China’s Electric Car Boom Met With Skepticism

MAY 9 2016 BY MARK KANE 17

Venucia e30 (aka Nissan LEAF)

Venucia e30 (aka Nissan LEAF)

Automotive News recently published an extensive article about China’s electric car boom, in which many aspects of the growth is questioned by skeptics.

In 2015 production and sales of plug-ins (New Energy Vehicles) increased to over 330,000, out of a total of some 21.1 million vehicle sold. China is the largest, and one of the fastest growing markets, in the world for EVs, boasting nearly 150 plug-in models presented at the recent 2016 Auto China motor show.

The reason behind the tremendous growth is obviously the large incentives financial and non-financial (…we will call these dis-incentives for ICE vehicles, as sometimes an EV is the only quick way to register and use a car in large, smog-ridden cities).

According to the article, subsidies on NEVs has already reached $4.6 billion.

Automotive News describes the arguments of skeptics.

On the consumer perspective we have people like Song Yayun, a mild-mannered professor of ancient Chinese literature, who bought an electric car because it was quickest way to have a car (instead of awaiting for license plate lottery). Once bought, he had to charge the car from second floor of apartment building, and he considers pricing as still too high – even for lower-end models like BAIC EV200.

Nissan CEO Carlos Ghosn would seem to agree, saying recently that the Venucia e30 (aka Nissan LEAF) sales were disappointing, and his company needs to introduce lower-cost, lower-spec models (beside improving the LEAF).

“The consumer is not ready to jump into EVs,”

“We are disappointed,” Ghosn said in Beijing. “For the moment, we have neither sales nor profits on electric cars. … In China, we brought the car, but we’re not selling it.”

BYD Qin EV300

BYD Qin EV300

Incentives at the current stage are key in attracting consumers.

Manufacturers are now distressed, because with investing in the development of new plug-in models for China they also need to assume that the incentives will stay “as is” at least for several years more.  No sure thing at all.

James Chao, Asia-Pacific managing director at IHS Automotive said:

“As an EV maker, you really have to watch for what the government does next. You could be spending a lot of money on these things and end up with vehicles that don’t sell.”

One of the interesting stories is with BYD, which has volume sales of pure electric and plug-in hybrid vehicles, combined with owning its own lithium-ion battery production to make profits on NEVs today.

“Sophie Shen, a senior manager at PwC Autofacts, says BYD has actually been profitable selling EVs with subsidies.

“BYD’s capability of selling volume NEV models and supplying others with EV batteries has already gained itself a good position in the competition,” Shen said.”

source: Automotive News

Categories: China

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17 Comments on "China’s Electric Car Boom Met With Skepticism"

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Michael Will

Yawn. Landslide EV adoption is unstoppable, after owning one since 2015 I would never go back, incentives or not. Tesla changed the future and present already.


I find a rising tide a more appropriate analogy. Slower but unstoppable and in a certain sense not realized as it is more gradual. Landslides are quick and abrupt.
But I agree with the sentiment. Once you go ev you never go back.


China,suspicious numbers? How could they even be in the same sentence. We all know that everything that comes out of China is veracity statuary enshrined in the temple of truth.
Zai Jian.


Let’s remember most of these EVS are tiny, under 2k lbs.
Also lots of corruption like building one, getting the credit then taking the battery out and put it in another new one and get the credit again is one way they cheat.


I meant their EVs were mostly under 1.2k lbs


1. The BAIC EV200 is not a “lower-end model”. It’s a Leaf-comparable midsize BEV.

In China’s EV market, lower-end are cars the size of the Smart ED but with shorter range and lower top speed, like the Kandi K series.

2. The same govt. uncertainty w.r.t. EVs and renewable energy, exists almost everywhere. China being a centralized dictatorship brings its own twist, which on the narrow question of EV/renewables might be actually an advantage.

Compare to the US or EU, where you have a patchwork of often contradictory central and local policies, because at any given point in time some local governments will think they can earn cheap political points by turning EVs into some kind of “enemy”. To wit, the cold-turkey shutoff of subsidies in Georgia, whose main metropolis is one of the most smog-ridden in the country.

3. Thanks for bringing the BYD element from the story. It pretty much refutes the entire argument. If the largest player in China’s EV scene is doing well, then arguably the prospects for the field as a whole cannot be that bad.

