- 3 min
The future of the electric vehicle is being shaped in China
How do you explain the slowdown on the Chinese market?
After 26 years of non-stop growth, the Chinese market decreased by -4.2% in 2018. Cyclical factors seem to be behind this slight downturn: an economic slowdown, restoration of the standard tax rate at the time of buying a vehicle and also the significant reduction in loans granted by Peer to Peer type platforms, well established in small towns.
Nonetheless, China is still by far the world’s biggest automotive market. One new car out of three is purchased in China, i.e. 28 million in 2018.
So the outlook is sunny weather for manufacturers?
Yes, for two main reasons: firstly, a Chinese public still substantially under-equipped and, above all, the Chinese government’s decision in 2015, through its strategic plan Made in China 2025, to prioritise the electric vehicle industry. From that point on, in just a few years China has become world leader for the whole value chain with a stranglehold on raw materials, technologies, patents and the adoption of exacting standards which could become a reference at world level. With 1,256,000 units in 2018, China has sold close to 80% of the electric vehicles marketed worldwide!
And it doesn’t end there since they aim to market close to 7 million electric vehicles per year in 2025. This way, it is estimated that the Chinese stock of electric vehicles could reach 80 million units by around 2030.
The future of the electric car is indisputably unfolding in China. Car manufacturers from around the world have shown they understood it by making huge investments there.
How is the financing market doing in China?
Compared with the USA or Europe, penetration of the car financing market is still low at 43%. It is however gradually becoming more widespread, especially with the younger generations
Consumer habits are also changing, in favour of mobility offers (rental or Uber type), where the concept of ownership is less important than the use that can be made of it.