The global electric car market is pretty straightforward: China is racing ahead, and everyone else is still getting off the starting line.
China accounts for half the world’s production and sales of electric cars, according to the research non-profit International Council on Clean Transportation (ICCT). The country accounted for 595,000 of the 1.1 million electric vehicles (EVs) produced globally last year, and purchased almost as many. That’s more than Europe, Japan, and the United States combined (although many of those are premium cars such as Tesla’s Model S and X).
The size of China’s vehicle market, now larger than the US, is one reason for the surge. Its government is the other. “Policy is the underlying driver for electric vehicle growth around the world,” the International Council on Clean Transportation reports in a May white paper on the subject. And no one has committed to EVs like China.
The US is encouraging EVs by funding basic research, general pollution and fuel efficiency standards, and a $7,500 tax credit for EVs. By contrast, China has national policies to build the EV ecosystem at every level. The country’s financial incentives to buy EVs, encourage manufacturing, and build out charging infrastructure are the most robust in the world, the ICCT says.
Between 2009 and 2015, China spent ¥59.1 billion yuan ($9.2 billion) financing the purchase of “New Energy Vehicles,” its designation for battery and plug-in hybrid electric vehicles. It’s likely spent another ¥83 billion yuan ($13 billion) or so in the last two years, Bloomberg reports. That’s on top of China’s aggressive credit scheme 1 for new energy vehicles, modeled after California’s California’s Zero Emission Vehicle program, with impressive EV targets (pdf), of 2 million in sales by 2020. The Chinese government has a battery supply-chain program with significant incentives for battery manufacturers linked to production in China.
To make sure that’s all “Made in China,” the government has tied all of this to domestic production. As the US lurches toward a new nationalism, the next evolution of the mass-produced automobile, once perfected in the US, is not being led by America’s major automakers. As the ICCT notes on China’s EV incentives, “there are no such policies in place elsewhere.”