C: Electric Vehicles


China leads the world in deployment of electric vehicles. At the end of 2021, almost half the electric cars and 95% of electric buses and trucks in the world were in China. China also dominates global markets for electric two- and three-wheelers.22

Figure 16-1: World Electric Car Stock

Source: IEA, Global EV Outlook 2022 at p.1623

In 2021, 3.5 million electric vehicles were sold in China, of which 3.3 million were passenger cars. Electric car sales were 16% of total car sales. As of the end of 2021, roughly 7.8 million electric vehicles were on the roads in China, accounting for roughly 2.6% of total vehicles. 24

The growth in electric vehicle sales continued during the first half of 2022. From January through June 2022, 2.6 million electric vehicles were sold – a 120% year-over-year increase. Electric car sales reached 24% of total car sales.25

Figure 16-2: Electric Car Sales in China (2010-2021)

Source: IEA, Global EV Outlook 202226

The foregoing figures do not include either electric bicycles or low-speed electric vehicles.

  • Electric bicycles are omnipresent in China today. More than 325 million electric two-wheel scooters and motorcycles are on the roads, with roughly 47 million new units sold each year.27 Most use lead-acid batteries, but lithium-ion batteries have steadily gained market share.
  • As of year-end 2021, roughly 10 million low-speed electric vehicles (LSEVs) were in use in China. (These have approximately the size and performance of electric golf carts.) In recent years, sales have averaged roughly 2 million per year: Hebei, Shandong and Henan have seen the most sales of LSEVs.28 These LSEVs generally have top speeds of no more than 70 kilometers (40 miles) per hour, short ranges and lead-acid batteries, and are not counted in tallies of NEV sales. Due to the wider variety of low-cost mini-EVs in smaller cities, LSEV sales may peak and decline in the coming years.

The number of EV charging stations in China is growing rapidly. In January 2022, the Chinese Electric Vehicle Charging Infrastructure Promotion Agency (EVCIPA) reported 2.6 million EV charging posts in China (a 47% increase in one year). Of these, roughly 1.1 million were public chargers, of which 470,000 were DC fast chargers. Charging station numbers are much larger in the wealthy coastal provinces where EV mandates and incentives have been strongest: Of the more than 74,000 total public charging stations, over half were located in the five provinces or municipalities of Guangdong, Jiangsu, Zhejiang, Shanghai and Beijing. The top three charging station operators accounting for over half of public charging stations were TELD, State Grid and Star Charge.29

Battery swapping stations are also rising rapidly, led by NIO which now uses battery swapping in a number of its vehicles. At the end of 2021, there were 1,298 battery swap stations in China. Nearly a quarter of these stations were in Beijing, with many in Guangdong Province as well. Almost all battery swap stations are owned by NIO (with 789 stations), Aulton (with 402) and Hangzhou First Technology.

Prices for public charging or battery swapping are regulated, typically using the industrial electricity price plus a maximum service fee with time-of-use price differentials. Each province sets its own public charging price. Prices range from RMB 0.4/kWh to RMB 2/kWh, with RMB 1.5/kWh ($0.23/kWh) as a typical mid-price. Home charging in China generally employs the residential electricity price.30

There are dozens of EV manufacturers in China and, according to some reports, the quality of Chinese EVs was initially uneven and Chinese EVs often had low driving range.31 The Chinese industry has grown and evolved rapidly in the past four years, and today there are a number of long-range luxury Chinese EVs on the market. This includes battery-swap pioneer NIO, Xpeng, Polestar (a subsidiary of Geely-owned Volvo) and MG (a British brand now owned by SAIC) that manufacture mid- to high-end EVs at volume for both the domestic and export markets. China’s EV market has been described as having a barbell pattern, with large numbers of vehicles at the high- and low-ends, and fewer vehicles competing for ordinary, middle-priced vehicles.

Foreign automakers have also participated in China’s EV market. Tesla opened its Shanghai factory in 2018 and now manufactures almost as many vehicles in China as in the US (The Tesla Model 3 is China’s #2 top-selling EV, after the Hongguang mini-EV.) At the time of Tesla’s Shanghai launch, China removed its joint-venture requirements for foreign automakers. China’s top-selling EV, the Hongguang mini-EV, is a product of the joint venture between GM, SAIC and Wuling.

