Outlook for Chinese EV sector in 2021

01 March 2021 #Uncategorised

2021 is the first year for China to roll out “the 14th Five Year Plan” and also marks the beginning of Chinese government’s pledge on carbon emission peak by 2030 and carbon neutrality by 2060. The transportation sector will play a crucial role in achieving the targets. Despite challenges of the pandemic, China EV100 for the first time held its flagship Annual Summit in January through both offline venues and online platforms, which continued attracting huge attention from the industry with over 17 million audience online. At the Summit, experts and leaders of OEMs and supply chain companies from China and abroad shared their views that would navigate the development of the electric vehicle (EV) industry in the challenging but promising year ahead. Here are some highlights:

2021 Market Development Forecast

In 2020, sales of new energy vehicles (NEVs) in China reached a new record of 1.37 million. Projected by China Association of Automobile Association (CAAM), 2021 will see 4% year-on-year sales growth of China’s overall car market at 26.3 million in total and 40% increase in NEV sales at 1.8 million. Multiple consultancy firms foresee a comeback of global sales growth and a

continuance of NEV boom in 2021 as COVID-19 tends to be under control.

Major global OEMs view China as a key market for EVs

Volkswagen declares to produce and sell 15 NEV models in China by 2025 accounting for 35% of its total sales, and to

manufacture 11.6 million battery electric vehicles (BEVs) in China by 2028. GM pledges over 40% of its cars in China to be electric by 2025. Nissan looks to fully electrify its China market by 2025 (including hybrid) and phase out gasoline cars.

There has also seen in-depth collaboration between major global OEMs with Chinese supply chain companies for electrification and intelligent mobility. For instance, Volkswagen acquired major stake of the battery manufacturer Gotion High-Tech and set up JV with Star Charge, FAW and JAC for charging solutions. Toyota established JV with BYD for joint R&D on BEVs and forged a strategic partnership with Momenta to commercialize the Automated Map Platform (AMP) in China.

China’s emerging automakers enjoy robust growth

Accumulative sales in 2020 of China’s emerging automakers was over 150,000 – 12% of total NEV sales in China. NIO alone sold 43,728 units and the sales of Li Auto reached 32,624. In the years to come, the new entrants will stay committed to technology and business model innovation. NIO will continue pushing forward battery leasing (BaaS) and striving to boost sales in overseas markets in 2021 and introduce the next generation autonomous driving model in 2022. Xpeng seeks to launch the third model in 2021. Li Auto aims for a full-size extended-range SUV in 2022.

Outlook of UK-China Collaboration

Coinciding with the Summit, China EV100 collaborated with Department for International Trade for the 5th consecutive year to hold “the UK-China EV Innovation Forum”. At this year’s event, the OEMs including Lotus, Jaguar Land Rover and BYD shared their ambitions on EV and endeavors to develop and apply cutting-edge technologies. A lineup of leading British supply chain companies, such as GKN, MIRA, Johnson Matthey as well as the AI chip unicorn Graphcore, also introduced their innovations on electrification, connected automated vehicle and hydrogen, which makes them at the forefront of the unprecedented industry transition.

The UK-China session alone attracted over 1.2 million audience online, which demonstrated strong interests of collaboration from both sides. A more prosperous NEV market in China in the years ahead will be associated with further intense competition. Striving to stay ahead of the game, OEMs from China and abroad will all continue increasing their investment in technology and business model innovations that especially fit with customers’ appetite in China market. To leverage their strengths on innovation, UK companies would find great potential to collaborate and add value for international and domestic OEMs in China, with open minds on diversified collaborative models. As global OEMs increasingly tap into and partner with the local supply chain, identifying and forging partnerships with Chinese supply chain companies could be a promising strategy for UK companies to raise brand awareness and develop business in China.

At the forum, China EV100 and SMMT officially signed off an MoU for strategic partnership. Based on our successful collaboration in the past years, we will leverage this new partnership to further support business collaboration between the UK and Chinese companies and use Joint Automotive Innovation Centre of China EV100 as a pivotal centre for UK businesses to tap into the Chinese market.

Qian Li
Head of UK – Business Development and Partnerships,
Joint Automotive Innovation Centre, China EV100

Click here for the full report of the China EV100 Annual Summit.

To register for the SMMT Electrified Week: China – Market opportunities and strategy of Chinese manufacturers (08:45 GMT), click here.

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