The latest research released by McKinsey & Co. on electric mobility shows both Chinese auto manufacturers and consumers alike are showing increased interest in a future where the Internal Combustion Engine is less prevalent. This trend is evidenced not only by increased sales of electric vehicles in China, but also by incentives offered by the Chinese government to produce and purchase electric vehicles, including tax and registration incentives and increased spending on infrastructure to support electric vehicle adoption.
Chinese OEMs produced 375,000 EVs in 2016, or 43% of the global total. In fact, six out of the ten biggest manufacturers who are committed to an electric vehicle future are from China, including BYD, short for Build Your Dreams, the world’s largest electric vehicle manufacturer by funding. The Chinese government has created an environment favorable to companies like BYD for a variety of reasons, including climate change putting major costal cities like Shanghai at risk of rising sea levels and pollution from vehicles in megacities polluting the air to dangerous levels. The Chinese government is also eager to fill a role ostensibly left vacant by the United States; the role of spearheading the electrification of global transport.
Commuters in China are increasing viewing the situation in a similar light. Tax incentives make it much cheaper to buy new electric vehicles and the new vehicle registration process, requiring the purchase of a license plate and adherence to gas rationing, exempts electric vehicles. Chinese consumers also have a vide variety of EV options from which to choose, totaling around 100 in 2017. Such a highly competitive EV market will continue to drive costs down, making EVs increasingly appealing to Chinese commuters.