With nearly 1.2 million global electric vehicles (EV) sales in 2019, China is determined to grow its domestic EV industry in the coming years, expecting approximately 25% of all domestic car sales to be EVs by 2025.
In 2019, EV sales by Chinese manufacturers accounted for more than half of all global electric vehicle sales. According to the China Association of Automobile Manufacturers, EV sales are expected to reach 1.1 million by the end of this fiscal year despite the setbacks caused by the coronavirus pandemic.
As a result of the unparalleled economies of scale enjoyed by local manufacturers, China’s EVs have the potential to compete with traditional cars on a price basis. They are also expected to draw appeal from consumers who are concerned about climate change.
One of the main factors that will determine the success of China’s bid to capture the EV market is the cost of EV batteries. While they currently cost $160 per kWh, this price is set to drop below $100 per kWh by 2023.
Despite China’s dominance in the global EV market, its local manufacturers still trail Tesla’s sales locally. Currently, the Tesla Model 3 leads sales in China with 70,951 from the beginning of 2020 through August. Given the above trend, however, Chinese manufacturers are not far behind in the race for local dominance.
