LONDON--(BUSINESS WIRE)--According to the latest research study released by Technavio, the electric vehicle market in China is expected to reach 1.42 million units in shipment by 2020. This research report titled ‘Electric Vehicle Market in China 2016-2020’, provides an in-depth analysis of market growth in terms of revenue and emerging market trends.
China has emerged as the world’s number 1 auto market (including the passenger car segment) after it overtook the US in 2009. Since then, China has successfully maintained its position, helped by a strong influx of domestic and foreign automakers with their extensive product portfolios. The passenger car market in China faced a few hiccups but stabilized with the help of the Chinese government, which reduced taxes on the purchase of small cars and eventually fueled passenger car sales.
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“China has made incredible progress in controlling vehicle emissions by implementing emission control standards. Significant expansions in China's vehicle markets had raised concerns about environment and public health. Currently, China V is the emission standard followed nationwide and by the end of 2016, China is expected to implement China VI in a bid to further limit emissions,” said Siddharth Jaiswal, one of Technavio’s lead analysts for automotive research.
The implementation of China VI and 2020 CAFC limits will push OEMs to explore alternative propulsion technologies. With increasing popularity of EVs in China and changing perception towards EVs will set the tone for an attractive market for EVs in China. These two influencers will work in tandem to offer a favorable market for EVs in the country.
Some of the other driving forces behind the growth of the electric vehicle market in China are as follows:
- Benefits of EVs outweigh ICE vehicles
- Decline in battery cost per KWh and lithium-ion moving mainstream for EVs
- Viability of battery-swapping technology
Benefits of EVs outweigh ICE vehicles
EVs offer definitive cost benefits, for instance, electric buses incur 80% lower maintenance and operating costs compared to diesel engine buses. One of the major cost benefits of using an EV is fuel cost savings. EVs do not produce any emissions and are more energy efficient compared to conventional ICE-powered vehicles. For instance, in terms of emission and fuel economy, electric buses outclass diesel buses because the former consumes around 25%-30% less energy than the latter and emits 40% less in terms of harmful gases. Also, the ability in EV vehicles to produce high torque noiselessly, helps cut noise pollution and increases the comfort level of passengers. Factors such as cost benefits, reliability, passenger comfort, and environment-friendly operations will therefore push the adoption of EVs in China during the forecast period.
Decline in battery cost per KWh and lithium-ion moving mainstream for EVs
Battery is one of the key components for an EV. Energy stored in the battery is measured in KWh and high storage capacity extends the operating range of EV vehicles. Cost per KWh is the key metric to define the cost of the battery and EV. Reduced cost of battery translates to lesser cost of the EV. To that end, battery manufacturers are working on developing new technologies, anticipated to help them reduce the cost per KWh. Such innovations will rapidly lower the cost of an EV, thereby boosting its demand in China.
China is one of the largest markets for EVs along with the Americas and Japan. Thus, enhanced manufacturing processes, higher productivity, and large volumes of production will immensely help reduce the cost of batteries used in China during the forecast period.
Viability of battery-swapping technology
Battery swapping is considered the eventual solution for zero downtime in EVs. Owing to its quick energizing process of less than four minutes, it is of great use for short-range EVs and for commercial vehicle fleets.
Generally, batteries in conventional EVs are charged inside the vehicle using DC or AC power supplies. Battery-swapping technologies replace drained batteries with freshly charged devices using a robotic arrangement. For example, electric buses in the eastern Chinese harbor city of Qingdao take seven minutes to swap batteries and resume official duties.
Browse related reports:
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- Global Battery Electric Vehicles Market 2015-2019
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