World’s Largest Car Market Turns to Electric Vehicles

  • Print

electric car

China is preparing to announce the date from which internal combustion engine car sales will be banned, joining Norway, France, and the UK, among others, that have declared a complete shift to electric vehicles.

Bloomberg quoted the country’s vice minister of industry and information technology, Xin Guobin, as saying the ministry is working with regulators on the timetable of the phasing-out. The deadline could be set for more than two decades from now, at least according to a manager from China’s biggest passenger car exporter, Chery Automobile Co. Liu Zhijia believes a deadline after 2040 is a reasonable one given the size of China’s passenger car market, leaving carmakers enough time to adjust.

Hear Jeff Christian on Metals, Lithium, and Electric Vehicles

McKinsey reported in July that China has moved to the forefront of the EV revolution, producing 375,000 EVs last year. This constituted 43 percent of global electric car production and made China the country with the largest number of electric cars on the road, surpassing the United States.

In the meantime, China is building a solid EV battery production capacity, too. To date, there are 140 electric vehicle battery manufacturers in China, and they have led the doubling of the global battery cell production capacity to 125 GWh to date. This, estimates show, could grow further to over 250 GWh by 2020.

Bernstein has predicted that electric cars will hold 40 percent of global car sales in 2037. That’s about 40 million cars based on current global car production and sales numbers. A lot of these will be made in China and powered by locally made batteries. In fact, China is seen to expand its share of the global EV battery market to 70 percent over the next three years, with the notable help of the government.

Hear also Roberto Aguilera on the Long-Term Energy Landscape

Beijing is set on cutting pollution and ensuring China has a large enough chunk of what could become a US$240-billion industry over the next two decades – batteries. It will likely do its best to make the transition to a fossil fuel-free passenger car sector a smooth one.

By Irina Slav for

CLICK HERE to subscribe to the free weekly Best of Financial Sense Newsletter .

About Oil Price