China’s Electric Vehicle Market: A Storm of Competition Is Coming

China’s electric vehicle industry is burgeoning, but “there is a coming storm of competition … for manufacturers,” PVMI Director John Paul MacDuffie tells Knowledge@Wharton in an episode about the future of the country’s electric vehicle market and recent news about Shenzhen-based EV maker BYD Company’s profits (listen at top).

The Chinese government’s subsidies for the electric vehicle market, introduced in 2010, are set to be eliminated in 2020, and it’s already becoming more difficult to qualify for the breaks. While experts like MacDuffie expect China’s electric vehicle sector to keep growing, the change in government policy likely means some of the 500 or so registered EV makers in China will face new challenges.

“Before a shakeout comes some tough price competition, [along with] higher-end, technologically sophisticated competition from the multinationals,” MacDuffie said. “The big players — the ones with experience like BYD — are in a better position to survive a shakeout.”

Read the full article here.