, a rival to Elon Musk’s Tesla, had its earnings climb 411 per cent in the first quarter of this year. The manufacturer’s net sales increased 400 per cent in 2022 compared to the previous year, thanks to the manufacturer’s largest investor, American business billionaire Warren Buffett. According to the Financial Times, BYD accounts for 40 per cent of EV sales in China, while Tesla accounts for 11 per cent.

Many American and other major EV markets are unaware that China is the world leader in the manufacture of full EVs. Despite having almost little presence in the US market, Chinese brands accounted for 53 per cent of all worldwide EV sales in 2021.

The figure includes both high-priced cars, which account for the lion’s share of the EV market, and less-expensive items, such as two- and three-wheelers popular in China, India, and Southeast Asia.

According to Sen Sharma, China’s goal to dominate the EV industry is motivated by the government’s desire to reduce carbon emissions. While China is not a signatory to the Paris Climate Agreement, it has committed to carbon neutrality by 2060. “This is part of their plan to get there,” Sen Sharma says.

China’s home market alone generates enough demand to enable exponential output development. It is now the world’s largest EV market, with domestic sales of 3 million units expected in 2021.

To accommodate those cars, the country is constructing a large network of publicly accessible charging stations, totalling 1.15 million and growing. That equates to approximately one charging station for every five vehicles in the country. According to Sen Sharma, China intends to invest an additional $1.42 billion in its charging network.

It remains to be seen if the United States can break China’s stranglehold on the global EV market. Sen Sharma observes that the United States has yet to reclaim the global leadership in solar panels that it lost to China more than a decade ago, and the quest for a strong footing in EVs may be much more difficult.

Price, he adds, will be the decisive factor. The goal is that an increase in American EV production will lower the cost of domestic vehicles, making them more appealing to customers. “How it turns out over the next 10 to 15 years is going to be driven by economics,” Sen Sharma adds, admitting that “nobody has a crystal ball.”