China's new energy vehicle market is poised for strong growth over the next five years, with a compound annual growth rate (CAGR) of 36.1 percent from 2020 to 2025, driven by a number of factors including policy drivers, according to market research firm IDC.
A report released today by IDC estimates that China's new energy vehicle sales will be about 1.16 million units in 2020, with significant growth in 2021-2022 thanks to the post-epidemic rebound in the market and the extension of financial subsidies.
After 2023, as subsidies are withdrawn, the market will drop to a more stable growth level, and new energy vehicle sales will reach about 5.42 million units by 2025, the report said.
China's 2021 new energy vehicle subsidies soar 234% to RMB 37.58 billion year on year
In terms of product mix, the share of pure electric vehicles in the new energy vehicle market will increase from 80.3 percent in 2020 to 90.9 percent in 2025, the report said.
IDC believes that China's new energy vehicle market will be driven by significant growth in 2020-2025, including strong support from national policies, investment from automakers, continued breakthroughs in power battery Technology, the development of automated driving technology and a more open attitude among consumers.
However, there are a number of constraints affecting the development of China's new energy vehicle market, according to the report.
On the consumer demand side, consumers still have a number of concerns about new energy vehicles. For example, mileage anxiety during long-distance driving, battery degradation and safety issues, lack of price advantage after the withdrawal of subsidies, and low residual value of second-hand vehicles are some of the concerns that will create barriers to purchase.
In terms of infrastructure construction, the improvement of charging infrastructure is still a process, and the coverage of public charging piles is far from the level of gas stations, so there is a certain lag in meeting market demand.
With the increasing maturity of new energy vehicle products and the gradual improvement of infrastructure construction, it is expected that the impact of the constraints on the new energy vehicle market will weaken over the next five years, the report said.
China has built world's largest charging network for new energy vehicles
