China Sets to Dominate the Electric Vehicles Industry
EVs now account for 13.2 per cent of all global car sales, having tripled in two years since 2020 and China is leading the market with its home brands like CATL and BYD.
The sales of electric cars are exploding on a global scale. Last year, the industry saw an increase of 60 per cent compared to 2021 with nearly 11 million vehicles put into circulation. In other words: EVs now account for 13.2 per cent of all global car sales, having tripled in two years since 2020. Germany, Great Britain, France and China are the most important users.
This phenomenon will have universal repercussions and crucial effects on the environment, economy and geopolitical spheres. In 2022 alone, electric and hybrid vehicles have reduced oil consumption by around four per cent. Furthermore, today’s electric cars are becoming more efficient and have an average of 425km. Progression with electric cars will continue and it promises to hit a range of 580km.
Another poignant event reinforcing the attractiveness of EVs was the significant drop in the cost of batteries by more than 85 per cent, which constitutes a third of the overall price of this type of vehicle. The hyperbolic increase in demand also logically made it possible to increase battery production by 40 per cent in 2022 and the numbers would increase fivefold by 2025. This constant surge in demand for EVs represents one of the most notorious industrial challenges of our contemporary history.
Supply chain, international competition between industrial heavyweights, the balance of business, and interstate political relations will be part of the new sharing of power as a result of China being the major producer of batteries worldwide.
Thanks to the giants such as CATL and BYD, and to a national market where 1 out of 4 vehicles sold is an electric car with six millions sales in 20233 (double that of 2021), the Chinese market is twice as large as Europe and five times more than the US.
China’s strength lies in its domestic market and battery manufacturing capabilities, which has authorised China to export 165 per cent more vehicles abroad in November 2022 compared to the same period last year. Chinese manufacturers are therefore competitors of size at the global level and a company like BYD is generating a real revolution by positioning itself directly against Tesla, which it is giving a hard time.
Europe, which has automotive pioneers and flagships brands, currently buys around 19 per cent of its electric cars from China and this is only the start, as major Chinese manufacturers are betting on an upcoming escalation of around 50 per cent of their exports. For example, BYD recently announced the launch of three models exclusive for Europe.
This revolution of electric cars announces a redistribution of the cards, and very probably new conquerors.
For more information about Michel Santi, visit his website: michelsanti.fr/en
For more business reads, click here.