Expectations are high for electric vehicles in China

Ashley Tan
China's electric vehicle market will see 'fierce competition'
China's electric vehicle market will see 'fierce competition'

Electric vehicles appear to be gaining further ground in China's automobile market, and companies are betting that the trend will continue.

An example of that optimism, is Chinese ride-sharing giant Didi Chuxing's announcement last week that it plans to set up an e-vehicle sharing service with 12 automakers. Those automakers will include both Chinese players, such as Geely and BYD, as well as a couple of foreign firms, like South Korea's Kia Motors, and the Renault-Nissan-Mitsubishi Alliance.

Didi, which bought out Uber's China operations back in 2016, also said it would be opening up its ride-hailing platform to the automakers' own sharing services.

So far, the introduction of electric vehicles in the Chinese automobile market has seen strong sales figures.

"Sales volumes for new-energy vehicles exceeded 700,000 last year, and this number is further expected to increase to more than 2 million in 2020, and to more than 5 million in 2025," said Kevin Li, a China-based senior analyst at Strategy Analytics.

He added there would be fierce competition between those vehicles and the traditional automobiles about seven to eight years down the road.

Sales for e-vehicles have also been so strong, he said, that the government even had plans to reduce and cancel local subsidies for their production and sales last December.

However, that has not stopped many automotive start-ups from continuing to work on research and development and the production of new electric vehicles to cater to the rising demand, he added.

Aside from Didi, Japanese automaker Nissan already has designs on the market. Nissan said earlier this month it plans to sell its all-electric Leaf in China this year and plans to develop 20 electric models with its Chinese partner over the next five years.

Just last October, electric automaker Tesla also struck a deal to build a factory in Shanghai that would focus on making Model 3 sedans and Tesla's planned crossover vehicle, the Model Y, for China and for some surrounding countries.

—The Associated Press contributed to this report.