The Electric Vehicle Market in China
However, the Chinese government wants to change this paradigm with the onset of the electric vehicle transformation of the transportation industry.
While the Chinese manufacturing industry is extremely strong globally for its low costs and scale, its automobile industry is a nobody in the non-Chinese markets. Cars are still dominated by the western and Japanese car makers. However, the Chinese government wants to change this paradigm with the onset of the electric vehicle transformation of the transportation industry. China is already the largest market for EVs in the world with the government not only giving large subsidies for purchases of EVs but also setting percentage targets for automakers in terms of EV production.
Also, read How China Became The King Of Electric Vehicles
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China is already the largest car market in the world with sales of 28 million vehicles. It will get bigger in the future and the government wants to use this giant market to produce EV champions. Already some major Chinese carmakers such as BYD, Geely etc. are leaders in the EV industry. They are producing higher quality and improved EVs every year as they get an implicit backing from the domestic government in domestic sales of EVs.
China protects its domestic automobile industry by only allowing 50% share of foreign car makers for domestic plants. Also with its unique brand of state capitalism, China ensures that its domestic manufacturers dominate almost all facets of the Chinese economy. As EVs pick up pace around the world with increasing competitiveness from fossil fuel vehicles, the Chinese car makers will be prepared to capture a large chunk of the global market.
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China aims to create a few global champions in the electric vehicle market which can be globally dominant players such as Toyota and GM are in fossil fuel vehicles. However, it remains to be seen if China can manage this as automobiles are a brand conscious market with a high emphasis on quality
One thing is for sure, the Chinese EV makers will own a huge chunk of the 7 million EV sales that is being targeted by China in 2025. This itself will make them global leaders in the EV space even if they sell zero EVs outside of their domestic market.