Capital Ideas^TM

2023 was a record year for electric vehicles (EVs): global sales neared 14 million, reaching 18% of all cars sold. To put things into perspective, over 250,000 EVs were sold every week in 2023, which was more than the number sold in a year just a decade ago.¹

A key driver of this seismic shift from EVs being a novelty to a mass-market product has been China. Chinese car makers manufactured more than half of all EVs sold worldwide in 2023 while almost 60% of new EV registrations were in China. In short, China is both the world’s largest manufacturer as well as consumer of EVs.¹

A big reason for that is down to the Chinese government’s strong commitment to invest heavily and grow its EV industry earlier than anyone else. Over the past two decades, there has been a series of well-funded policy measures to boost both the demand and supply of EVs. This includes land grants and production subsidies for EV makers and tax breaks for EV purchases.

The country excels in manufacturing technologically advanced EVs quicker and cheaper than global peers but growing concerns from foreign authorities over the rapid expansion of Chinese EVs overseas could hinder their international ambitions

In this Q&A, Capital Group investment analyst Jason Zhang discusses the key characteristics that make China so dominant in the EV space and whether the country can maintain its leading position in the face of this growing scrutiny.

1. Global EV Outlook 2024. Source: International Energy Agency