China’s electric vehicle (EV) market has been growing rapidly, with new research from Counterpoint showing that passenger EV sales nearly doubled in 2022, up almost 90% from the previous year. This surge has led to EVs accounting for one in four cars sold in China, with local brands like BYD, Wuling, Chery, Changan, and GAC dominating the market.
Although BYD led the market, followed by GM Group, Tesla, Geely Holding, and GAC Group, the share of battery EVs (BEVs) in China’s total EV sales decreased in 2022, with plug-in hybrid EVs (PHEVs) increasing their share to 24%. China was the second fastest-growing market among the world’s top-ten EV markets, with Japan coming in first with 119% year-on-year growth. However, China still accounted for nearly 60% of global EV sales volume.
Looking ahead, EV sales in China are expected to exceed 8 million units in 2023, reflecting the country’s commitment to reducing carbon emissions and promoting sustainable transportation. The country boasts over 300 EV models from more than 94 brands, ranging from affordable options priced at just $5,000 to high-end models priced at well over $90,000.
Furthermore, China has a robust EV start-up scene, with companies like Nio, Xpeng, Neta, AITO, IM Motors, Zeeker, Aiways, and Livan performing well. This competition has resulted in the top 10 EV models accounting for almost 45% of total EV sales, down 3% from 2021, indicating that new start-ups are challenging more established international players.
However, even established companies like Tesla are not immune to the challenges of the Chinese market. Tesla experienced a nearly 5% drop in its year-on-year market share due to production breaks caused by the resurgence of COVID-19. While production resumed at full capacity in June 2022, Tesla still faced challenges such as increased costs due to a difficult supply situation, competition from affordable options offered by EV start-ups, and domestic sentiment that hindered its efforts to solidify its Chinese market position.
Overall, the Chinese EV market is one to watch in the coming years as it continues to grow and innovate.
