CHINA ELECTRIC VEHICLE MARKET

KEY FINDINGS

1. In 2020, EV sales increased in China by 12% to 1.4 Million units, missing the stipulated quota of 8% of annual sales by almost 0.5 Million units
2. BEVs comprised 78% of total EV sales in 2020.As of Mar 2021, 212 BEV models are available for sale in China, as compared to 41 in Europe and 22 in US. Tesla Model 3 sold 140,000 in 2020 and was the market leader
3. SGMW was the market leader in 2020 with ~15% market share, followed by BYD with ~14% share and Tesla had 11%
4. To arrest decline in EV sales post withdrawal of subsidy, Chinese OEMs launched lucrative schemes. For example, BAIC New Energy EC5 introduced a “double exemption policy”, namely interest-free loans and no down payment for car purchases
5. Electric buses comprised 83% of all electric commercial vehicles sold in 2020. Yutong is the market leader with ~26% market share
6. Total deployed capacity in terms of Li-ion batteries across EVs (including commercial vehicles) was 81 GWh in 2019
7. CATL is the market leader in EV batteries with more than 53% market share, followed by BYD 19% share. CATL has more than 62% market share of installed battery capacity in electric buses in 2020.

INTRODUCTION

China is world`s biggest automotive market, by volume. In 2020, the sales of automobiles were 25.3 Million units a drop of 1.9% mainly due to Covid. This was the third year with negative YoY growth, respectively.

Electric vehicles however grew by 10.9% year with 1.4 Million units which showcased a growing demand. Due to Covid, the subsidies were extended for 2 more years with a 10% drop every year. Subsidies were the driving factor in China for high electric vehicle sales

To know more about Global Electric Car Market, read our report

CHINA ELECTRIC VEHICLE MARKET DYNAMICS

China after spending $3 Billion in subsidy expenditure in 2018 has raised technical threshold for the same. For instance, an EV purchased by a commercial fleet user would be given subsidies only if its aggregated driving range exceeded 20,000km per annum.

Additionally, automakers are required to build platforms for monitoring operational status of vehicles sold and connect them with a national regulation platform that was launched in 2016.

 As the EV market slowed down in H2-2019, due to subsidy cut, finally dragging down full year- 2019 EV volumes, the EV startups were most affected. For example, WEY had set itself a target of 100,000 units EV sales but ended up selling just 17% of that.

Xiaomi announces its foray into electric vehicle (EV) sphere in March 2021, the brand is planning to invest about $10 billion over the next decade in manufacturing EVs.

BYD Co Ltd, China's largest electric vehicle (EV) manufacturer, has announced that it will no longer develop combustion engine vehicles and will instead focus on pure electric and heavily electrified plug-in hybrid vehicles.

In the future, BYD will concentrate on pure electric and plug-in hybrid vehicles.

Smaller, more efficient engines will continue to be employed in plug-in hybrid cars, therefore BYD will not fully quit producing gasoline engines.

Nio is notable for allowing customers to choose between purchasing the battery pack for their electric vehicle entirely or paying a regular fee that enables them access to the manufacturer's battery switching stations.

This is known as battery-as-a-service (BaaS), and up until now, people who chose it could not opt out by purchasing the battery.

This has since changed in China, as Nao EV customers who regretted selecting for BaaS requested that the manufacturer enable them to purchase the battery afterwards, therefore eliminating the need for battery switching.

Nao issued an official statement in China announcing the change and stating that the group of owners interested in purchasing the pack was still small.

CHINA ELECTRIC VEHICLE MARKET THE SUBSIDY WITHDRAWAL EFFECT

Starting 12^th June 2019, when new subsidy rules came into effect, sales of A00 compact EVs dropped sharply pulling down the overall EV volumes by a steep ~50% in July.

It was only post Q3 2019 when almost all car companies upgraded their compact EVs to >250km range that the EV sales started rebounding. In Nov 2019, sales grew ~20% (MOM) and in December it grew by ~70% (MOM).

