China Electric Car Boom Driven by State Buying, Bernstein SaysBy
Government purchases made up almost half of annual sales
Consumer demand centered in Beijing, Shanghai and Shenzhen
China’s fourfold surge in electric-vehicle sales last year was probably driven by government purchases, with individual demand restricted to the nation’s biggest cities, according to Sanford C. Bernstein.
Government-directed purchases accounted for almost half of the 185,900 electric vehicles sold last year in China, Bernstein analysts Robin Zhu and Yang Liu wrote in a report Tuesday, citing vehicle registration data. Beijing, Shanghai and Shenzhen made up 73.5 percent of registrations in 2015 and demand from individual consumers for such vehicles remained “negligible” outside of the three cities, according to the report.
“We come to the conclusion that the Chinese government will need to significantly step up its direct buying of EVs in order for the country to reach 5 million cumulative EV sales by 2020,” Zhu and Liu wrote in the report. “Unless the economics of EVs were to improve significantly versus current levels, we’d argue the demand for these vehicles will need to come from the Chinese government itself.”
China has set a target to have 5 million of what it calls new-energy vehicles on its roads by the end of the decade. The government has found them to be a tough sell even after offering companies and consumers subsidies and exempting users from onerous ownership and traffic restrictions in places such as the capital and Shanghai. Slow adoption has been attributed to higher costs and the inconvenience of powering up the vehicles, which the government has tried to resolve by encouraging private capital to build and operate charging facilities.
Among the top 10 electric car models, BYD Co.’s E6 stood out with about 62 percent of purchases by taxi fleet operators, while more than half of sales for SAIC Motor Corp.’s Roewe 550 were to non-individual buyers, according to the Bernstein report.
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