Auto sector representatives expect China’s NEV market to pick up in 2020

Auto sector representatives expect China’s new energy vehicle market to pick up in 2020 as automakers roll out new products. They reiterated the need for supportive government policies.  

China implemented production quota for automakers to support NEVs. Sales of NEVs- plug-in hybrids, battery-electric vehicles and those powered by hydrogen fuel cells jumped 62% last year with government support. However, sales of NEVs started dropping this year after China cut subsidies for NEVs substantially. In October 2019, NEV sales fell 45.6 per cent YoY.

"For next year, we foresee the NEV market will continue to grow, maybe not as dramatic as it was in the past," Stephan Woellenstein, Volkswagen Group's chief in China told Reuters during Guangzhou auto show last week.

A key part of the revival is linked to more big automakers launching NEV models, he said, as it helps NEVs become more mainstream.

Automakers such as Volkswagen, Toyota's Lexus, Daimler's Mercedes-Benz and Tesla showcased newly launched electric vehicles with fresh designs at the Guangzhou auto show.

Brian Gu, president of Guangzhou-based electric vehicle start-up XPeng said NEV sales can recover next year with the help of improved charging infrastructure in China. Another driving factor according to him could be the falling prices of NEV as more automakers started producing NEVs.

"In about two years time, from my perspectives, electric vehicles will be significantly cheaper than ICEs (internal combustion engine cars), as battery costs come down very rapidly and volumes will drag down cost," he said.

Ma Fanglie, GM of BAIC Group's electric vehicle unit BAIC BluePark talked about more supportive policies to take the industry out of pressure.

Fu Bingfeng, executive vice chairman of China Association of Automobile Manufacturers, told Reuters that government bodies were weighing upon supportive policies for the industry.

"Our works now will focus on boosting real consumption-side demands, including improving infrastructures and supply chain," he said.