SHANGHAI -- The Chinese market for full electric vehicles and plug-in hybrids -- some 12 years old now -- expanded 120 percent to nearly 3 million cars and light trucks in the first 11 months of the year.
But it is way too early to call winners and losers as the explosive market emerges from infancy into adolescence while so far drawing limited participation from global brands.
China’s EV market took root in 2009 with the support of Beijing’s generous subsidy program.
Despite exponential growth, the market is still young and its potential will be tested in the post-subsidy era.
Even with the latest cut in June 2019, the central government’s subsidies remain substantial: up to 18,000 yuan ($2,826) for an electric passenger vehicle or 6,800 yuan for a plug-in hybrid.
On top of subsidies from the central government’s coffer, buyers of electrified vehicles also enjoy other forms of incentives from local municipalities.
In Shanghai, China’s largest city, while buyers of gasoline cars have to pay around 90,000 yuan for a license plate, new EV and plug-in hybrid owners are granted free license plates.
It is difficult to predict how fast the market will continue to grow.
Beijing is set to discontinue the incentive program at the end of 2022 and Shanghai’s city government is considering an end to free license plates for plug-in hybrid vehicle buyers.
In addition, most of China’s EV makers are relatively young and didn’t exist until 2014. It is hard to tell whether these companies will still be around in five years.
Profit and viability seem assured for 18-year-old Tesla Inc. -- its Shanghai plant shipped more than 413,000 vehicles through November. But three leading Chinese EV startups – Xpeng, Nio and Li Auto – remain unprofitable with 2021 deliveries falling short of 82,000 each.