"Zero Hedge" Finishing by Taylor Deton on April 24, 2024
The smaller, the better, at least when it comes to building electric vehicles for the Asian market.
While less rigorous publications may use the opportunity to make some stereotypical jokes about height, we won't do it, we'll just report that China could dominate the EV market in 2023, according to the International Energy Agency's Global EV Outlook 2024 released on Tuesday.
In fact, according to a recent Reuters report, China accounts for 60% of global sales. The report predicts that by 2030, electric vehicles will account for one-third of China's total car production.
A new report from the International Energy Agency highlights China's growing dominance in the global electric vehicle market, especially among emerging economies in Asia. China is using its extensive industrial capacity to expand the reach of electric vehicles, promoting cheaper electric vehicles in countries such as Thailand, Vietnam and Indonesia, the report said.
According to the IEA report, the key to China's success lies in managing costs:
"We estimate that in China, more than 60% of the electric vehicles sold in 2023 will be priced lower than the average price of an equivalent internal combustion engine vehicle."
"However, in Europe and the United States, the price of electric vehicles is still 10 to 50 percent higher than that of internal combustion engine vehicles, depending on the country and vehicle segment," the report continues. "
According to Reuters, the IEA's report goes on to state that "by 2023, between 55% and 95% of EV sales in major emerging and developing economies will be large models that the average consumer cannot afford, which will hinder the penetration of EVs into the mass market".
"However, smaller, more affordable models launched in 2022 and 2023 are quickly becoming bestsellers, especially as Chinese automakers expand overseas. "
The report highlights China's growing dominance due to the production of affordable electric vehicles, which has proven successful in Asia.
In contrast, European and American automakers are targeting affluent customers and producing higher-priced luxury electric models.
In Asia, countries such as Thailand, Vietnam, and Indonesia, supported by favorable policies and incentives, are rapidly adopting electric vehicles, thereby increasing the market share of Chinese manufacturers.
In 2023, despite the overall contraction of the market, EV sales in these regions will still grow significantly. In addition, China faces challenges such as potential EU tariffs and oversupply in the EV market. The IEA's report suggests that manufacturers in Europe and the U.S. need to focus on reducing costs and improving infrastructure in order to achieve widespread adoption of electric vehicles.