Fuel cell electric vehicles

In 2021, 1586 fuel cell electric vehicles were sold in China, bringing the country’s total fuel cell electric vehicle fleet sales since production started in 2015 to 8938.32

Most FCVs are buses or trucks. China dominates the market for fuel cell buses worldwide, accounting for a total of 3,300 fuel cell buses as of 2021, or two-thirds of the cumulative worldwide sales. China has also scaled up its deployment of hydrogen vehicle charging infrastructure, adding 100 new stations in 2021 for a total of 218 hydrogen fueling stations.33

Several cities have established pilot programs for fuel cell vehicles and hydrogen fueling infrastructure—and most policies aimed at hydrogen specifically focus on fuel cell vehicles. Beijing and Zhangjiakou included fuel cell buses and fueling infrastructure in the 2022 Winter Olympics plan, and Beijing plans to have over 10,000 fuel cell buses and 74 hydrogen fueling stations by 2025.34 Many other cities have adopted hydrogen development programs that focus on fuel cell vehicles. Stand-outs include Chengdu, which plans to have at least 3,000 fuel cell vehicles and 30 hydrogen fueling stations by 2025,35 and Datong, which has a target of 6,300 fuel cell vehicles and 50 hydrogen fueling stations by 2025 followed by 57,000 fuel cell vehicles by 2030.36


“Developing new energy vehicles is essential for China’s transformation from a big automobile country to a powerful automobile country. We should increase research and development, seriously analyze the market, adjust existing policy and develop new products to meet the needs of different customers. This can make a strong contribution to economic growth.”—President Xi Jinping (May 2014, visiting an electric vehicle factory in Shanghai)37.

The Chinese government strongly supports electric vehicles. Central government policies include:

  • a target of 5 million electric vehicles on China’s roads by 2020 (a target missed, albeit barely, with 4.92 million NEVs registered by year-end 2020);38
  • a target of 20% NEV sales share by 2025;39
  • EV quotas for vehicle manufacturers and importers;
  • manufacturing subsidies;
  • tax exemptions;
  • government procurement;
  • support for the construction of electric vehicle charging stations.
    Many provincial governments also support electric vehicles, with preferential access to license plates and other incentives.

The goals of these policies include: cleaning the air in China’s cities, reducing China’s oil imports, positioning China for global leadership in a strategic industry and helping to meet President Xi’s carbon neutrality goal.40

The Chinese central government’s principal policies to promote electric vehicles include the following.

1. New emissions vehicle mandate. Starting in 2019, each Chinese passenger vehicle manufacturer and importer was required to make or import at least 3.8% electric vehicles to meet the 10% NEV credit requirement, assuming a corporate average electric range of 200 km. The credit required increased to 12% in 2020 and, with a more stringent conversion rate, increased to 14% in 2021, 16% in 2022 and 18% in 2023, though vehicles with long ranges can qualify for extra credit. These regulations apply to any company that manufactures or imports more than 30,000 passenger vehicles in China. Companies that fail to achieve the required percentages may purchase credits from companies that over-comply. The target for 2025 is for 20% NEV sales. (This target was achieved in the first half of 2022.)41

2. Subsidies. The Chinese government provides subsidies to manufacturers of electric vehicles.

    • All-electric plug-in cars with a range over 400 km are eligible for subsidies of RMB 12,600 (approximately $2000).
    • All-electric plug-in cars with a range of 300–400 km are eligible for subsidies of RMB 9100 (approximately $1400).
    • Plug-in hybrid cars are now eligible for subsidies of RMB 4800 (approximately $750).42

All-electric plug-in cars with a range of less than 250 km are no longer eligible for subsidies.

