HAIKOU, China – Increasing sales of electric vehicles put China on track to meet government targets several years earlier, but officials say the industry still needs to work harder on technological breakthroughs.
Chinese consumers bought 1.79 million electric vehicles in the first eight months of 2021, up 194% from the same period last year. This expansion compares to a 14% growth in overall auto sales.
Analysts have attributed the sales growth in part to newer, lower-cost models, many of which have better design and range. By far the best-selling model is the Hongguang Mini EV, a basic compact priced at 28,800 yuan ($ 4,458) and manufactured by a joint venture between General Motors, state-owned SAIC Motor and local manufacturer Wuling Motors. .
âConsumer acceptance of NEVs is increasing,â Daiwa analyst Kelvin Lau said in a client note this week.
Speaking this week at the World New Energy Vehicle Congress in the southern city of Haikou, William Li, chief executive of New York-listed electric vehicle maker Nio, said the industry should be able to reach l The government’s target of having electric vehicles account for 20% of total sales next year, three years ahead of the target.
Last month, electricity accounted for 14.4% of sales.
While applauding the development of the sector, Vice Premier Han Zheng said at the conference, âBy capitalizing on the innovation momentum of enterprises, we must accelerate breakthroughs in basic technologies such as chips used in vehicles and operating systems, and overcoming the fuel cell technology bottleneck. “
“We should (…) take full advantage of multilateral and bilateral mechanisms to further promote cooperation in policy coordination, technological innovation and actively integrate into the global industrial chain,” he said.
Like other automakers around the world, Nio and many of its Chinese peers struggled to get enough microchips to keep production going. Earlier this month, Nio cut its forecast for July-September deliveries to a range of 22,500 to 23,500 vehicles, down from 23,000 to 25,000 previously due to chip shortages.
Reflecting the Deputy Prime Minister’s call for innovation and global expansion, Nio last week presented its first sedan, after three SUV models, and announced that the new vehicle would be the first to be sold in Germany, the largest automotive market in Europe.
CEO Li also told Haikou about the group’s growing network of stations where Nio drivers can swap batteries instead of waiting to charge. It now has 445 such outposts in China, and plans to reach 700 nationally by the end of the year and 4,000 globally by 2025.
The Volkswagen Group, the largest automaker by market share in China, aims to more than double its charging points to more than 13,000 by 2025. It expects to have 6,000 by the end of the year. year.
âOur growing portfolio of electric vehicles and extensive charging infrastructure will support the adoption of electric mobility for customers,â President Herbert Diess told Haikou delegates.
Calling China the first frontier for electric vehicles and other high-tech vehicles, General Motors Chairman Mark Reuss told Congress that more than 40% of the US group’s model launches in China by 2025 will be electric vehicles.
âChina is helping us move towards a fully electric future for our customers, both by [the country] and in the world, “he said.
An executive in GM’s joint venture with SAIC and Wuling told China Daily that the company will start production in Indonesia next year and start selling new models in other overseas markets.
As part of Beijing’s call for a more globally competitive electric vehicle sector, Xiao Yaqing, Minister of Industry and Information Technology, called for sector consolidation at a conference press release last Monday.
âIn the future, electric vehicle companies are expected to get bigger and stronger,â he said. “We have too many EV companies in the market right now. The companies are mostly small and scattered.”
According to the Chinese publication Economic Weekly, the country officially has 479 electric vehicle companies. Of these, 70 were created in the past two years.
Xpeng, a rival of Nio, this week indicated his openness to the call for consolidation.
âIf we need more capacity in a year or twoâ¦ we can consider using M&A as a tool to get more capacity,â Chairman Brian Gu said at a corporate event on Wednesday, Reuters reported.
Many businesses have been kept alive with government grants, both from the national government and local governments, leaving the market oversaturated.
âWith so many brands in the market vying for attention, it becomes more difficult for messaging, positioning and marketing in general to reach its target audience, while increased competition usually also means it There is a cap on the price of products, âsaid Tu Le of the Sino Auto Insights board in Beijing.