Light-duty plug-in electric vehicles in China: An overview on the market and its comparisons to the United States

The fast-growing light-duty plug-in electric vehicle (PEV) market in China has important implications for both the global vehicle market and energy policies. From the perspective of demand pull-supply push, this study examines China's PEV market by reviewing sales, product performance, and government policies from the last decade; and by comparing it with the market in the United States, the study attempts to generate market dynamics insights to the Chinese PEV market. On the demand side, inexpensive, small-sized PEVs have contributed the most to the recent rapid increase in sales, but this trend is diminishing. The majority of Chinese PEV sales in recent years occurred in economically prosperous regions or cities that are able to supply lucrative monetary incentives and otherwise PEV purchasing and driving privileges to consumers. On the supply side, expansion of the PEV market, incentivized by government policies, enable young, privately-owned automakers to compete with the established automakers. Overall, the PEV market concentration ratio is still small: hundreds of PEV models and new PEV automakers are competing in China; but when it comes to some major local markets, PEV sales are commonly dominated by the local automakers. In the U.S. market, except for Tesla, the vast majority of PEV models are manufactured by established manufacturers of conventional vehicles. Demand-pull policies (e.g. direct monetary purchase incentives) are being transitioned to supply-push policies (e.g. special fuel economy credits for PEVs and PEV sales mandate) which will be major government measures to further stimulate PEV sales with less fiscal burden.