More than 300,000 electric vehicles were bought in China last year — and that figure is set to double in 2016, government officials estimate.
Such statistics easily make China the largest, and fastest-growing, market for electric vehicles, and automakers are taking notice. Car manufacturers, both Chinese and foreign-owned, are taking steps to develop and build electric cars, as the government helps out with subsidies and preferential treatment for buyers of electric cars.
The 300,000 figure comes from Miao Wei, the head of the Ministry of Industry and Information Technology, in a recent Reuters report. Miao expects that figure to double this year, though he also noted that electric batteries need improved reliability and range, and that China needs more EV charging stations.
The central government in Beijing wants more electric vehicles on Chinese roads to improve air quality and to cut carbon emissions. Beijing has been using generous subsidies to entice tech companies to enter the space, out of a concern that traditional Chinese automakers aren’t innovative enough. Here’s a look at what those tech companies, as well as other car manufacturers, are up to.
Investment Opportunities in China’s EV Market
BYD has added a second model to its line-up of electric cars, the Financial Times reports, and expects to sell 150,000 EVs this year. That’s about three times how many it sold in 2015, according to the FT.
NextEV, founded in 2014, is one of about a dozen Chinese auto companies that have started up in the past couple of years, the Wall Street Journal reports. The company was formed by Internet entrepreneurs and is backed investors like Tencent Holdings. NextEV plans to introduce its first electric car next year, and hopes to build a “high-end, high-performance electric car for half the price of a Tesla car,” cofounder and chairman Li Bin tells the Journal.
NextEV’s president is Martin Leach, a former Ford executive and CEO of Maserati. Other notable hires include Padmasree Warrior, the former chief technology officer at Cisco Systems. Besides Tencent, investors include Sequoia Capital and Hillhouse Capital Group. NextEV has raised about $500 million so far, and expects to reach its goal of $1 billion by the end of the year, Li tells the Journal.
Beijing-based LeEco, founded in 2004, is another tech company that’s moving into the EV space. It’s known for smartphones, televisions and streaming video, but at the Beijing Auto Show last month, LeEco introduced a self-driving electric concept car. It’s not clear when the car will go into production, the Journal notes. The company will look to raise funds from external investors to commercialize the concept car, according to Bloomberg Briefs. The company went public in 2010, is listed on the Shenzhen Stock Exchange, and has raised $105.4 million in venture capital from investors including CHT Capital, Shenzhen Capital Group, Huijin Cubic Capital, and Shenzhen Cowin Venture Capital Investments. It most recently raised $55.4 million in a Series B venture round from CHT Capital in September, 2014.
Beijing Electric Vehicle Co., or BJEV, will be listed as an IPO by its parent company, state-owned BAIC Group, which seeks to raise about 3 billion yuan ($460 million) for the electric car company, Bloomberg reports. BAIC owns 60 percent of BJEV, which is developing its first plug-in hybrid model.
Future Mobility, launched in February, is a Chinese start-up that’s backed by Tencent and Foxconn Technology Group, and it has announced plans to build electric and smart cars. The company just hired a pair of executives from Tesla China, not long after hiring a trio of executives from BMW’s i brand, China Daily reports.
Toyota intends to sell two plug-in hybrid models in China by 2018, Fortune reports. The company started building Prius hybrids in China in 2005, and last year started local production of the Corolla Levin gas-electric hybrid; it’s sold 400,000 of the two models in China so far. Toyota indicates that its new plug-in hybrid models will also be produced in China, according to Fortune.
Ford, which sold 1.1 million cars in China last year and another 300,000 in the first quarter of 2016, wants between 10% and 25% of its Chinese sales to be electric or hybrids by 2020, Automotive News reports. To that end, Ford is introducing new models in China, including a hybrid version of the Modeo later this year and a plug-in hybrid, the C-Max Energi, early next year.
Consumers who want to buy an electric car can get a license plate immediately, bypassing the sometimes months-long wait it can take to get a license plate for a traditional car. And in cities like Beijing, gasoline-powered cars have to stay off the roads one day per week to cut down on pollution and traffic; electric cars face no such restriction.
Carmakers and consumers also benefit from ongoing government subsidies for EVs. But the central government has said it will reduce those over time, the Wall Street Journal notes, which has some observers questioning the long-term viability of the Chinese EV market.
Electric car owners in China, like those in the U.S., also face the challenge of limited charging points. Beijing, for instance, had just 172 public charging facilities at the end of 2015, according to Xinhua News Agency. The city intends to install thousands more this year, though, including 14 large charging facilities at expressway service stations and nearly 5,900 smaller charging stations, Xinhua says.