China’s Dominion over the EV Market
The emergence of electric vehicles in the automobile industry has been much talked about since the time Tesla dominated the market with its brilliant lineup of electric vehicles, which range from sports cars to luxury sedans. In the United States itself, Tesla competed with the likes of Nissan and BMW in the EV industry.
Even though other countries were constantly engaged in manufacturing EVs, US dominated the market. But according to reports released in January 2017, China has been deemed as having the largest EV market in the world for the second consecutive year leaving the United States behind by a large number. It has taken over the electric vehicle market by producing and selling close to 540,000 units in 2016, and also predicts to sell around 800,000 units in 2017. Chinese automobile manufacturer BYD auto has been ranked as the best selling plug-in electric cars in the world.
China's Success Formula
The Need for EVs
The question that comes to the fore is how and why did China push the EV industry so vehemently? The answer always lay right before our eyes. The deteriorating quality of air had become a major concern for the country. It has a population of 1.4 billion, which inhabits the cities densely. The ever-increasing need to own a personal transport would have resulted in a deplorable condition of air, if there was no environmentally sustainable alternative.
This compelled the government to subsidize its EV industry in 2009, so that manufacturers are encouraged to produce new energy vehicles with the added benefit of a lesser dependence on oil, and creation of a manufacturing industry for jobs and exports. This helped push the sales of NEVs. China also exempts EVs from acquisition and excise taxes, along with other purchase incentives like the exemption from consumer tax, and a fifty percent reduction in the vehicle registration fee. In China, credits and rebates are driving impressive EV sales, and the government has considered dictating that electric and hybrid cars must make up 12 percent of each manufacturer's sales by 2020.
Electric vehicles are the future of the automobile industry. It is being said that we are entering an Electric Revolution and China is leading us into it, and we are not surprised. EVs have a very low operating cost if compared to fuel run vehicles, and thus provide the benefit of being economically viable. Even though the prices of oil are dropping by the day, EVs are more eco-friendly, which is the need of the hour. Technological advancements are continuously taking place around the world, presenting a conducive environment for the manufacture of EVs. Charging infrastructures are being set up in countries like China, US as well as many developing countries.
A lot of countries are realising the need for new energy vehicles, the most recent being India. India’s Prime Minister Narendra Modi said that the country is ready to switch most, if not all, of its vehicles to battery power by 2030. Currently, Mahindra & Mahindra is the only manufacturer of electric vehicle in India currently, with almost every other automobile group working on a strong EV product line as well. While this is one side of the spectrum, companies like Lightyear Infratech are focusing on the other part, i.e. building a robust charging infrastructure to support the shift towards EV in the best way possible.
But, if the EV industry is looked at from a global level China is sure to lead in the near future too. There is a reason why Elon Musk chose China over India. Big OEMs like Volkswagen, Tesla and many more understand the importance of China in the global economy.