China’s EV Revolution: Policy Insights and Market Growth
                     China’s EV Revolution: Policy 
Insights and Market Growth
The global automotive industry is undergoing a significant transformation towards electric 
vehicles (EVs). This shift is driven by increasing environmental concerns, technological 
advancements, and supportive electric vehicle policies by governments. 
In this regard, global electric car sales surged to nearly 14 million in 2023, 
with China, Europe, and the United States accounting for 95% of these sales. The shift 
towards electric vehicles (EVs) encompasses passenger cars and extends to commercial 
vehicles, public transport, and even two and three-wheelers, especially in emerging markets.
How is China Shaping the Global EV Market?
China has emerged as a leader in the EV market, particularly in the commercial and 
passenger vehicle segments. In 2023, the China EV market accounted for nearly 60% of 
global electric car sales, with over 8 million new electric car registrations. The reason for 
this dominance is aggressive government policies, significant investments in infrastructure, 
and the presence of major EV manufacturers like BYD, NIO, and Xpeng.
Moreover, China’s electrification efforts are not restricted to private ownership alone; the 
country is also integrating electric vehicles into its commercial fleet.
Insights into China’s Commercial EV Market Growth
In 2023, China saw robust sales of over 330,000 commercial electric vehicles, especially 
achieving significant success in the final month of the year. 
Explore the factors driving the sales of commercial electric vehicles in China —
 December 2023 Highlights:
 Over 5,600 electric or fuel cell medium- and heavy-duty trucks were sold
 These sales represented a remarkable 10% of the total truck market for that 
month
 Light commercial EVs captured 16% of the market share in December
What policies drive the rapid growth of commercial EVs in China?
Commercial EV growth is propelled by three factors: government initiatives, license plate 
restrictions, and solutions to EV challenges. Consequently, these elements foster strong 
growth in the EV sector.
 China is extending and optimizing new energy vehicles (NEV) purchase tax 
exemptions. From 2024 to 2025, NEVs will be exempt from taxes up to 30,000 RMB, 
and from 2026 to 2027, the tax exemption will be reduced to 15,000 RMB. This 
measure aims to reduce costs and stimulate the adoption of electric 
vehicles. (Source)
 China’s New Infrastructure Plan aims to boost digital infrastructure, 
including 5G, AI, and IoT, promoting private and foreign investment. This $1.4 
trillion plan includes constructing charging stations to address range anxiety, 
boosting EV adoption, developing China’s EV Charging Infrastructure and supporting
the electrification of China’s commercial fleet.
 The NEV quota system requires automakers in China to meet annual production 
targets for new energy vehicles, increasing from 14% in 2021 to 18% by 2023. 
This dual credit policy incentivizes investment in EV technology to avoid penalties 
and promotes the growth of the EV market.
 In Shanghai, the government has implemented policies to promote EVs by offering 
free license plates to battery electric vehicle (BEV) owners. The policy aims to 
promote the uptake of environmentally friendly vehicles while addressing urban traffic
management. Starting from 2024, individuals must have contributed to social security
payments for at least 36 months to be eligible for a complimentary EV license plate.
Looking forward, the government has set ambitious emission reduction targets, including a 
mandate that 20% of all new vehicle sales be new energy vehicles (NEVs) by 2025. 
Although national subsidies for EV purchases were phased out in 2023, tax exemptions and 
provincial incentives continue to bolster market expansion. These measures are crucial in 
increasing the penetration rate of EVs in China.
Impact of EV Policies on China’s Commercial Vehicle Market
The EV policies have significantly influenced the commercial vehicle market in China, fueling
a surge in the production and sales of electric commercial vehicles. These favorable policies 
have also spurred the growth of numerous EV startups, reinforcing China’s leadership in EV 
technology. To support this rise in EV adoption, the nation is making substantial progress in 
developing its electric infrastructure.
Strategic Deployment: China’s Approach to EV Charging Coverage
China has made vital strides in developing its electric vehicle (EV) charging infrastructure, 
solidifying its position as a global leader. By the end of 2023, China accounted for 
approximately 70% of global public light-duty vehicle (LDV) charging stations, with the 
number of charging points expanding rapidly.
In 2023 alone, China’s public charging infrastructure grew by over 40%, with fast chargers 
comprising more than 35% of this expansion. The country at present boasts over 2 
million public charging points, the highest number globally. Moreover, these stations are 
strategically distributed across both urban and rural areas, ensuring comprehensive 
coverage nationwide.
