Powering Electric Vehicle Dominance — Lessons from China and Norway
Based on figures reported in the latest edition of the International Energy Agency’s (IEA) Global Electric Vehicles Outlook, over one million electric cars were sold around the world in 2017, a new record. The cumulative number of electric and plug-in hybrid cars on the world’s roads is now estimated to be well over 3 million, a 54% increase from 2016.
China remains, by far, the largest electric car market in the world, accounting for half the volume with 580,000 electric cars sold in 2017 — a 72% Y/Y increase. But more definitively, electric cars accounted for 39% of new car sales in Norway, with over 62,000 units sold, making it the world’s leader in electric vehicles by market share.
Clearly, there are a few lessons to be learned by other countries from the sustained EV dominance of China and Norway, on how to successfully encourage adoption of new energy vehicles (NEVs) by their citizens.
The China Story
The exponential growth in automobiles experienced by China has created a major collateral environment issue, especially in metro cities Shanghai, Beijing and Guangzhou. While these city governments have already reacted by restricting auto sales to moderate vehicle population growth, the Chinese government has also simultaneously made a big commitment to develop the NEV industry. Focusing on low emissions car development, the government launched the green initiative in a major way in 2009, with 13 cities prioritised to pilot the programme. Since then, there has been no relenting by the government, resulting in China becoming the largest EV market in the world in 2016. In fact, investments by EV companies in China are emerging to be some of the largest in the world today in terms of production volumes.
Evidently, growth of EVs in China can be primarily attributed to supportive government policy, including public procurement programs, financial incentives; reducing purchase price of EVs significantly, tighter fuel-economy standards, stringent emission regulations, low/zero emission vehicle mandates and a variety of local measures, i.e. restrictions on vehicle usage based on emission performance. The rapid uptake of EVs has also been catalysed through progressive cost reductions and enhanced performance of lithium-ion batteries. In addition, consistent with the anticipated growth, the government has planned ambitious targets for setting-up charging stations to overcome buyers “range anxiety”, a challenge which has long plagued adoption of NEV vehicles. For example, Beijing’s government is currently working on installation of 400,000 charging points across the capital by 2020.
