China has become a significant force in electric vehicles. Every day, people there buy more and more electric cars. Here are the critical points about China’s booming electric car market:
- Electric vehicle sales in China are over 30% of all car sales
- The Chinese government gave significant subsidies to grow electric car companies
- This helped China’s electric car brands gain an advantage over foreign brands
- But the U.S. and Europe say the subsidies are unfair to their automakers
- Now, they may put tariffs (fees) on Chinese electric cars to level the playing field
Rapid Electric Car Growth
Until recently, electric vehicles were still something for the future. Then China came along and made that future happen much faster. How did this happen?
The main reason is that China’s government provided considerable subsidies to electric car companies. This funding helped electric vehicle makers grow at a rapid pace. It allowed them to:
- Build giant new factories to make electric cars
- Install tons of charging stations across China
- Price their cars at lower costs than gas-powered vehicles
So, in just a few years, electric cars in China went from being rare to very common on the roads. Annual sales rocketed to over 30% of all new vehicles sold.
Unfair Advantage?
While China’s electric car boom is impressive, other countries aren’t too happy about it. The European Union and United States claim the situation is unfair.
They argue that China’s subsidies gave its electric automakers an artificial cost advantage. This lets Chinese brands sell electric cars at meager prices in foreign markets.
As a result, they say companies like Tesla or Volkswagen cannot compete on pricing. The U.S. and Europe are now investigating placing tariffs (fees) on Chinese electric imports to level the playing field.
China’s Counterargument
The Chinese side argues that subsidies were critical early on to get the electric vehicle industry off the ground. Without significant funding, there would be:
- Too few public charging stations
- Not enough overall electric car sales
- There is no way for the industry to grow and survive long-term
China believes its subsidies were an upfront investment. The goal was to make electric vehicles ubiquitous and accepted by the public, and that mission has clearly been accomplished.
Public Attitudes Shift
The most significant change in China has been the public’s embrace of electric cars. A few years ago, they were seen as expensive novelties with short driving ranges.
But showgoers raved about Chinese electric models at the recent Beijing Auto Show. They praised the cars’ affordability, advanced tech features, and driving performance.
“New energy cars have become totally normal and accepted,” said one attendee. “They have good tech, and they’re good to drive.”
High-tech displays and ultra-fast charging were on display. Some new models can get over 300 miles of range from just a 12-minute charge.
The Electric Car Boom Continues
While some think too many Chinese electric car brands exist, most analysts agree the market will keep expanding rapidly. More and more Chinese consumers are making the switch from gas engines.
Charging infrastructure keeps improving across the country’s major cities. And as battery costs drop, electric cars will become even more affordable than combustion models.
The Chinese government may soon start scaling back direct subsidies. However, the overall electric vehicle industry already has unstoppable momentum. China could remain the world’s largest electric car market for years.
Closing Thoughts
China’s aggressive transition to electric vehicles has disrupted the global auto industry. Major countries claim the playing field is uneven due to subsidy policies.
However, Chinese brands have already gained major domestic market share and are rapidly expanding into overseas markets. Balancing fair competition while allowing innovative upstarts to grow will be an ongoing challenge.
How should traditional automakers respond to direct competition from China’s crop of electric vehicle startups? Leave a comment with your thoughts.
