It is undeniable that electric vehicles (EVs) have grown in popularity and become more mainstream during the past decade. In fact, the world’s top carmakers are reportedly planning to spend nearly US$1.2 trillion through to 2030 to develop and produce millions of EVs. IHS Markit expects that EVs will make up about 60 to 80 per cent of all new car sales by 2050. This magnitude means most carmakers and countries will not be able to ignore this fast-growing phenomenon. For those looking to join this exciting ride, there is much to learn from China. The country is already the world’s biggest market for EVs based on annual sales, and it is also ahead of the game when it comes to infrastructure. BloombergNEF’s Zero-Emission Vehicles Factbook 2022 calculated that cumulative investment in EV charging hardware and installation reached US$62 billion at the end of 2022, of which 61 per cent is attributed to the more than 600,000 public chargers built in China. This trajectory is unlikely to change or even slow down any time soon. A recent survey by Fidelity International highlighted that the penetration rate for EVs in the world’s most populous country could be set to further accelerate significantly thanks to technological advances in the field, gaining a much bigger share of mainstream auto sales going forward. The study revealed that around 60 per cent of current car owners in China and 84 per cent of non-owners would prefer an EV to an internal combustion engine model for their next purchase. This is a significant percentage and highlights the fact that we could potentially see EVs dominate the roads in China in the near future. It is hard to dispute that China is ahead of the curve. There is much the world can learn from observing its boom in EV adoption . For one, while environmental benefits are a motivating factor when it comes to EV adoption, car performance and technology are the main draws. An improved driving experience brought by technological progress, design and trendiness are all key factors for the rising popularity of EVs. Brand loyalty also seems to fall behind technology and performance when it comes to EV adoption. What this means is that companies will need to adapt by providing faster iterations of technology and models. Those that cannot keep up with the pace of software development will eventually be outcompeted in the long term. But this does not necessarily mean that technological companies or pure EV producers will be the ones to succeed in this market over traditional manufacturers. There needs to be the magic combination of the right channels, marketing, production positioning and cost structure to achieve success. For more premium EVs , tech companies can use their software advantage as a differentiator. However, for the mass market, the focus will be on the fundamentals of how cheap and reliable companies can make their EVs. While there are many draws, there are also significant concerns when it comes to EV adoption. Worries about technological limits affecting battery life , charging, driving range and mileage are all legitimate. Moreover, without the proper infrastructure in place, it will be difficult for EVs to move into the mainstream. China’s position as a front-runner is thanks in large part to the country’s policies. For years, the government has provided tax cuts , subsidies and funding to promote EV adoption. One particularly useful strategy is offering incentives to local industries. The United States is also doing so, which is a step in the right direction and should continue until local companies are self-sustaining. At the same time, ensuring a smooth supply chain is also key to scaling up production. For this to be successful, collaboration is key. Chinese battery and lithium companies have been buying upstream mining resources globally for some time, laying the groundwork. Countries looking to build their EV industry could look to boost collaboration and continue to build good trade relationships with those that hold key upstream materials. Sweden’s big rare earth discovery seen as ‘game changer’ amid China dominance Last, but definitely not least, is innovation. EV buyers are more interested in the technology, experience and design on their cars than brands. Being innovative and thinking outside the box is the key to success. Similarly, countries should encourage their local companies and industries to come up with more inventive ways when it comes to manufacturing and production. For example, Japanese companies have been focusing on making solid-state batteries which would no longer need graphite, a key component of EVs . This would be a game-changer and give them a leg up on the competition. The fact is that the EV race is in no way a done deal. With the right investments in technology, infrastructure and supply chains, it truly is anyone’s game. Victoria Mio is head of equity research, Asia Pacific, at Fidelity International