In China, the number of new electric car registrations reached...

In China, the number of new electric car registrations reached 8.1 million in 2023, increasing by 35% relative to 2022. Increasing electric car sales were the main reason for growth in the overall car market, which contracted by 8% for conventional (internal combustion engine) cars but grew by 5% in total, indicating that electric car sales are continuing to perform as the market matures. The year 2023 was the first in which China’s New Energy Vehicle (NEV)3 industry ran without support from national subsidies for EV purchases, which have facilitated expansion of the market for more than a decade. Tax exemption for EV purchases and non-financial support remain in place, after an extension, as the automotive industry is seen as one of the key drivers of economic growth. Some province-led support and investment also remains in place and plays an important role in China’s EV landscape. As the market matures, the industry is entering a phase marked by increased price competition and consolidation. In addition, China exported over 4 million cars in 2023, making it the largest auto exporter in the world, among which 1.2 million were EVs. This is markedly more than the previous year – car exports were almost 65% higher than in 2022, and electric car exports were 80% higher. The main export markets for these vehicles were Europe and countries in the Asia Pacific region, such as Thailand and Australia.

Despite all the negativity, EV sales are propping up the Chinese market when the ICE market is contracting.