All subsidies for the manufacture of plug-in electric cars were scheduled to be eliminated in 2021, though this was extended to the end of 2022.43 Subsidies for plug-in electric buses are being reduced as well.44

3. Tax exemptions. The Chinese government exempts electric vehicles from consumption and sales taxes, which can save purchasers tens of thousands of RMB (equivalent to thousands of dollars).45

4. Procurement. The Chinese government also uses its procurement power to promote electric vehicles. A May 2016 order requires that half of new vehicles purchased by China’s central government be new energy vehicles within five years.46

5. New auto factory requirements. Chinese regulations strongly discourage the construction of factories for manufacturing internal combustion engine vehicles only. Subject to exceptions that are difficult to satisfy, any new vehicle factory is required to include capacity for the construction of electric vehicles.47

6. Support for charging infrastructure. The Chinese central government promotes the development of EV charging infrastructure as a matter of national policy. It sets targets (120,000 EV charging stations and 4.8 million EV charging posts by 2020), provides funding and mandates standards. In 2022, the government also required all new communities and workplaces to have EV charging installed.48 In addition, many provincial and municipal governments promote EV charging infrastructure with financial incentives and requirements that building owners provide EV charging. China State Grid and China Southern Grid, China’s two state-owned electric utilities, both have programs to promote the development of electric vehicle charging infrastructure.49

7. Support for fuel cell electric vehicles. In 2018, the Chinese government began offering a subsidy of up to RMB 200,000 (roughly $29,000) for fuel cell electric cars and RMB 500,000 (roughly $72,500) for fuel cell electric trucks and buses.50 These subsidies have now ended and been replaced by demonstration programs in pilot cities to be selected by the central government.51 As noted, several cities have their own fuel cell vehicle programs.

Figure 16-3: Number of Public Charging Stations in China (2015-2021)

Source: China Electric Vehicle Charging Infrastructure Promotion Alliance52

Many Chinese provincial and local governments are very active in promoting electric vehicles as well.

  • Many municipalities provide license plates for electric vehicles much faster and cheaper than for conventional vehicles. (In Beijing, for example, plates for electric vehicles can be obtained in months, while plates for conventional vehicles can take years. In Shanghai, plates for electric vehicles are free, while plates for conventional vehicles cost more than $12,000.)
  • Free and preferential parking spaces for electric vehicles are common.
  • Many large Chinese cities restrict passenger cars from driving on certain days based on their license plate number but exempt electric cars from such restrictions.
  • Some municipalities pay local manufacturers subsidies for electric vehicles.
  • Shenzhen’s entire taxi fleet is all-electric.
  • In March 2019, Hainan provincial officials announced that the sale of fossil fuel cars would be banned in the province starting in 2030.53

The provincial and municipal government policies play an important role in the development of China’s electric vehicle market.

Chinese government policies with respect to electric vehicles are set forth in a number of documents, including the New Energy Vehicle Industry Development Plan 2021–2035 (October 2020).54

Impact on CO2 Emissions

What impact do electric vehicles have on China’s CO2 emissions? Though the majority of China’s electricity comes from coal, carbon emissions from EVs are generally lower on a life-cycle basis than internal combustion vehicles due to the greater efficiency of electric vehicles.

  • The IEA estimated that electric vehicles in China avoided 30 MT of CO2 emissions in 2018.
  • The ICCT in 2021 estimated that in 2020 EVs would have life-cycle emissions 37–45% lower than internal combustion vehicles in China, whereas for 2030 EVs would offer life-cycle emissions 48–64% lower than ICE vehicles.55
  • In 2021, the China Automotive Technology & Research Center (CATARC) estimated per km life-cycle emissions of 2020 hybrid passenger vehicles as 18% lower, plug-in hybrids as 12% lower and pure EVs as 39% lower than ICE vehicles.56 The CATARC study notes that the emissions reduction and water-saving benefits of EVs will rise steadily towards 2060.

The CO2 impacts of electric vehicles likely vary within China depending on where and when the vehicles are charged. China’s electric generation is more carbon intensive in the north than in the south, for example, and renewable output varies by time. A 2022 study of EV smart charging in China showed that timing charging could enable a 20% reduction in well-to-wheel heat-trapping gas emissions while also reducing the need for new charging infrastructure.57

Electric vehicles have the potential to significantly reduce CO2 emissions from the Chinese vehicle fleet as the carbon intensity of China’s power sector declines in the decades ahead. In the medium- to long-term, vehicle electrification will be important to meeting the Chinese government’s goals for a low-carbon economy.


IEA, Global EV Outlook 2022 at pp. 14, 29, 36.
IEA, Global EV Outlook 2022 at p.16
IEA, Global EV Outlook 2022 at p.16
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Guide to Chinese Climate Policy