Why China will become the global leader in electric vehicle (EV) market

Last year, China surpassed the U.S. and became the largest plug-in electric car markets in terms of total annual sales, China was therefore ranked as the best-selling plug-in electric passenger car country market in the world in 2015. With strong government support and relevant encouraging policies, China is on track to become the global leader in electric vehicle (EV) market. Below are the main reasons:-

Restriction rule based on odd and even license

The Odd-even license plate rule is a traffic restriction policy which was first released in Beijing by the Beijing Transport Administration Commission before the 2008 Olympic Games targeting at securing better weather and traffic condition during the Olympic Games. It regulates that private vehicles with last digit number(1,3,5,7,9) on license plate odd can only travel on public roads on odd days of each month (1st,3rd,5th,7th…),and vehicle with last digit on license plate (2,4,6,8,0) even can only travel on public roads on even days of each month (2nd,4th,6th, 8th…). Since then, the traffic restriction rules has been extended to almost all motor vehicles with few exceptions, also it has been gradually adopted by more cities and provinces to reduce traffic jam. Since the restriction rules does not apply to electric vehicles, people have strong incentives to purchase electric vehicles if the price is still acceptable.

New vehicle registration lottery

With rapid urbanization in China’s major cities, traffic congestion is a commonly found in urban areas in particular during rush hours and holidays. Another major strategy that Chinese cities are taking is the ‘new vehicle registration lottery’ which awards only a small part of new car buyers through a lottery system. For example, Beijing’s new car lottery normally turns away 10 out of 11 applicants who want to buy a new car in Beijing. Because cities usually will allow the electric vehicle buyers to past the lottery or reserve some quota for them (china.org.cn 2011), those applicants who are unwilling to wait may tend to buy electric vehicles compared to motor vehicles.

Electric car subsidies

China aims to put five million “new-energy” vehicles on the road by 2020. To realize this long-term goal, Chinese government offers pure electric vehicles and plug-in hybrid electric vehicles buyers subsidies to boost the electric car market. The current subsidies per car is up to 60,000 yuan (about $9,800) though the level of subsidies vary from year to year depending on the government’s updated policy (csmonitor.com 2014).
Beijing traffic jam
Traffic jam in Beijing

List of reference

csmonitor.com 2014 Electric cars: China exends EV subsidies beyond 2015 [online] accessed on 28th Mar 2016, link: http://www.csmonitor.com/Business/In-Gear/2014/0213/Electric-cars-China-exends-EV-subsidies-beyond-2015

china.org.cn 2011 Car purchase lottery starts in Beijing [online] accessed on 28th Mar 2016, link: http://www.china.org.cn/business/2011-01/27/content_21826885.htm

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