China is becoming serious about leading the electrified future; they are looking for reducing its dependence on imported oil and decreasing the smog level in its cities while growing their Electric Vehicle (EV) market: near 375,000 EVs were manufactured by Chinese OEMs in 2016 (43% of EV production worldwide).

 

The Chinese government is giving an ultimatum to all automakers operating in the country: a sizable portion of their production or imports must be green in 2019, with escalating goals after that. This means companies, from global Toyota or General Motors to domestic BYD and BAIC, must meet minimum requirements for producing new-energy vehicles (NEVs): plug-in hybrids, pure-battery electrics, and fuel-cell vehicles. As China has the largest number of EVs on the road, analysts expect around 2.5 million passenger Chinese EVs to be sold in the country in 2022 while China wants 7 million vehicles sold every year (20% of the total) to be plug-in hybrids or battery-powered by 2025.

 

China has outperformed on both demand and supply dimensions, because of their manufacturers and suppliers together with the favorable conditions for EVs within the country itself, on the McKinsey Electric Vehicle Index (EVI) evaluating the performance of 15 countries in advancing electric mobility, based on key market and industry indicators:

Electric Vehicle Index (EVI) - McKinsey

IMAGE: Electric Vehicle Index (EVI) score overall, for selected countries - McKinsey

 

 

Therefore Car Makers, Original Equipment Manufacturers (OEMs), and suppliers are rapidly accelerating their development and manufacturing efforts to meet the targets given the size of the Chinese market —the largest for cars and EVs worldwide. Some of the world’s largest automakers are taking notice:

· Volkswagen will introduce about 40 locally produced NEV models in China within the next decade.

· BMW is planning to produce two pure-electric cars (including the iX3 SUV) starting in 2020, taking advantage of the experience of already making two plug-in hybrids there.

· Ford is teaming up with the local Zotye to introduce at least 15 hybrids and EVs by 2025.

· Toyota, Fiat Chrysler, Honda, and Mitsubishi all plan to sell the same electric SUV developed by Guangzhou until they develop their own technologies.

 

The Electric Vehicle future is coming from China, as seems they do not want to be the largest global emitter of greenhouse gases.