The EU is playing ‘catch-up’ with China when it comes to electric car sales
September 24, 2018
September 24, 2018
Over the last 17 years, China has led the way for other nations and regions in terms of EV production. The production of EVs in China began in 2001 with the “863 EV Project”. This was the combination of a fuel cell, Hybrid Electric Vehicle, and a pure Electric Vehicle. The growth in the production of new energy cars in China has been evident over the years.
EV sales from Europe and China
During the first half of 2018, an increase of 114% in the production of EVs in China has been recorded as compared to the first half of 2017. To add to these numbers are 49,000 other commercial vehicles, up until this point, which is mostly electric buses and LCVs, 60 % in excess of 2017, June. China is, by a long shot, the world’s biggest market for Plug-in vehicles. According to statistics from EV volumes, 50% of worldwide plug-in vehicles were traded in China in 2018, including passenger vehicles only. For commercial EVs, 70 % of the global volume lies in China and exports of electric buses out of China to other regions are significant.
Plug-in car sales in the EU hit 195,000 vehicles in the first six months of 2018, which is 42 % greater than for the same duration of the year 2017. These incorporate all Plug-in Hybrids (PHEV) and Battery Electric Vehicles (BEV) in Europe. Light commercial cars hit 2.2% in June and 2% for the first six months of the year. The pattern, up until now, shows further increments about 40% during the rest of the year. 51% of plug-in vehicle sales are BEV (pure electric vehicles), the rest being PHEV (Plug-in Hybrids).
Incentives available in China and Europe
The incentives offered per vehicle by the Chinese Central Government explain their dominance in the production and sale of electric cars. In 2017, government incentives were worth up to $15,000 per EV. There are hardly many nations that have gone past China’s efforts to achieve an electric future for the auto industry. Beijing declared a month ago of its plans to wait for the opportune moment to actualize a prohibition on petroleum and diesel cars, following declarations by France and Britain, which said they would ban customary fuel vehicles by 2040, and Germany’s parliament, which has declared a ban by 2030.
Lately, reports have it that the Chinese government could cut those incentives, yet it chose to refresh them with a specific end goal to support longer range vehicles. A few cities in China offer their own incentives, yet the changes came through the finance ministry at the national level. Electric vehicles with more than 400 km (249 miles) of range received a 13% increase in incentives, which is around $7,800.
In addition to giving incentives to producers of EVs, China has equally given incentives to consumers who buy EVs. Depending on the assortment, China’s Central Government has waged subsidies from around $3,000 to $6,600 per vehicle, and most local governments have added an extra 15% to 50% to that sum. In this way, the total government incentives on buying an EV with a scope of 250 kilometers (150 miles) or more has been about $10,000.
Incentives for EV are currently applicable in most European nations. The incentives mainly comprise exemptions and tax reductions, as in countries such as Austria or Germany, and extra installments and premiums for the buyers of EVs in France and the UK.
The European auto industry bolsters the further presentation of financial incentives for Eco-friendliness. Tax measures are a critical apparatus in forming consumer request towards eco-friendly vehicles and help make a business opportunity for breakthrough innovations, remarkably through the presentation stage. Developments for the most part initially enter the market in low volumes and at a huge cost premium, and this should be counterbalanced by a positive strategy framework.
Why is the EU playing catch-up?
Electric mobility will make a vital contribution towards guaranteeing feasible mobility. However, advanced traditional advancements, engines, and forms of energy will assume a prevalent part for years to come. Governments must keep on including these CO2 effective innovations and solutions in their general sustainable mobility strategy approach.
In all of the following factors: computerization, electrification, and sharing of vehicles, Europe is playing catch-up in this race. China has by now, established seven times extra investments in EV production than the European region has, during the past one year. According to public declarations, China has obtained in excess of € 21.7 billion in investments to manufacture EVs whereas the European region only achieved € 3.2 billion. Leaders like the Volkswagen, Nissan and Daimler AG have given the majority of the interest in China, steered by the EV program. This strategy requires vehicle manufacturers to acquire recognition for the generation of electric vehicles that are equal to 10% of all passenger vehicles in 2019 and about 12% by the year 2020.
For Europe to harvest the monetary, employment, and climatic advantages of the change to clean transport, it has to embrace a dynamic strategy that effectively inspires investment in the production of plug-in cars in Europe. The best method to accomplish this is to build up a sizeable market for plug-in autos here in Europe. This will probably be achieved through the local manufacture of vehicles, instead of a specialty market which can be economically met by importing cars.
New laws and regulations to help in the production of EVs
A recent meeting by EU environment officials in Luxembourg involved the new CO2 rules in the EU for vehicles, the key directive that will characterize the stride of the clean transport progress in Europe by the year 2020. An advanced 2025 goal of 20% carbon dioxide decrease, plus a sales mark for almost zero emission cars will come in handy to push the market in the EU that is currently on a stand-still through an absence of supply. Member nations can likewise bolster the development in plug-in car production locally in the EU through the venture of recharging infrastructure and change of vehicle duties. Solid approaches can assist Europe with retaining its worldwide initiative in the automotive business. With powerless targets, it is highly possible that the EU’s key sector will be seized by China.
Both the EU and China have put in place regulations to help in the production of EVs. The cost of owning an electric auto is predicted to equal that of petroleum vehicles this year across Europe due to reduced production costs and low yearly maintenance costs for electric vehicles. The venture bank UBS has raised its projections for worldwide electric vehicle sales by 50%, anticipating that electric vehicles will represent one out of three vehicles sold in Europe by 2025.
The UK annual budget for 2017/2018 included a huge package to make the UK a leading manufacturer of EVs. The package includes £200 million of government venture, matched by private investors, to support a £400 million fund to finance the growth of charge point firms in the UK. The government has also allocated a £100 million grant for the Plug-In Car being a part of the National Productivity Investment Fund. This fund is meant for helping consumers with the initial cost of battery electric cars. The UK has also come up regulatory steps to speed up the deployment of charging arrangements.
In China, the government intends to come up with 900,000 charging stations, which are as of now being implemented. This will support the presence of five million electric vehicles by 2020. In Germany, the Federal Government is giving 1bn under the National Strategy Framework for Developing Infrastructure for Alternative Fuels, which was embraced in November 2016, with a goal to accomplish a move towards elective fuel-controlled mobility. Financing is provided for, specifically the extension of the public charging system for and procurement of EVs as part of the German Clean Air Program and also hydrogen fuelling structures under the National Hydrogen and Fuel Cell Technology Innovation Program.
China’s efforts to become the leading nation in the manufacture of EVs has to be applauded. However, it has not come as a surprise, especially given the overall economic growth the country is going through. Given its vast strides in the EV industry, the EU and regions should look up to China for examples of the dos and don’ts of this industry. In the coming years, the adoption of EVs will have an impact which will be visible regarding air pollution in the world’s major cities.