4. Haters will always hate. Just roll on.


Those government subsidies are not good in the long run when they are used to prop up “undesirable” EV. In the long run, what will help to put EV on firm footing is supporting cars like Tesla 3 (assuming they produce them according to spec). That won’t need any government help to sell.

Fortunately for us, Tesla is pushing everybody, so better EV will come to market soon in US. Not sure about China with their high import tariff that makes Tesla 3 prohibitively expensive and their subsidy to prop up poor cars like NV200 (compared to Tesla 3, it’s poor).


China has many, many car companies (I think it was 70 last I heard). As long as EVs are competing with each other for a limited number of license plates, then bad ones will get punished even if all EVs are subsidized. They’ve got Internet word-of-mouth there too.

The logical long-term goal of the government – and the reason so many people hate China’s auto industry – is exports. The Japanese and Korean experience was that you could only learn to make exportable cars through tough experience. But there also must be a shakeout in China because there’s just too many companies for all of them to develop exportable cars. Between the punishment of non-EV automakers and the failure of the inferior EVs, the shakeout will be accelerated.


If they’re competing in walled garden, they may not achieve anywhere near competitive (ie, good) EV, even after shakeout. When Tesla 3 made in US will cost about 2X in China, whichever Chinese company that survive the shakeout won’t have to try nearly as hard to compete.

Perhaps better is to keep the subsidy, but gradually lower the tariff on select great EV: ie, Tesla 3 and SparkEV 🙂


super390 said:

“As long as EVs are competing with each other for a limited number of license plates, then bad ones will get punished even if all EVs are subsidized. They’ve got Internet word-of-mouth there too.”

Unfortunately the semi-autonomy of China’s Prefectures (kind of like States in the USA) and even some cities (some are their own Prefecture) works against this. I don’t know if it’s still true, but in the past, some Prefectures have had laws and/or regulations restricting or prohibiting sales or licensing of cars, including EVs, made outside that Prefecture.

We can hope that China’s central government has, or soon will, move to eliminate or at least reduce the effect of such locally protectionist laws and regulations. Unless and until that happens, companies selling inferior products will be able to limp along, propped up by a local near-monopoly, and unfortunately stunting the growth of companies selling better cars.


Someone should have pointed that out about the oil industry decades ago then, would have saved us an aweful lot of planet!

Martin Winlow

A well-rounded and insightful comment. Makes a change!


75000 NEVs in 2014
331000 NEVs in 2015
growth 4,42
…… NEVs in 2016?


What is the point of this article? That China is subsidizing EVs and that’s why they are taking off? Isn’t that the point???

This is just as bizarre as the articles that used to come out in 2015 claiming that China’s EVs are “too small” That’s the goal in most countries that don’t want giant hulks hogging their streets.


The problem is that this InsideEVs article merely quotes bits and pieces of a much longer and much more informative article. This abridgement contains almost nothing of interest, and has so little informational value that it comes across as merely anti-China propaganda. The actual article is worth reading, and doesn’t have the same anti-China tone.

So here’s that link to the Automotive News article again:


The Chinese started pushing electric bicycles in 1998. In that year they sold only 58,000 bikes. In 2015 the number sold will be 29 million according to Bloomberg and Navigant. It’s estimated there are already something like 180 million e-bikes on China’s roads. By 2018 China is expected to manufacture 42.5 milliom e-bikes.

If the Chinese government continues to push electric cars like they have e-bikes, then China may indeed become the world leader in EV production, just as they are for electric bikes.

Tesla just had it’s best month ever in China in March with 1,304 sales. Sales are also good in Hong Kong where 2221 Model S were sold in 2015. Hong Kong now has the 4th highest EV penetration in the world.

Anything can happen, but I see the Chinese staying the course with EVs. China totally dominates world wide e-bike manufacturing. They no doubt would also like to become a significant global player in 4 wheel vehicles as well. The internal combustion engine has likely reached the zenith of its development some time ago. It’s likely that governments will eventually legislate the ICE out of existence anyway.


+1, and a correction: China already *is* the world’s #1 EV producer and EV market. The numbers more commonly cited for 2015 are ~200k, which is still nearly double the US and nearly 40% of the global EV market.

And on eBuses, right now BYD makes and sells the majority of the world’s eBuses, and its closest competitors AFAIK are also Chinese.