Innovations in Charging Technology and Infrastructure
Innovations in charging technology are pivotal in China’s EV infrastructure development and 
are increasingly prevalent. China currently boasts one of the largest shares of fast chargers 
globally. By 2035, projections indicate that China will host approximately 7.5 million public 
fast chargers, marking a nearly sixfold increase from the 2023 figures.
Let’s explore how regions in China are embracing public transport electrification —
Comprehensive Electrification of Buses in China
 Number of Electric Buses in Operation and their Coverage:
 As of 2022, China had over 750,000 electric buses in operation, constituting 
more than 95% of the global electric bus stock. Major cities 
like Beijing and Shenzhen have extensive electric bus networks.
 Benefits of Electric Buses for Urban Mobility and Air Quality:
 Electric buses reduce urban air pollution, enhance passenger comfort and 
lower noise pollution. They are also more energy-efficient and have lower 
operating costs compared to diesel buses.
Achievements in Chinese Cities & Regions
 Examples from Key Urban Hubs:
 Beijing: Beijing, like many cities in China, benefited from early policy support 
and incentives for electrifying public transport, resulting in a significant 
deployment of electric buses before 2019. However, the end of purchase 
subsidies for BEV and PHEV buses in 2022 impacted the demand for electric 
buses in the city.
 Shenzhen: Shenzhen pioneered the electrification of its public transport fleet,
achieving full electrification of its buses by 2017. Leveraging strong local 
policies and subsidies, Shenzhen’s buses have helped significantly reduce 
urban air pollution and greenhouse gas emissions, setting a model for other 
cities in China and globally.
What are the Economic Benefits of Electrifying Commercial Vehicles?
China’s commercial EV sector has had a profound impact on its economy. In 2023, sales of 
electric light commercial vehicles (LCVs) in China surpassed 240,000 units, underscoring
robust growth in this segment. Moreover, China accounted for 70% of global electric truck 
sales, solidifying its leadership in the electric heavy-duty vehicle market. The cost 
competitiveness of Chinese original equipment manufacturers (OEMs), bolstered by a 
diverse range of models across various segments, has contributed to their global market 
dominance.
Leading this charge are prominent companies such as BYD and SAIC-GM-Wuling. BYD, 
headquartered in Shenzhen, ranks among the world’s top sellers of new energy vehicles 
(NEVs) and boasts strong vertical integration, including robust battery manufacturing 
capabilities. On the other hand, SAIC-GM-Wuling, a joint venture with General Motors, has 
gained widespread popularity in China and other markets due to its affordable and practical 
vehicle offerings.
Environmental Impact of Reduced Emissions in China 
 Contribution to China’s Climate Goals:
 Electrifying commercial vehicles is crucial for China’s strategy to reduce 
greenhouse gas emissions, aligning with its commitment to peak carbon 
emissions by 2030 and achieve carbon neutrality by 2060.
 Battery electric vehicles in China exhibit 20%, 30%, and 40% lower emissions
compared to plug-in hybrid electric vehicles, hybrid electric vehicles, and 
internal combustion engine vehicles, respectively. This crucial reduction 
contributes notably to greenhouse gas emissions reduction. Moreover, the 
early deployment of electric buses in China—65% of which were deployed 
before 2019—has played a crucial role in reducing urban air pollution and 
greenhouse gas emissions.
What are the challenges in scaling electric vehicle infrastructure?
 Infrastructure Needs: Scaling electric vehicle infrastructure poses a significant 
challenge due to the need for a substantial increase in charging infrastructure. This 
includes expanding beyond depot charging to establish charging stations along main 
transit routes to support long-distance trucking.
 Policy and Planning: Effective policy support, meticulous planning, and coordination
are crucial to guaranteeing a secure, affordable, and low-emission electricity supply, 
while also avoiding excessive strain on local grids.
Future Prospects for China’s EV Industry
 Sales Growth:
The sales of electric trucks are gaining momentum, with a 35% increase in 2023 compared 
to 2022. China leads the market, accounting for 70% of global sales in 2023, although this is 
a decrease from 85% in 2022.
 Global Leadership:
China is expected to maintain its leadership position in electrifying light-duty vehicles (LDVs) 
and two/three-wheelers (2/3Ws), with projections indicating a high sales share of electric 
vehicles in the coming years.
 Innovation and Adaptation:
The number of original equipment manufacturers (OEMs) producing electric heavy-duty 
vehicles (HDVs) in China has tripled between 2020 and 2023, indicating a strong market 
response to the demand for electric trucks and buses. Chinese firms have also been 
expanding their offerings across multiple segments, providing potential advantages in terms 
of economies of scale and robust supply chains.
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