The race towards a more electrified car market is being won by China thanks to Plug-in Hybrids.
Between the US, the EU and China, there’s a clear winner in the electric vehicle race and that winner seems to be China. While the other markets have shown a decline in EV sales and a switch in preference towards hybrid powertrains, China has stuck to the path and posted some promising numbers. More than 50% of all new light vehicles sold in China in July 2024 were some form of electric vehicle.
It should be noted that China tends to lump together FCEVs, REVs and PHEVs and BEVs into one general EV category. This can be misleading. The truth is that pure battery electric vehicles are actually still not picking up the way it was expected to. In fact, it is PHEVs that are making up the bulk of these reported EV numbers.
The number reported by the China Passenger Car Association (CPCA) was 51.05% and the number is projected to rise to 53.2% in August 2024. While there were signs of declining interest in EVs earlier this year, an ‘Action Plan for Promoting the Renewal of Consumer Goods’ by the Chinese government spurred economic action. This new policy has a particular focus on EV sales by a subsidised EV trade-in program.
There are other more “carrot and stick” measures for EV adoption in China than in nearly any other market. It’s not that the majority of Chinese car buyers are salivating over PHEVs, rather they may not be even allowed to purchase non electrified vehicles. Local authorities issue purchase permits for vehicles and tend to be less restrictive when it comes to PHEVs and BEVs than ICE powered vehicles. There are also fewer traffic control restrictions on electrified vehicles, which incentivize the market to move in a given direction.
In contrast, the Malaysian government essentially lets you purchase an electric vehicle that is almost free of duties and taxes (save for a small sales tax) plus gives you some additional tax deductibles for your charging infrastructure costs. Even then, the percentage of pure BEV buyers in Malaysia is still in the single digits % of TIV and may remain there until a sub-RM100,000 and sub-RM50,000 EV is allowed to be sold here. Even after such affordable BEVs are sold, I still have my doubts that it’ll pick up. The Malaysian government may have to do the China thing and consider hybrids and fuel cell vehicles too.