However in 2020, A00 held more than 20% of the market share. Tier 2 and Tier 3 cities prefer city EVs while Tier 1 cities prefer bigger EVs. Due to Covid , subsidies are extended for 2 more years. Money was also put in to improve infrastructure across the country.

For the first half of 2021, X Peng set up two sales service subsidiaries in Hainan province, which are located in Haikou and Sanya.

Both of them are wholly held by Xiaoping Automobile Sales Co., Ltd., and are allowed to work on car rental service, wholesale of auto parts, roadside assistance service, distribution of used cars, and sale of new energy vehicles and battery swapping facilities.

Full NEV subsidy programmed phase-out postponed from end of 2020 to end of 2022 (from April 2020, NEV subsidy reduction of 10% from 2019-2020, and an additional 20% reduction in 2021).

                                      China electric vehicle market by month

CHINA ELECTRIC VEHICLEMARKET SEGMENTATION

CHINA ELECTRIC VEHICLE MARKET SIZE AND FORECAST

China electric vehicle market is estimated at $49 Billion in 2020. The Chinese EV battery market alone is estimated at $10.4 Billion. To know more about it read our report EV Battery Market in China  In 2020, SAIC-GM(2nd biggest EV player in China) will launched 10 new models, including 2 BEVs. By 2025, SAIC-GM will invest $4.5 Billion to launch more than 9 new energy models.  BAIC BJEV has developed three EV platforms, BE11, BE22 and BE22, which will underpin more than 30 vehicles by 2025.

CHINA ELECTRIC VEHICLE MARKET RECENT TRENDS

• BYD Company Limited sets up a wholly-owned battery subsidiary in Yancheng, Jiangsu province.
• BYD to supply Tesla with its ultra-safe “Blade Battery” it incurs increase of 50% of space utilization as compared to conventional LFP block batteries.
  • The Blade Battery is a lithium iron phosphate (LFP) battery, which is designed to mitigate concerns about battery safety in electric vehicles.
  • The designed structure consists of singular cells that are arranged together in an array and then inserted into a battery pack .
• Chinese power battery giant CATL launches its first-generation sodium-ion battery on , the product aims to provide all-new solutions for the development of clean energy and electrified transportation, and contribute to the achievement of carbon neutrality.
  • The newly-launched battery is compatible and complementary with lithium-ion batteries and has advantages in low-temperature performance, fast-charging, and environmental adaptability.
• SAIC Z-ONE, the software arm of SAIC Motor announces its strategic partnership with Chinese automotive SoC (system-on-chip).
  • Their core R&D capabilities and resources will be responsible to develop roadmap for chips and complete vehicle electrical architecture pivoting on SAIC Z-ONE's Galaxy Full-stack Solution 3.0 digital platform.
  • The company will co-explore and develop the operating systems compatible with the Galaxy Full-stack Solution 3.0 and vigorously promote the replacement of imported chips with locally-made ones, and explore the joint R&D of customized chips and relevant business cooperation models.

COVID IMPACT ON CHINA ELECTRIC VEHICLE MARKET

As the pandemic began to surge in early 2020, there was a general expectation that electric car markets would likely be more resilient than the general automotive sector although a drop in electric car sales was generally expected nonetheless which may also stimulate future electric vehicle demand especially for large electric cars with better performance.

China, among one of the earliest regions affected by COVID-19 took a great part in the global electric vehicle market and attracts growing attention on its post-pandemic trends in the electric vehicle industry.

Since electric vehicle development was critical to achieve the sustainable goals, the hit of COVID-19 struck the market and brought challenges to the whole industry.

The social distancing trend after pandemic challenged traditional EV distribution channels with dealers, pushing automakers to develop innovative online selling channels.

The travel restrictions caused by COVID-19 have interrupted electric vehicle material supplies that relied on imports, hereby accelerating domestic substitute exploitation and inventory improvement for critical parts.

