China's NEV industry remains on fast track

At the Shuijiahu freight station in east China's Anhui Province, a batch of newly manufactured new energy vehicles (NEVs) from the BYD Hefei base were slowly entering the carriage, ready to be delivered to regions across China. So far, over 78,000 BYD NEVs have been sent from this station.

Dozens of kilometers away, Joyson safety system (Anhui) Co., Ltd., one of BYD's important suppliers is busy producing intelligent steering-wheels and airbags.

"We built factories here because it's relatively close to the major vehicle plants including JAC, Chery, Volkswagen Anhui and BYD," said Zhang Huawei, head of the company, adding that the output value of this company is expected to exceed 600 million yuan (about $83.74 million) in 2024.

In 2023, BYD was the world's top NEV seller, with more than 3.02 million cars sold during the period.

As for China, data from the China Association of Automobile Manufacturers (CAAM) showed that in 2023, China's auto production and sales both hit a record high to top 30 million units each. During the period, the production and sales of NEVs exceeded 9.58 million and 9.49 million units respectively, ranking first globally for nine consecutive years.

This means that last year in China, on average, about every 3.32 seconds, a new NEV rolled off the production line and a new NEV was sold. Such fast NEV production and sales is supported greatly by the sound NEV supply chains and industrial ecosystem.

At the workshop of Anhui Wangjing Auto Parts Co. in Ningguo City, Anhui Province, workers were working around the new production lines. To meet surging orders, the company has added 21 new production lines in 2023, covering many different parts of vehicles.

"We have attracted over 450 auto parts enterprises to settle down here now and formed a coordinated industrial cluster," said Lai Xianming, deputy director of the economic and information bureau of Ningguo.

With the strong support for the overall supply chain, China's NEV export had surged in 2023, becoming the new engine for the growth of China's auto industry. In 2023, China exported over 1.2 million NEVs, an increase of 77.6 percent year on year.

As China's economy is recovering, the demand in the automotive market continues to grow. In 2024, the export of automotive and NEVs will remain the primary driving force for Chinese automotive industry, said Xu Haidong, deputy chief engineer of CAAM.

Tao Gao from S&P Global Mobility believes that in the past, foreign companies provided the technology while the target market was China, but now, such model is changing. "Now, Chinese brands provide technology while foreign companies provide production capacity and talents, which fully proves that China's NEV industry already has strong creativity," said Tao.

The complete charging infrastructure also injects strong impetus in China's NEV industry. Data showed that in 2023, more than 3.38 million new charging infrastructures were built in China, which means that on average one charging infrastructure was completed every 9.31 seconds. By the end of last year, the number of charging infrastructures had exceeded 8.59 million units in China, up 65 percent year on year.

China also actively promotes the development of automotive aftermarket, which includes transactions and services following the sales of cars. Recently, China has unveiled a guideline to promote the high-quality development of the automotive aftermarket, meeting the diversified demands of consumers.

"The automotive aftermarket services including maintenance, second hand car sales and financial insurance is expected to be the blue ocean of the automotive market, which will also stimulate the consumption potential of new vehicles," said Han Zhen, secretary general of Anhui auto dealers chamber of commerce.