Why China is luring rural customers to switch to electric vehicles


China, the world’s largest electric vehicle (EV) market, has a problem – sales of new energy vehicles, including pure electric vehicles and plug-in hybrids, have not had the momentum they used to. While demand for green cars remains green, the slowdown in demand growth is a concern. As a result, the Chinese government is now considering bringing such vehicles to the country’s hinterland.

File photo for representational purposes.

Electric vehicle sales in China will double in 2021 and 2022 compared to previous years. But this year, sales are expected to rise around 31%. In a country where the transition to new-age cars has been fairly rapid, that figure may be good but not huge. The state-run Global Times reported on Thursday that plans were being considered to stimulate demand for such vehicles in rural areas of the country.

The report highlighted that some 1.84 million pure electric vehicles were sold in the first four months of the past year, and if the same momentum continues, sales in 2023 may pale in comparison to 2022. What are the possible solutions? Tap the rural market!

charging challenge

The focus is on developing and expanding charging infrastructure in remote areas of China. To this end, the country’s top economic planners, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA), are looking to join forces and work quickly. “Insufficient public charging infrastructure, difficulties in installing and sharing charging facilities in communities, and contradictions between supply and demand have restricted the consumption potential of new energy vehicles in rural areas,” a document on the National Development and Reform Commission’s website said.

Also read: Tesla China brings Superchargers to Everest Base Camp

buy and earn

Local governments are increasingly being urged to consider and roll out financial incentives not only for building EV infrastructure but also for buyers of new energy vehicles. EV manufacturers are also advised to diversify their product portfolios to ensure EVs are tailored to the requirements of rural buyers. A key area of ​​focus is also incentivizing used car sales.

The measures are expected to boost EV sales at a time when EV penetration in China’s rural areas is only a norm for overall numbers. But the past was not without effort. In 2020, some of China’s top government agencies launched a campaign to promote alternative energy vehicles in remote parts of the country, urging local governments to develop constructive policies for infrastructure and local buyers. efficient. At least to some extent. It is reported that from 2020 to 2022, the sales volume of new energy vehicles in small towns and villages across the country is about 4.1 million, of which local electric vehicle manufacturers account for the main share.

But in the bigger picture, there is a strong belief that the adoption of electric vehicles in China will require greater investment from rural buyers, a task that is easier said than done.

First published date: May 18, 2023 at 15:11 PM CST


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