SMM News: according to a new report released by Bloomberg New Energy Finance (BNEF), thanks to the Chinese government's promotion of green cars, China will become a major battlefield for electric vehicle manufacturers over the next two decades. Although the electric car market in the United States and Europe will also make progress.
According to a report released Wednesday by BNEF, the Asian country's annual sales of electric vehicles will reach 2 million by next year, after exceeding 1 million for the first time in 2018. While China currently accounts for more than half of global electric vehicle sales, other regions will begin to catch up and China's market share will shrink to about 25 per cent by 2040, the researchers said.
China's growth means that even if sales start to rise elsewhere, manufacturers such as Volkswagen and Tesla will not be able to relax their focus on the Chinese market. Both companies plan to start making electric cars in China, where Nissan is looking for suitable acquisition targets in the Chinese auto industry, while Chinese competitors such as BAIC New Energy and BYD are trying to defend their homes.
China overtook the United States as the largest electric car market in 2015 and maintained the title with the help of government subsidies for the purchase of electric cars and incentives for companies to develop them. China is looking to reduce oil consumption, combat air pollution and find new ways to compete with global car giants in Japan, Europe and North America.
Now that the industry has gone through its early nurturing phase, the Chinese government is phasing out subsidies and will stop them altogether by 2020. BNEF expects this to hold down demand slightly over the next two years, but then sales will return to strong growth, reaching 3.5 million vehicles by 2023.
Traditional internal combustion engine cars will gradually give way to electric vehicles until they are completely replaced. Electric vehicles will account for 8 per cent of passenger car sales in China next year, 20 per cent by 2025 and 68 per cent by 2040, according to the BNEF report.