China may achieve NEV penetration of over 50% 10 years early, says ex-industry minister

In October, China’s NEV penetration at retail stood at 37.8 percent, up 7.6 percentage points from 30.2 percent a year earlier.

The rapid growth of China’s new energy vehicle (NEV) sector has exceeded many people’s original expectations. A senior government official said the country could achieve its goal of more than 50 percent NEV penetration 10 years ahead of target.

In 2017, only 777,000 NEVs were sold in China, while they reached 6,887,000 in 2022, said Miao Wei, former minister of industry and information technology and a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC).

NEV penetration in China reached 28.2 percent in 2022, exceeding the 20 percent target China set for its 14th five-year plan (2021-2025) three years ahead of schedule, Miao said, adding that the figure is expected to reach more than a third this year.

The trend of NEVs replacing conventional fuel vehicles is already in place, and the original target of more than 50 percent penetration of NEVs by 2035 is likely to be achieved ahead of schedule by 2025 — by 2026 at the latest, Miao said.

Miao made the judgment at the recent 18th China Automotive Industry Forum, according to a report in local media outlet The Paper today.

In October, China’s NEV penetration rate at retail stood at 37.8 percent, up 7.6 percentage points from 30.2 percent a year earlier and higher than 36.9 percent in September, according to data previously released by the China Passenger Car Association (CPCA).

The penetration rate of local brands of NEVs at retail was 60.4 percent, compared with 19.6 percent for luxury brands and 6.5 percent for mainstream joint venture brands.

In November, China’s passenger NEV retail sales are expected to be around 820,000 units, which will contribute about 39.4 percent of passenger car sales, according to the CPCA’s estimate released on November 24.

China’s local brands contributed 53.1 percent of passenger car sales in the first half of the year, the first time they have outpaced foreign brands, which has long dominated China’s passenger car market, Miao said.

However, Miao also noted that the key to determining future winners and losers lies in the second half of the race, even though Chinese NEVs performed well in the first half.