China remains the world’s largest automotive manufacturing country


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China remains the world’s largest automotive manufacturing country and automotive market since 2009. As of 2020, car sales in China was 20.2 million units that accounts for 38.33% of the world’s car sales.

1.3 million electric vehicles (EVs) were sold in China in 2020 on a year-on-year (y/y) growth of 8% and this represented 41% of global EV sales.

The end of China’s lockdown, coupled with the government’s strengthened policy frameworks, triggered a rebound in EV demand, which is now growing by 40% y/y. In December 2020, EV sales reached a historic peak of 248,000 units, up 52% y/y.


The Chinese EV market in 2020 was mainly focused on two vehicles: the made-in-China Tesla Model 3, the market leader in the first half of 2020, and the Hongguang Mini EV from the SGMW joint venture (SAIC, General Motors and Wuling), the market leader in the second half of 2020, which only launched mid-year. If it had not been for the huge success of these two very different EVs, the Chinese EV market would have declined in 2020. These two models represented one in five of all EVs sold in China.

Production of the Hongguang Mini EV has been increased to keep up with demand, particularly from young Chinese urbanites. Other small, more affordable city cars, such as the Baojun E-Series from SGMW and the Ora R1 from Great Wall Motors (GWM) which is touted as the world’s cheapest EV, are also proving very popular.

2020 also saw policy updates that will accelerate the adoption of EVs, even as vehicle price subsidies are phased out.

Beginning 2021, mandatory emission quotas for internal combustion engines (ICE) and EVs are being tightened to help EVs reach 20% of new car sales by 2025; this equates to around 6 million units a year, from 1.3 million in 2020. Automakers in China are obliged to manufacture new energy vehicles (NEVs), including all-electric, plug-in hybrid and hydrogen fuel cell vehicles, to win “points” to make up for a portion of the negative points they incur when they produce internal combustion engine vehicles.

By 2035, EVs are expected to account for 50% of all new car sales, according to the government’s ‘Energy-saving and New Energy Vehicle Technology Roadmap 2.0’. This sets out how China’s automotive industry will be transformed into a largely electric and hybrid industry.

Meanwhile, the charging infrastructure for electric vehicles could fall short of what is needed and the price of EVs might remain too high for both consumers and manufacturers. At present, most car manufacturers are not selling EVs at a profit.


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