For electric vehicle makers, China dominates
China is the world’s major market for electric vehicles, according to a new report from the Bloomberg New Energy Fund (BNEF) – and it’s forecast to stay that way. While the world’s other two major powers, Europe and the US, both stand to make gains on the number of electric vehicles on their roads, China looks set to stay in top spot.
This forecast is a result, in part, of government action designed to spur adoption – such as the introduction of subsidised purchases. And this, in turn, is based on at least two factors: first, China wants to be a leader in tomorrow’s tech, realising that it will bring numerous benefits regarding efficiency, performance, etc. And second, the country has a long-standing pollution problem. As China’s development continues, clouds of smog aren’t a great look.
China surpassed the US as a major electrification market in 2015 – since then, it’s not looked back. As the government phases out subsidies, growth may slow for a couple of years – but by 2023, BNEF predicts strong growth will have resumed, and sales will hit 3.5 million.
The country has recently written a number of new rules into law that promote the production of greener cars. Beijing realises that there is yet another benefit it could recoup from spurring the industry further: China could become a champion of tomorrow’s auto industry, stealing business from Japan, Europe, and North America.
Here’s a rough timeline to the evolution of electric vehicle sales in China going forward: next year, BNEF says that electric vehicle sales will make up 8% of the total. By 2025, that figure has jumped to 20%. And by 2040, an impressive 68% of all new vehicle purchases in China will be electric. Given that this year, production of electric vehicles is set to outpace the government’s targets, China isn’t waiting for the future to come to it – it’s going out and making it.
Dominion holds a number of companies involved in the trend towards electrification, such as Chinese electric vehicle specialist BYD and North American auto parts maker Aptiv, in its Global Trends Managed fund.
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