In 2017, China's new energy vehicle (NEV) industry continued to grow rapidly, following the national strategic plan and production and sales targets. According to data from the China Association of Automobile Manufacturers, NEV production and sales reached approximately 800,000 units, with 794,000 units produced and 777,000 sold. This marked a year-on-year increase of 53.8% and 53.3%, respectively. By the end of 2017, NEVs accounted for about 2.7% of the overall automotive market, showing strong growth momentum.
Throughout 2017, the industry was heavily influenced by policy changes, particularly the adjustments in the dual-point and subsidy policies, which kept stakeholders on edge. Smart vehicles and autonomous driving became key focuses, with numerous forums, discussions, and media coverage highlighting the rise of new entrants in the sector. The surge in new car-making forces brought a wave of listings, strategic partnerships, and large-scale funding. As new ideas and models emerged, challenges also arose, leading to some confusion and misdirection. However, the global shift toward sustainable mobility continued to gain traction, and the industry’s progress accelerated, promising a bright future.
Looking ahead to 2018, we examine eight key areas that will shape the development of China’s new energy vehicle industry, offering insights and perspectives for industry professionals and enthusiasts alike.
1. **Production and Sales Expected to Exceed 1 Million Units**
Since 2015, China has consistently set new records in NEV production and sales, surprising both insiders and outsiders. Despite initial skepticism about the government’s commitment, the industry has matured significantly. If production and sales surpass one million units in 2018, it would mark a major milestone, signaling that the industry is capable of supporting large-scale demand. This growth reflects the establishment of a robust industrial chain and increasing consumer confidence.
2. **Pure Electric Strategy Shows Results; Fuel Cells and Plug-in Hybrids Gain Attention**
In 2018, two leading companies—Ningde Times and Beiqi New Energy—are expected to list on the A-share market, confirming the success of China’s long-standing "pure electric" strategy. As the industry matures, resource concentration will shift toward dominant players, helping them scale up and strengthen their positions. At the same time, the limitations of pure electric technology are becoming evident, prompting greater attention to fuel cells, plug-in hybrids, and extended-range vehicles in specific applications.
3. **Charging Infrastructure Enters High-Growth Phase**
The "chicken or egg" dilemma surrounding charging infrastructure has long been a challenge. With the growing number of NEVs, the lack of sufficient charging stations has become more apparent. As of the end of 2017, China had about 450,000 charging piles, with a ratio of 3.8:1. This falls short of the national target of 1:1. Experts predict that as NEV sales reach 2 million annually by 2020, the demand for charging infrastructure will surge. With better planning and execution, the charging industry is poised for rapid expansion.
4. **Shared Mobility Offers Promise, But Faces Challenges**
Shared car services have the potential to improve vehicle utilization and convenience for users. However, operational pressures and business risks are increasing as the industry scales up. While early-stage platforms have undergone consolidation, new models and strategies are emerging to address these challenges. Operators must innovate to maintain efficiency and profitability in an increasingly competitive landscape.
5. **Low-Speed Electric Vehicles See Market Growth, with Policy Shifts Ahead**
Low-speed electric vehicles (LSEVs) offer an affordable alternative to traditional gasoline cars but lack standardized regulations. With subsidies and lower costs, they have gained popularity, especially in lower-tier cities. However, the 2018 subsidy policy changes and mandatory range upgrades may push some subsidy-dependent models out of the market. LSEVs that are independent of subsidies could see renewed growth, particularly in regions with less stringent traffic control.
6. **Taxis and Logistics Vehicles Will Drive Urban Electrification**
While bus electrification has advanced, the next wave of urban electrification is expected to focus on taxis and logistics vehicles. These sectors are ideal for government-led initiatives and urban traffic management. With the support of demonstration cities, electric logistics vehicles are likely to see significant growth due to their large operational scale and efficiency.
7. **Channel Models Continue to Evolve**
The distribution model for NEVs is undergoing transformation. Direct sales, dealerships, and operational models are all being tested. In first- and second-tier cities, direct-operated stores can enhance user experience, while traditional 4S shops may still be preferred in lower-tier markets. Additionally, operators are experimenting with selling vehicles through charging services, targeting both fleet customers and individual buyers.
8. **Used NEV Markets and Battery Recycling Become Key Focus Areas**
As early NEVs begin to age, issues such as battery degradation and used vehicle circulation are becoming more pressing. With the first batch of NEVs entering the market around 2014, many are now reaching the end of their lifecycle. Proper battery recycling and used car trade systems are essential to avoid environmental waste and ensure sustainable development. 2018 presents a critical opportunity to establish these systems and create a circular economy within the industry.
Shenzhen Kaixuanye Technology Co., Ltd. , https://www.icoilne.com