The world’s largest automakers are currently competing for dominance in the EV market. Tesla, Ford and BMW are in the lead, but Chinese companies are set to take them on, analysts say.
As countries around the world set goals to achieve carbon neutrality by 2050-2060, the Chinese government is planning to fully phase out conventional cars in favor of electric vehicles by 2035. Chinese EV manufacturers have made a sizeable foothold in the local market and are now planning to expand overseas.
Tesla, which is the current market leader, sells about 370,000 electric cars per year. The company’s sales jumped by 70% in the third quarter of 2021, pushing its market cap up to a spectacular $1.14 trillion.
However, Tesla specializes in producing luxury-class electric cars, with budget models like Tesla Model 3 costing $48,000. Its Chinese competitors are offering more affordable vehicles to consumers. For example, the price of a BYD e2 is $20,000, which is half the cost of its American counterpart.
China’s EV market is considered to be the largest in the world and is likely to expand further. About 1.3 million electric cars were sold in China in 2020. According to an outlook by UBS, by 2030, 3 out of 5 cars in the country will run on electric power. In November 2021, while global car sales slumped by 13%, EV sales in China went up by 18%, Bloomberg reported.
Chinese authorities have set ambitious goals for the domestic EV industry. In the 5-year economic plan for 2021-2025, which was officially endorsed in March 2021, the National People’s Congress placed great importance on development and production of electric cars.
China’s Ministry of Industry and Information Technology is planning to fully phase out conventional vehicles by 2035. The country’s State Council expects EV sales to rise to 20% of overall new cars sales by 2025. In 2021, electric cars accounted for 14% of all new vehicle sales, Nikkei reported.
