In the recent past, China had topped the WHO’s list for deadly outdoor pollution. A major portion of this pollution can be attributed to the use of various gasoline-powered vehicles that emit poisonous gases into the atmosphere. The growing concern about pollution has prompted the Chinese government to issue new rules for companies in the automotive industry in favor of selling more alternate energy cars in the country. This has spiked up the demand and the supply of electric vehicles in the China.
Interesting Facts About China’s Automotive Industry:
Wonder what makes China one of the key players in the Automotive industry?
- China is the largest producer of vehicles in the world by a wide margin, which means there is no question of another country taking over China as the automotive industry leader in the near future
- The biggest growth in the Chinese automotive industry is expected from the electric vehicle sector
- The Chinese government is offering various incentives to electric car owners such as free license plates and free parking to promote the sale of the electric vehicles
Why are Companies Keen on Entering the Chinese Electric Vehicle Market?
The Chinese automotive industry is driven by factors such as low cost of production, high demand, subsidies from the government, etc. With the new shift in the trend to electric vehicles in China, companies are focusing on meeting the demands to sustain themselves in the market.
- There is limited competition in the electric vehicle segment of the Chinese automotive industry
- The Chinese government is providing various incentives to the producers and owners of electric vehicles; due to this, there is an increase in the demand and an opportunity for companies in the automotive industries to meet this rising demand
- Lower maintenance and fuel costs have also given rise to the increasing demand for electric vehicles in China
- The Chinese government is likely to put a cap on the average fuel consumption; this would eventually force companies in the automotive industry to invest in the production of electric vehicles to survive in the market
- There is a huge fall in the price of batteries used for the production of electric vehicle, which would facilitate the production at a much lower rate and increase the profit margins