‘High quality, low price and dizzying variety’: how the Chinese switched to electric cars | Electric, hybrid and low-emission cars

When Kenzi, an advertising worker in Shanghai, bought an electric vehicle in November she wasn’t even thinking about the environmental benefits. She had read Elon Musk’s biography and thought the Tesla 3 looked good. She also knew that if she bought an EV she could bypass the long wait and cost of getting licence plates, which are rationed by the government.

“It’s not easy to get a licence plate in Shanghai, but you get a licence for free when you buy an EV,” she said.

“The country has … an annual sales of electric vehicles target. But for consumers, honestly, they don’t think too much about protecting the environment. The bigger reason is because everyone is buying [EV] and it’s becoming a trend.”

Kenzi’s new car brought her into the growing club of EV owners in China, the world’s largest economy, its biggest carbon emitter, and now the largest EV market. A 2023 report by the International Energy Agency suggested that more than half the world’s EVs are in use on roads in China.

China’s EV production and take-up is one of the biggest success stories in global markets. Between 2021 and 2022 EV sales in China grew from 1.3m to 6.8 million – accounting for more than a third of the world’s EV sales in 2022.

China is the world’s biggest single carbon emitter, producing 33% of the world’s total in 2021. Transport accounts for about 10% of China’s emissions.

The Chinese Communist party (CCP) government has set a goal of peaking its emissions by 2030 – and recent reports suggest they may be getting there sooner – with part of its plan to have new electric vehicles make up 40% of cars on the road by the same time. As of June 2022 there were 312m civilian vehicles, of which battery electric cars comprised about 3.2%. The most popular EV is a Tesla, but the domestic brand BYD is close to edging it out of the top spot.

China’s EV industry has exploded thanks to years of government subsidies and tax breaks, and major intervention in development of technology and infrastructure, as well as policies designed to encourage buyers – like the free licence plates.

The CCP has has the authoritarian power to impose significant policies and market interventions to help it reduce emissions and meet its renewable energy goals, and that’s exactly what it’s done with the EV industry. In 2001 the CCP listed EV technology research in its agenda-dictating five-year plan, and has aimed to have EVs make up 45% of all new car sales by 2027. Between 2009 and 2022 billions of yuan in subsidies and tax breaks were injected into the market, and roadside infrastructure is comprehensive in Chinese cities.

On the outskirts of Chongqing is a gleaming, expansive complex home to the global R&D centre of Changan, a carmaker. It is a shining example of the Chinese automotive industry’s pivot. The state-owned Changan was founded in 1862, and is now linked with Mazda and Ford in joint ventures.

Today, Changan is the eighth-largest EV producer in China, and its showrooms are filled with models including toy-like city compacts, luxury branded sports cars and large hybrid SUVs, powered by CATL batteries and Huawei technology. It plans to end production of internal combustion engine vehicles by 2025 to focus solely on electric and hybrid cars.

The marketing of EVs in China rarely, if ever, focuses on the environmental benefits. Every owner the Guardian spoke to said cost was the number one factor in their decision.

In Shanghai, a 32-year-old finance worker named Rui Rui said he had saved about 100,000 RMB (about £10,650) just on licence-plate fees alone by buying an EV.

“Moreover, fuel costs are more expensive, but electricity is cheaper in China.”

The true level of environmental benefit from EVs is still somewhat debated. Studies have found the impact of manufacturing them is worse than conventional cars, but that over time the emissions savings offset that initial hit.

A study published in Nature magazine earlier this year examined the impact of electric vehicles on air quality in Beijing, Shanghai, and Shenzhen.

It also found corresponding decreases in the air-quality index (which measures pollutants) in regions with increased frequency of private EV travel, “suggesting a positive correlation” in urban areas. However, in Beijing and Shanghai, where power generation is still largely coal-based, the study found an increase in nitrogen dioxide concentrations potentially linked to the electricity consumption of EVs.

The study, by researchers from the Massachusetts Institute of Technology and Beijing Institute of Technology, found “a notable carbon reduction effect when battery electric vehicles replaced fuel vehicles over equivalent mileages”, and projected “substantial emissions reductions” over the next decade as the ratio shifts to reach China’s goals.

“The 45% target is achievable as long as Xi Jinping decides it’s worth continuing to support the EV industry,” said Dr Tinglon Dai, a professor of business at Johns Hopkins University.

“EVs happen to be one rare area where China seems to be leading the world – high quality and low price, not to mention dizzying variety. This is one of the incredible opportunities for China to dominate a highly respected marketplace. And it’s also in line with broad environmental goals in the west.”

However, Dai said it would be a mistake to think Xi is pushing EVs purely for the climate, or even the economy.

“It’s more of a geopolitical move – a way to get to the top of the food chain of a high-end, high-status industry,” Dai said. “It’s worth it even if they lose money – and they don’t seem to be losing money right now, given the incredible economies of scale.”

The environmental benefits of EVs in China may not have been a priority, but are an added bonus, for the buyers as well as the government. Kenzi doesn’t drive her Tesla often – only on weekends to take her puppy for walks away from the city. But she’s noticed a difference. “Electric vehicles can reduce carbon emissions, and many petrol car brands have started to develop electric vehicles as part of the state’s requirement,” she said.

“I really feel that after I bought an electric car, plus with more and more electric vehicles on the road, car emissions are not so serious any more. The pollution is much better.”

Additional reporting by Chi-hui Lin