China Electric Vehicle Market Trends

Drivers

Governmental Incentives for Electric Vehicles

• To boost the users of electric vehicles, the Chinese government has provided a variety of incentives in the market, which involve tax reduction, favored licensing policies, and some kinds of subsidy. As a result of such advantages, overall, it is cheaper to possess an EV, which enhances the attractiveness of customers. Moreover, local governments support the development of charging infrastructure, so this improvement prompts people to move towards electric vehicles and further enhance the size of the China Electric Vehicle Market.

Growing Concerns for the Environment

• Growing demand in China for electric vehicle is coming from increasing awareness of air pollution and changes in climate. Homeowners are seeking alternative, clean solutions to conventional gasoline-powered automobiles as cities reach stratospheric levels of pollution. It is well in line with the change in consumer preferences-people and companies opting for more environmental-friendly modes of transportation, which is encouraging the growth of the electric vehicle industry.

Restraints

Unavailability of Infrastructure for Charging

• It remains that the charging infrastructure for electric vehicles in China has yet to keep up with demand, which would be more than sufficient based on the huge expansion of the market. Many customers are still unwilling to buy electric vehicles or EVs in fear of lack of access and availability of charging stations, especially in rural environments. This is a factor critical to be taken into consideration about the charging infrastructure build out, since this limitation is strong enough to scare potential buyers off as well as frustrate overall industry-wide growth in EVs.

Exorbitant Battery Prices

• The cost of batteries remains the major lagging factor for electric vehicles in China. Although they have fallen in price significantly over the recent past, they constitute a big fraction of the overall cost of EVs. The high upfront cost required for switching to electric vehicles may be discouraging to both the operators of fleets and customers. Significant further breakthroughs in battery science and production techniques are thus required to bring in the much-needed price reductions and make EVs competitive with conventional cars.