ECG — 2024-02-06
News from ECG
China’s Automotive Industry Advisory Committee had strong words to China’s homegrown automotive industry. Growth that was reached in 2023 is just not enough. The new ‘Race to Change Lanes-China’s Road to New Energy Vehicles (in the Fast Lane)’《换道赛车（新能源汽车的中国道路》states that between 2025 and 2026, alternative fuel vehicles should dominate 50% of the new vehicle market in China. By 2035 China will see the era of electric vehicles, where new vehicles will be electric. Meanwhile the author of the report, Minister Miao Wei, previously of the Ministry of Industry & Information technology (MIIT), stated that while traditional fuel vehicles can continue to fuel exports, these trades must be part of a longer-term plan, bringing about a strategic layout for the future. A future where NEVs play the top role.
And what this means for those watching the export market, is that while at home China’s boost in momentum for new energy vehicles (NEVs) defined as plug in hybrid electric vehicles (PHEVs), pure battery electric vehicles (EVs) and fuel cell vehicles (FCVs) has a number of new ambitious policies announced already in January this year, the push to expand exports will also move to develop bases overseas and indeed to bring a greater proportion of alternative fuel vehicles from China to the world beyond. While we see this with exports of NEVs to Europe, it will be interesting to see how Chinese OEMs strengthen the uptake of NEVs in their strongest export markets.
In 2023 new vehicle exports from China have hit 4.91 million units as per the China Association of Automobile Manufacturers (CAAM) while the China General Administration of Customs (CGAC) states that new vehicle exports have hit 5.22 million. Suffice to say around 5 million new vehicles from China were exported last year.
The top markets for new vehicle exports from China are led by Russia, followed by Mexico. Both these markets continue to demand traditional internal combustion engine (ICE) vehicles in vast quantities. January to November data shows that new vehicle exports to Russia have risen over 419% to 841,000 units. Meanwhile, exports to Mexico hit 376,000 units in the January to November 2023 period, up over 48% on full year 2022 volumes!
But it is the demand in Europe that China’s Automotive Industry wants to strengthen. New vehicle exports to Belgium, the gateway to Europe, reached over 202,000 units in the first 11 months of 2023. This marks a huge 81% increase over full year 2022 direct exports to Belgium. And approximately 80% of exports to Belgium are new energy vehicles. Direct exports to the UK and Spain are also strong, and again the majority of new vehicles imported from China in these two countries are alternative fuel vehicles. Direct exports to the UK hit over 195,000 units in the January to November 2023 timeframe while exports to Spain hit 124,000 units.
But can we, here in Europe, boost EV sales as fast as China? Miao Wei’s policy framework pushes for extreme fast tracking of the age of NEVs, as well as the age of transformation from ‘functional cars’ to ‘smart cars’. Already in November 2023 ministries across China allowed L3 & L4 autonomous vehicles on main roads under certain conditions, while on 15 January 2024 ‘vehicle road cloud integration’ was promoted allowing smart cars to get even smarter.
Domestic sales of new vehicles within China hit 25.18 million units in 2023, marking an increase of 6%. Total new vehicle exports from China hit 4.91 million, up 57%. Therefore in total China’s new vehicle sales hit 30.09 million units in 2023, marking an increase of 12%.
But of this vast quantity, NEV sales hit 9.49 million units. A solid increase of 37%. Of this, 1.15 million NEVs were exported, up 76%.
The volumes are huge. But not good enough, the China Automotive Industry Advisory Committee stated. There needs to be more growth in both the domestic and export markets, and specifically the push to NEVs.
ECG Members may read more on the latest update of the Vehicle Exports from China by VOLUME