China’s penetration rate of new energy vehicles is expected to exceed 40% in 2024

On March 4th, China's Ministry of Industry and Information Technology released the operational status of the national lithium-ion battery industry for 2023. Overall, although the production of power lithium-ion batteries continued to grow year-on-year, but the growth rate plummeted by 84%. This indicates that the expansion cycle of power battery production capacity in China has ended, and 2024 will enter a contraction cycle.

In 2023, China's sales of new energy vehicles reached 9.5 million units, with a penetration rate of 31.6%, and exports of 1.2 million units. Shi Jianhua, Deputy Secretary General of the China Electric Vehicle Hundred People Association, predicts that the sales of new energy vehicles in China will reach 13 million units in 2024, with a penetration rate of over 40%. Exports will reach 1.8 million vehicles, accounting for 30% of the total vehicle exports.

（Shi Jianhua, Deputy Secretary General of the China Electric Vehicle Hundred People Association）

"Through the joint efforts of the entire industry, China has developed into the world's largest market for new energy vehicles." Shi Jianhua stated at the New Energy Vehicle Innovation Technology Forum and the 12th Automotive and Environment Series Forum recently held that China's new energy vehicle technology is becoming increasingly mature, and its quality and cost advantages have become apparent. Key core technologies such as batteries, chips, and operating systems are constantly breaking through; At the same time, hybrid technology has also become a focus of attention and innovation for car companies, and it is expected that PHEVs (including extended range vehicles) will contribute one-third of new energy vehicle sales in 2024.

Xu Changming, a senior economist at the National Information Center, also predicts that in the next 3-4 years, the Chinese new energy vehicle market will develop rapidly and the penetration rate will continue to increase. At present, the country provides many tax and fee preferential policies, including car purchase tax, pure electric vehicle consumption tax, road maintenance fee, and vehicle and vessel tax. Consumers are more aware that new energy vehicles are a major trend advocated by the country.

（Xu Changming, Senior Economist at the National Information Center）

In terms of price, new energy vehicles have further improved their competitiveness compared to traditional fuel vehicles. Xu Changming stated that currently, the price of PHEVs is lower than that of hybrid models, and may be at the same or slightly lower than that of gasoline vehicles. However, leading new energy companies have the ability to continue to lower prices, and the frequency of price reductions for electric vehicles is faster than that of gasoline vehicles. The number of consumers actively choosing new energy models is rapidly increasing.

However, Xu Changming also stated that from the perspectives of economy and convenience, gasoline powered vehicles, PHEVs, range extenders, and pure electric vehicles will continue to coexist for a considerable period of time in the future, with each having its own customer base and significant market potential. Based on this, he believes that in the coming years, the growth rate and penetration rate of new energy vehicles with engines will be significantly higher than pure electric vehicles.

Source: China Economic Network

Translated by; WONDEE Autoparts

2024/3/12