At a time when electric vehicles are increasingly being hailed as the best alternative to internal combustion vehicles to limit CO2 emissions, China continues to encourage high-quality new energy vehicle (NEV) development by advancing the integration of technologies such as electrification and smart networking.

With the competitive NEV sector gaining speed, China's hi -tech giants have accelerated their efforts to join the race. Alibaba, Xiaomi and others exhibited their new NEV models designed in partnership with industry players at the Shanghai Motor Show in April. In China, sales of NEVs powered by electric, hybrid and hydrogen fuel cell energy have been surging. In the first four months of this year, the sector registered 732,000 units in sales, some 250 percent year-on-year jump, amid a stable recovery in market demand, according to data from the China Association of Automobile Manufacturers (CAAM). In April alone, sales rose to 206,000 units, up 180 percent year on year.

Market positioning

The successful deployment of 5G and the big data capabilities of tech-giants have allowed smooth development of smart cars and autonomous vehicles. Besides Xiaomi and Alibaba, the world's leading drone manufacturer DJI has also set its foot in China's electric car market, the largest in the world.

The tech giant Huawei has reached cooperation agreements with automakers Chang'an Automobile and BluePark New Energy Technology of BAIC Group. With its strengths in technology, Huawei aims to become a leading supplier of digital automotive components to enable OEMs to build better vehicles.

The tech giants are not the only ones to vie for a piece of this high-growth sector. Established battery maker NIO has also ventured into the vehicle manufacturing, selling 31,430 units in 2019, an increase of 111 percent year on year.

The craze to join the sector is spurred by the great market potential and favorable policies. In 2020, the Chinese automotive industry contracted by 1.9 percent with 25.31 million vehicles sold, but the sales of NEVs rose by 11 percent. According to CAAM, with sales of 1.37 million units, China accounted for 43 percent of the global sales of 3.24 million, ranking number one globally for the sixth consecutive year. The government has strategized an NEV plan for the period 2021-2035 with a target of reaching about 20 percent by 2025.

The plan, released by the State Council in November 2020, emphasizes technological innovation and charging infrastructure, aiming to boost the high-quality development of NEVs. China launched its first NEV initiative in 2009. Sound and stable government policies such as a clear roadmap in addition to the 2012-2020 plan and policies on subsidies and tax exemptions are essential for the long-term development of the sector and the consolidation of China's grip in the field.

China has made remarkable progress in this area in the last decade. The country surpassed the U.S. in 2015 as the largest market for such vehicles. According to TrendForce, a consulting company, the sales of domestic brands Wuling Hongguang and BYD ranked second and third worldwide, just behind Tesla in the first quarter.

In addition, China continues its efforts to reduce CO2 emissions, aiming achieve CO2 emissions peak by 2030 and carbon neutrality by 2060. China is committed to a green, low-carbon and sustainable development path and wishes to work with the international community to accelerate innovations in NEV technologies as well as the development of related sectors, Chinese President Xi Jinping said in a congratulatory message sent to the 2019 World NEV Congress held in Boao, Hainan Province.

Performance improvement

In recent years, China has been striving to make breakthroughs in related sectors to push the boundaries of the NEV segment. According to Xiao Yaqing, Minister of Industry and Informatization, the three main NEV technologies (batteries, motors and electric control systems) have been actively innovated and achieved remarkable results with batteries being the key element in this type of vehicle. In 2020, CATL, a battery manufacturer, accounted for 24.82 percent of the global market, occupying the top position in the world for four consecutive years.

This trend is expected to grow along with the development of technology, including the charging and battery exchange network. One of the key requirements for the growth of electric mobility is the availability and ease of use of charging infrastructure. In 2020, the development of charging stations, an important part of new infrastructure, was included for the first time in the government's Work Report. As of December 2020, the number of public charging stations in China was 807,000 units, a 56 percent year-on-year increment. In addition, the first national standard for battery swapping will be implemented in November.

However, battery recycling remains a big challenge. "China does not have a complete industrial recycling chain. The standards for batteries are not uniform; the technology involved is not mature; and the recycling costs are high," said Li Yan, professor with the Department of Environment at the Renmin University of China, adding that the recycling system requires cooperation on policies, techniques, subsidies and monitoring.

In the eyes of consumers, NEVs are far from perfect. "Despite the increasing number of charging stations, it is not easy to find one on the street, let alone in residential areas," Beijing resident Lu Yubing told ChinAfrica. Slow charging is another problem. "In any case, the trend of NEVs is here. I am convinced that our country and companies will find solutions," she added. 

(Print Edition Title: En Route to Green Mobility) 

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