As China’s top annual political and legislative meetings, the Two Sessions, commence in Beijing, a prevalent theme among provincial leaders and political advisers for their 2024 energy plans is the promotion of “New Energy Vehicles” (NEVs). China Dialogue’s analysis of work reports and political proposals reveals that four-fifths of provincial-level jurisdictions aim to boost their NEV industry this year, emphasizing the sector’s significance in driving sustainable energy practices.
While solar and wind power have seen a decrease in attention, enthusiasm for hydrogen energy remains strong. The NEV industry, identified as one of China’s nine strategic emerging industries, is viewed as a key driver of regional growth and economic development for many Chinese regions.
Twenty-six out of the 31 mainland provinces are committed to advancing NEV growth in 2024, either through expanding manufacturing capacity or implementing purchase incentives. Provinces such as Sichuan are focusing on enhancing charging and battery-swapping infrastructure, with plans to establish Yibin as the “capital of power batteries.” Additionally, provinces like Jilin are supporting auto brands in launching electric vehicle (EV) models, demonstrating the widespread commitment to NEV development.
Despite the collective passion for NEVs, some officials express concerns about potential saturation. Xin Guobin, deputy head of China’s Ministry of Industry and Information Technology (MIIT), cautioned against “blindly” launching NEV projects, pointing to the lack of overseas demand and the financial challenges faced by many NEV manufacturers.
Efforts to stimulate NEV consumption include initiatives by provinces like Zhejiang, planning to build 20,000 public charging pillars, and Hainan, the first Chinese province to ban fossil-fuel-powered vehicle sales, intending to launch an NEV renting system. As NEVs’ penetration rate exceeded 30% in China last year, there are predictions of a continued increase, potentially reaching 50% in 2025, presenting challenges of overcapacity for the industry.
In contrast to the NEV sector’s fervor, wind and solar power have seen a decline in provincial interest. While some provinces still plan to build large wind and solar plants, the focus on further scaling up manufacturing chains has diminished. Industry insiders attribute this shift to the maturity of the wind and solar power sectors, with developers already securing sufficient resources and the absence of subsidies affecting the ability to invest in new factories.