From “Electric Cars” to “New Energy Vehicles”: Accelerating the Construction of a Major Market
On March 31, 2025, CCTV reported on the rapid development of a major market for new energy vehicles in China. This year has shown less clarity in construction progress due to various regulatory pressures, yet significant barriers remain unaddressed. Local governments have made efforts to protect local enterprises and promote regional economic growth, implementing restrictions on foreign companies entering the market. However, these measures have not hampered the market’s overall expansion but have instead led to a heightened focus on construction quality and cooperation.
As for electric vehicles, the rapid development of new energy vehicles has become one of the most pressing issues, with electric cars emerging as a critical resource. However, the current state of the market presents challenges that could affect the growth of new energy vehicles. For instance, there are still issues regarding high electricity costs and the affordability of charging infrastructure, which have not yet been resolved.
Since 2018, local governments have permitted certain companies to engage in the electric vehicle business under specific formats. In a 2018 report, a local government expressed that while they have facilitated many companies to enter the electric vehicle market, they face challenges related to new energy vehicle growth and the market’s limited entry points.
Looking ahead, by 2024, local governments are expected to increase their support for new energy vehicle projects. They will likely provide additional financial assistance to encourage compliance and industry participation in the electric vehicle sector. Meanwhile, the establishment of new energy vehicle infrastructure will become increasingly vital for local government strategies.
According to reports from 2020, the local electric vehicle market had a population of 1.6 million units, accounting for 1.17% of total vehicle registrations. However, the new energy vehicle market is projected to grow to 1.5 million units, reflecting a consistent upward trend in demand. By 2023, the market for new energy vehicles in various major cities is expected to reach 13 million units, signifying a 10% increase from previous years.
As the local market continues to expand, removing barriers imposed by local regulations will be crucial for accelerating growth. By mid-2024, several regions are likely to implement new policies that enhance the development of new energy vehicle infrastructure and improve overall market accessibility.
In summary, the rapid development of the new energy vehicle sector in China is poised for significant growth as local governments streamline regulations and enhance infrastructure support. This will foster a more competitive and vibrant market landscape.
