In China, more electric vehicles are being built and sold than ever. But why is that, how is the industry developing, and what has government policy got to do with it? These six factors explain.
#1 Auto emissions are a major contributor to air pollution
China has many cities where air pollution exceeds officially-designated 'safe' levels. As China urbanizes, air quality is becoming an increasingly sensitive issue and one the Chinese government is growing concerned about.
#2 And the human cost from poor air quality is huge
Researchers have estimated that air pollution in China is both directly and indirectly responsible for millions of deaths per year.
#3 So China is pushing investment into the electric vehicle sector
As well as attacking air pollution by boosting the supply of EVs, China is looking to leap ahead of other countries by developing capacity and controlling supply chains for the industry.
#4 And using active policies to guide demand
On the demand side, generous subsidies for EV buyers, high fees for new petrol car licenses and aggressive plans for charging infrastructure are three parts of a detailed policy package.
#5 Which are propelling China's electric vehicle market
1.1 million electric cars were sold in China in 2018, making China the largest market in the world, 3x greater than the US and 20x greater than the UK⁹.
#6 Putting China on course to lead the global electric vehicle industry by 2030
The forces driving China's electric vehicle market and industry are profound and they demonstrate not only how significant the sector is becoming, but also how China is leading the world in terms of climate-friendly policies.
Ultimately, we believe this makes China a key space to watch and a likely source of innovative and investible ideas in the sustainable investing field.
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