Carmakers eye up EV market in China

Foreign and domestic companies are ramping up investment in EVs after government campaigns

A raft of new subsidies and incentives for new energy vehicles is causing automakers of all shapes and sizes to take notice. Toyota, Nissan, BYD, FAW, Tesla and GAC have all unveiled plans to capitalise on China’s fledgling National Electric Vehicle (NEV) market.

Nissan has targeted 20% of the nation’s EV sales with its popular Leaf model, which is already the world’s biggest selling EV.

The company predicts the market for electric vehicles could rise to between 100,000 and 400,000 vehicles a year by 2017 to 2018. The Japanese auto giant will start production at a new plant in Dalian, northeast China, that will have an annual production capacity of 150,000 units. An official report claimed only 17,500 NEVs were sold in last year, but predicted that number would rise to 35,000 in 2014.

Fellow Japanese carmaker Toyota is looking to China to source at least half the components in its gasoline-electric hybrid systems for its Corolla and Levin cars, which will come online next year. Toyota already manufactures the popular Prius and Camry models in China using kits imported from Japan and is hoping the latest move will help cut down on import duties.

Closer to home, China FAW Group Corp has announced plans to take 15% of the domestic EV and plug-in hybrid market by as early as 2020. The cars will be priced between 219,800 to 258,800 yuan ($35,200 to $41,400). As a state-owned automaker, FAW will be able to capitalise on government incentives for new energy R&D.

Meanwhile, fellow domestic automakers Guangzhou Automobile Group Co and BYD have signed an investment agreement to establish an NEV joint venture. The venture would develop EVs, hybrid passenger cars, commercial buses and key components.

Tesla Motors Inc has also pledged “hundreds of millions of dollars” for building charging outlets in China, which it believes could become its sole largest market as early as next year. The luxury EV maker will face both growing competition from other upscale foreign offerings, such as BMW’s i3.