Chinese marques lead NEV fast lane

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New energy vehicles or NEVs are hitting the fast lane in China, and the sector is expected to help the country's carmakers to overtake international rivals, analysts said.

In June, sales of electric vehicles or EVs and plug-in hybrids reached a record 596,000 units, up 132 percent year-on-year, pushing the overall first-half deliveries to over 2.6 million units and full-year sales estimates to 5.5 million units, said the China Association of Automobile Manufacturers.

The robust growth will help China's overall vehicle sector to see positive growth this year, said Chen Shihua, deputy secretary-general of the CAAM.

Data from the Ministry of Public Security showed there were 10.01 million EVs and plug-in hybrids on the road in China by the end of June.

China started to develop NEVs in 2009 with subsidies, one of the earliest countries to do so in the segment, and became the largest market for such vehicles in 2015.

Since then, the country has ranked first in terms of production and sales for seven straight years, said Xin Guobin, vice-minister of industry and information technology.

Fu Bingfeng, secretary-general of the CAAM, attributed the sector's rise to sustained policy support and technological innovation, which led to growing acceptance among consumers.

Data from the Ministry of Industry and Information Technology showed that central and local authorities have put in place more than 600 policies for NEVs over the past decade.

They cover vehicle production, financial stimuli, product safety, as well as technological innovation and charging infrastructure.

Compared with international carmakers, local Chinese companies were among the first-movers in the NEV segment, so they are quicker to adopt new technologies and launch new models, said Edward Wang, a J.D. Power China analyst.

"Such innovation is injecting momentum into Chinese brands in a rapid, effective and continuous way," Wang said.

Of the 15 most popular NEV carmakers from January to June, only three were international brands.

Tesla ranked third, and Volkswagen's two joint ventures-FAW-Volkswagen and SAIC Volkswagen-settled for the 14th and 15th places. They had a combined 12.4 percent market share.

In comparison, China's BYD seized a 28.2 percent share in the same period, with 634,000 units sold.

Yang Yue, a 38-year-old bank manager in Beijing, placed an order for an electric P7 from local startup Xpeng in June.

Yang, who also owns a gasoline-powered Infiniti Q50, from the premium arm of Nissan, said he had his first encounter with an EV in February when a colleague who drank at their bank's party asked Yang to drive him home.

The colleague's electric Nio ES6 SUV blew the mind of Yang. "It was completely different. It was so quiet. Acceleration was stunning, and all the novelties including voice-controlled air conditioning were surprising," he said.

The difference was like "between an iPhone and a Nokia, or a Motorola", said Yang. "If you tried electric cars, you are very likely to lose interest in gasoline cars," he said.

Wang at J.D. Power China said smart features and exciting onboard experiences are becoming increasingly important factors for car buyers.

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