Over 152,000 Plug-in Electric Vehicles Will Be Sold Annually In China By 2017

China is now the world’s largest automotive market. The Chinese government has made vehicle electrification central to its aggressive plan for growing the automotive market both domestically and internationally and has created many national and local incentives for plug-in electric vehicle (PEV) purchases.

According to a new report from Pike Research, however, PEV production will fall well short of the government’s ambitious goals of manufacturing 500,000 PEVs a year by 2015. The PEV market in China will grow at a compound annual growth rate (CAGR) of 60 percent from 2012 to 2017, surpassing 152,000 units sold annually by 2017.

However, that figure represents less than 1 percent of the total light duty vehicle market in China.

“The Chinese government initially overestimated consumer demand for electric vehicles, and has made adjustments to its incentive policies,” says research director John Gartner. “Many members of the emerging middle and upper classes prefer imported vehicles with nameplates from the United States or Germany – especially larger sedans in which owners can sit comfortably while their drivers navigate China’s often congested roads.”

Specifically, China is adjusting its program away from battery electric vehicles to be more inclusive of hybrids and plug-in hybrids. Still, the government will find it difficult to implement its policies, Gartner says. The country’s fragmented regional governments and the close relationships between local governments and local vehicle manufacturers have created problems in implementation, especially for vehicle and technology standardization.

Competing interests, such as companies producing vehicles with proprietary technologies, have already delayed the release of China’s Energy Saving and New Energy Vehicle Industry Development Plan (2011-2020), making it difficult for companies to plan their investment in EV production and infrastructure.

Nevertheless, China’s EV ambitions will provide a huge boost to electric car development worldwide in the long run.

Pike Research’s report, “Electric Vehicles in China,” outlines the market opportunities and challenges for plug-in hybrid electric vehicles and battery electric vehicles in China, and provides an examination of EV battery and charging infrastructure trends in the world’s largest automotive market. The report analyzes government initiatives and policy trends, technology and standards issues, and key industry players in China. Detailed market forecasts for each vehicle category, as well as for EV batteries and EV supply equipment installations, extend through 2017. An Executive Summary of the report is available for free download on the firm’s Web site.