China's new energy vehicle (NEV) industry has entered the fast lane of development, with both domestic and foreign carmakers vying for bigger shares of this rapidly expanding market.

 

Despite the COVID-19 resurgence, China's NEV industry continued to enjoy a market boom thanks to policy incentives and more choices of competitive models.

 

From January to November, 2022, the country's NEV sales exceeded 6.06 million units, doubling compared to the previous year -- and with the market share of such vehicles hitting 25 percent -- according to the China Association of Automobile Manufacturers.

 

BYD, China's largest NEV manufacturer, has ridden the market boom, with its three millionth NEV rolling off the production line in November. BYD manufactured its first one million NEVs in 13 years, the second one million units in one year and the third one million units in half a year.

 

From January to November, the Shenzhen-based carmaker, which ceased the production of traditional gasoline-powered vehicles in March, sold over 1.62 million NEVs -- surging 219 percent year on year.

 

Starting as a niche brand and then becoming mainstream, the development of BYD reflects the rise of Chinese automobile brands and the rapid growth of the country's NEV industry, said BYD chairman Wang Chuanfu.

 

The market boom has led to the rise of a number of startup carmakers like NIO and Li Auto. New players, including Huawei and Xiaomi, are also piling into this industry to claim a share.

 

Global automakers such as Tesla, Volkswagen, Audi and BMW have also ramped up their expansion efforts over the past few years, in order to tap the potential of the world's largest NEV market.

 

Tesla's Shanghai Gigafactory delivered 100,291 vehicles in November, hitting a fresh monthly high. The Shanghai Gigafactory hit a milestone in August as its 1 millionth vehicle rolled off the assembly line, less than three years since its first car was manufactured in China.

 

Early this month, the first pre-series NEV of Volkswagen Anhui came off the production line in Hefei, capital of east China's Anhui Province. This is a major step toward the mass production of our first new energy model, which is scheduled for 2023, said Erwin Gabardi, CEO of Volkswagen Anhui.

 

These two international automakers have benefited from a policy China rolled out in 2018, which lifted foreign ownership caps for NEV manufacturing ventures in the country.

 

Tesla's Shanghai Gigafactory is the first wholly foreign-owned car manufacturing enterprise in China, while Volkswagen raised its stake in the Anhui joint venture from 50 percent to 75 percent in May 2020.

 

Luxury carmakers Audi and BMW made new moves in northeast China this year, investing in an NEV manufacturing project and a battery project, respectively.

 

Foreign carmakers are ramping up investment in China, eyeing China's bright economic prospects and huge market potential, as well as its focus on NEV industry development and strong policy and financial support measures, said Zhang Bingli, a professor at the School of Automotive and Transportation Engineering, Hefei University of Technology.

 

As more and more companies join the competition, Chinese consumers have an increasing number of choices with much longer ranges.

 

Favorable government policies and ever-increasing charging facilities are also behind the country's NEV market boom.

 

China announced in September that the purchase tax exemption for NEVs would be extended to the end of 2023. The third extension since the country first implemented the policy in 2014, was expected to waive 100 billion yuan (about 14.33 billion U.S. dollars) worth of taxes.

 

The ever-growing number of charging facilities is helping to reduce drivers' range anxiety. By the end of November, the country had about 4.95 million charging points, up 107.5 percent from the same period last year, according to the China Electric Vehicle Charging Infrastructure Promotion Alliance.

 

According to the Central Economic Work Conference held in mid-December, China will continue to support NEV purchases in a bid to expand domestic demand in 2023.

 

Robust NEV sales are expected for 2023, with the lifting of COVID-19 restrictions likely to help spur consumer spending and boost supply chains.

 

The China Association of Automobile Manufacturers forecast that China's NEV sales for 2023 would grow 35 percent year on year to 9 million units, compared to an estimated 6.7 million units for 2022.