Additionally, massive lockdowns for controlling COVID-19 have disrupted productions and operations, which tended to expel small brands out of the competitive market, concentrating China's electric vehicle industry to the leading brands.

CHINA ELECTRIC VEHICLE BATTERY MARKET

China comprised 50% of global EV sales volume in 2016, 2017, 2018 and 2019 and more than 70% of them were BEVs in 2016, 2017, 2018.In 2020, it decreased to 40% of the global share. In 2020, the BEV share went up to 78%. In the commercial vehicle segment, buses comprised 81% of 100k units electric commercial vehicle market, with average battery capacity of 233kWh, pushing China`s installed power battery capacity volume to 84GWh in 2020

China is pushing hard for swappable batteries for electric cars (EVs) as a supplement to conventional vehicle charging, with the government backing multiple companies working on the technology.

Rather than putting the car into a charging station, battery switching allows drivers to easily exchange depleted packs with fully charged ones. Swapping batteries could help reduce the load on power networks as millions of vehicles charge up, but experts warn that it will only take off if batteries become industry-wide standardized.

The world's largest battery manufacturer, CATL (Contemporary Ampere Technology Company Ltd) of Hinged, was creating switching services not just for China, but also for global markets.

CHINA ELECTRIC VEHICLE MARKET RECENT PARTNERSHIPS

BYD, a Chinese electric vehicle (EV) manufacturer, has inked a strategic collaboration deal with Shell, under which the two companies would collaborate on projects in both China and Europe.

BYD also stated that the two businesses would form a cooperative venture in China to develop a vehicle charging network. The network would start with more than 10,000 electric vehicle charging stations in Shenzhen, with plans to expand to other cities.

The vast electric vehicle market in China is where Chinese internet giant Tencent hopes to provide technology that will assist global automakers looking to sell cars there. Tencent and BMW have already collaborated on projects.

The comprehensive cloud package, which is also accessible to domestic automakers, can handle all technical facets of an electric vehicle. These features range from providing access to Tencent's social networking and map apps to data storage that is geared for training autonomous driving systems.

Given that Tencent controls several of the biggest Chinese online entertainment apps, the user interface might be a selling factor for drivers in China.

CHINA ELECTRIC VEHICLE MARKETCOMPETITIVE LANDSCAPE

The Chinese major, SAIC has plans to start EV manufacturing in India and Thailand. Since SAIC is well positioned to absorb the higher cost and low margin of EVs presently, we believe it can boost EV uptake in both India and ASEAN region. BYD(18% market share in EV passenger cars) declined by 4% YOY to 219,000 units  in 2019. It had 9% share of Electric bus market in China.

• MoU framework agreement between Greely holding group and Renault Group aims to create an innovative cooperation.
  • They will jointly introduce Renault-branded hybrid vehicles based on Greely's technologies and industrial footprint while the French company will be responsible for branding strategy, channel and service development, defining appropriate customer journey .
• Chinese EV startup NIO and Shanghai Linsang Economic Development (Group) Co., Ltd. (Linsang Group ,entered into a strategic partnership on August 2021 to co-work on promoting the development of local new energy vehicle (NEV) industry.
• Guangdong Hongbin Xiaomi Technology Development Co., Ltd. (called “Zhuhai Xiaomi” for short) a new company launched in 2021 , involves a registered capital of 1 million yuan ($154.7 million) and is wholly owned by Xiaomi Technology Co., Ltd. It involves a line of business covering sale of NEVs, import & export of technologies and goods, information system integration service, software development, and manufacturing of communications facilities.

THISCHINA ELECTRIC VEHICLE MARKETREPORT WILL ANSWER FOLLOWING QUESTIONS

1. China Electric Vehicle Market size and Forecast, by region, by application
2. Average B-2-B price for China Electric Vehicle Market, by region, per user
3. Technology trends and related opportunity for new China Electric Vehicle Market tech suppliers
4. China Electric Vehicle Market share of leading vendors, by region,
5.  Coronavirus impact on China Electric Vehicle Market earnings