China is set to become the world's largest new-energy vehicle (NEV) market, as an industry association estimated that sales of NEVs will exceed that of the U.S. this year, the Xinhua News Agency reported.
Xu Yanhua, deputy secretary-general of the China Association of Automobile Manufacturers (CAAM), was quoted as saying on Saturday, Dec. 5, that sales of NEVs in China will settle between 220,000 and 250,000 units, while the volume in the U.S. will be about 180,000 units. The report said that the growth of NEVs was in part driven by the central government's subsidies.
Xu noted that China's NEV sales will account for more than 40 percent of global sales this year, higher than in the U.S., the EU and Japan, respectively.
According to the report, local governments in China have offered support policies to encourage the development of NEVs, as part of government effort to cut down air pollution.
The report cited Beijing, which decided in October to exempt NEVs from its license-plate lottery. In addition, local authorities have also removed traffic controls and lifted purchase restrictions on NEVs, in line with the State Council's requirement.
Data from the CAAM showed that NEV sales in China surged 290 percent year-on-year to 171,145 units in the first 10 months of the year, while overall vehicle sales increased 1.5 percent to 19.28 million.
Xu, however, expressed concern about the domestic NEV market despite its fast growth, given that there is still a need for better safety and improved battery technology.
China Business News reported that since May, several enterprises, which included BYD, Great Wall Motors and Lifan Group, have invested in new-energy cars totaling 40 billion yuan ($6.44 billion).
SAIC Motor and Wanxiang Group, leading auto parts makers, have also set up new-energy bus ventures with plans to establish a manufacturing base in Hangzhou which is capable of producing 5,000 buses.
The report added that the capital that flowed to the new-energy sector amounted to 100 billion yuan ($16.1 billion) in the first half of the year.