Electric Vehicles: Market Opportunities in China

Electric vehicles (EVs) offer an exciting opportunity in China both in terms of the potential to build a domestic manufacturing base and the potential to create a strong domestic market for the product. The Chinese nation stands to benefit from both supply-side and demand-side promotion due to the economic stimulus from EV manufacturing and export, the environmental benefits of reduced air pollution and reduced greenhouse gas emissions, and the energy security benefits of transitioning away from foreign oil dependence. The Chinese have several advantages when it comes to stimulating EV industry development and EV deployment, including: leadership in battery technology, great potential for cost competitiveness, an enormous and emerging number of new car buyers, and high level government support. Yet a number of challenges must be taken into account as well, including: shortfalls in overall automobile R&D spending, consumer concerns about Chinese cars’ safety and reliability, enhancing the appeal of the Chinese brand, and heavy national infrastructure demands. This paper will seek to examine the opportunities and challenges associated with EV deployment in China and identify industry actions and policy measures to facilitate the process