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Alternative Energy Vehicles in China

Posted on: Thursday, December 3, 2020 - 15:51

Alternative Energy Vehicles and, in particular, e-mobility, have taken off with enthusiasm in China’s mobility sector, and product development in the Chinese automobile manufacturing sector is rapid, with makers already offering a wide range of both pure electric vehicles and plug-in hybrids.

By 2018, China became both the largest buyer and manufacturer of electric vehicles in the world, accounting for more than half of all electric cars made and sold globally. Nearly 1.3 million New Energy Vehicles (NEVs) – plug in electric vehicles and plug-in hybrids – were sold in China in 2018, which represents a 62% rise compared to 2017.  

Government policy, rather than pure market economics, created this phenomenon electric car boom in China. For over a decade, the Chinese government has poured money into the EV industry, offering generous tax incentives and subsidies for carmakers and buyers, building charging infrastructure across the country, while placing restrictions on the sales and use of gasoline cars. As a result, electric vehicles have become a large part of Chinese people’s daily lives in a way that hasn’t happened in European countries or in the United States.

Among the key measures that illustrate the developments of alternate energy vehicles in China, a few highlights include:

  1. Public & Private Collaboration to Electrify Public Fleet in Shenzhen
  2. Government Incentives for NEVs Producers
  3. Government Incentives for NEVs Buyers.

The first measure listed relates to how Shenzhen Bus Group became the world’s first fully electric bus fleet. Collaboration between the public and private sectors formed a critical foundation for the implementation of a holistic ecosystem that can support this largest electric bus fleet in the world.  

The second and third measures illustrate the importance of the government’s determination in setting the right incentives to foster an environment that could stimulate both demand and supply in bringing about change in the automobile industry. Government incentives notably include heavy subsidies, tax cuts, and preferential treatment. 

As in many other mobility areas in China, the development of the alternative vehicles industry could have not been so fast without the government’s support and intervention.


Article written and contributed by: 
Julia Pérez-Cerezo 
Managing Director GV21 

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