More than 60 percent of China’s 14.4 billion residents live in cities. And these days, the country’s sprawling urban areas are becoming more torn between a desire to ease congestion and to promote green vehicles. Shanghai has become the first to craft a solution: Phase out incentives for plug-in hybrids and extended-range EVs, and go all out to popularize EVs. 
 

U.S. automakers cut sorry figures in China’s traditional vehicle market in 2020. GM lost market share. Ford booked less than half of its 2016 volume. Jeep demand plunged. But in the Chinese market for electric vehicles, Tesla and GM’s light-vehicle joint venture stood out.

After the coronavirus outbreak was brought under control in March, new-vehicle sales swung back – increasing 4.4 percent in April after a 42 percent slump in first quarter. By July, the market had racked up four straight monthly gains. Now, there are signs that the rebound may be about to end.

While overall new-vehicle sales have rebounded three straight months, China’s electric vehicle market has contracted nonstop following a cut in subsidies in June 2019. To jump-start EV demand, the Chinese government this month came up with two proposals: promote battery swaps and encourage automakers to market EVs to rural residents. Neither of the plans is expected to generate meaningful results any time soon.