"Financial Times" Survey: China's Electric Vehicle Market Forced to Grow

According to the latest survey by the "Financial Times" research service "Investment Reference," although local brands still dominate the Chinese electric vehicle market, this may not necessarily be the case in the future.

The “gold rush” triggered by the Chinese government’s encouragement to develop the electric car industry may lead to a major reshuffle of the industry. The brands currently leading in the electric vehicle market may be lagging behind in the market in the future.

According to the latest survey by the "Financial Times" research service "Investment Reference", among the leading companies in the industry, only Shenzhen's BYD ranks among the most popular electric car brands. Although many foreign automakers are still researching and developing technology, and most haven't started selling in China yet, respondents still have an overwhelming preference for them (our survey did not include highly-conceptual, technology-supported start-up companies, such as Nio, Byton and Xpeng).

Before the Chinese government imposed a quota system on electric cars for automakers, foreign automakers announced that they would increase investment in electric vehicles in China, the world’s largest auto market. Starting next year, automakers with production volumes above a certain scale will be required to produce a certain amount of electric vehicles, starting with a 10% quota. Foreign companies are collaborating with local electric vehicle manufacturers in China to achieve this quota. At the same time, they will develop long-term investment plans for electric vehicle production based on existing joint ventures.

As more factories are put into production and the government re-adjusts subsidies to encourage higher-quality car production, we believe that the current market leaders will not be able to stay ahead.

China's electric vehicles are a small and rapidly growing market. Last year, sales of pure battery-powered vehicles or plug-in hybrid electric vehicles in China increased by 69.2% to 556,000 vehicles, accounting for about half of global sales.

In order to control pollution and develop the green industry, the Chinese government has been subsidizing the domestic electric car industry through the central and local governments since 2013.

In our survey, more than 90% of people who need to buy a car in the next 12 months said they would consider electing an electric car, while 55% said that they would choose to do so. The most important thing is to consider environmental protection. We suspect that the real motive behind this is actually government subsidies. Real demand may emerge in 2020, when consumer subsidies will be completely eliminated.

In the third-tier cities, 9.4% of respondents believe that subsidies are the second most important factor in the purchase of new energy vehicles. For first-tier urban residents, the difficulty in obtaining license plates (10.4%) is an important factor.