EVs will account for 35 per cent of car sales in China next year as growing range of electric models lures motorists, says Fitch Ratings

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New-energy vehicle sales will see strong growth as more motorists ditch their petrol cars, says the credit rating agency

‘With the entry of more new brands, next year will be a year of fierce competition,’ says Fitch

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Electric cars will account for over 35 per cent of sales of vehicles next year in mainland China, according to Fitch. Photo: EPA-EFE

Yujie Xuein Shenzhen

Published: 7:41pm, 24 Nov 2022Updated: 7:46pm, 24 Nov 2022

New-energy vehicle (NEV) sales will maintain their strong growth in China next year as more motorists ditch their petrol cars in favour of an expanding range of electric options, Fitch Ratings predicts.

Electric cars will account for over 35 per cent of sales of passenger vehicles next year in mainland China, up from an estimated 27 per cent share this year and 15 per cent in 2021, according to the credit rating agency.

“2023 will be a year when the new-energy vehicle industry will continue to flourish in China,” said Yang Jing, director of Asia-Pacific corporate research during a webinar on Thursday. “With the entry of more new brands, next year will be a year of fierce competition.

“In the medium and long term, China’s auto market is accelerating its electrification progress. Consumers’ acceptance of new energy vehicles is increasing, and auto companies are constantly turning to produce new energy vehicles.”

Fitch predicted the growth of China’s overall passenger vehicle market might experience a slight dip in 2023 as sales of petrol cars drop sharply. Demand for traditional cars is likely to be subdued because the Chinese government’s move this year to cut taxes to rescue the industry from its Covid-19 slump means demand has been met in advance.

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Chinese two-seater ‘flying car’ makes first public flight in Dubai

However, the passenger NEV market will maintain steady annual growth of over 30 per cent, Fitch forecasts, as the Ministry of Industry and Information Technology’s decision to end NEV subsidies by the end of this year will have a limited impact on demand.