context: The domestic NEV (new energy vehicle) industry chain has quickly become the most complete in the world, and has strong competitive advantages in supporting sectors such as batteries and their materials. The US and the EU are now increasing their efforts to break China's dominance in this emerging sector.
Policy support for NEV development in the EU and the US is now unprecedented, says Zhu Tong 朱彤 Chinese Academy of Social Sciences Institute of Industrial Economics, noting that their measures will inevitably lead to changes in the competition pattern and industrial layout of the global NEV market, which in turn will have a profound impact on China's NEV industry. The opportunities outweigh the challenges, he says, noting
- rapid development of the European NEV market will expand demand for lithium batteries and their materials, and create favourable conditions for China's NEV companies entering Europe
- although China is seen as an 'adversary' of the US, NEV marketing and direct sales do not qualify for subsidies, and the launch will still provide new market opportunities for China's NEV companies
- the rapid development of the US and European NEV markets will also bring greater competitive pressure to China's NEV industry
The global competition pattern of new energy vehicles will change significantly within five years, and China should, Zhu says, actively and fully utilise the new market opportunities to foster the development of the NEV industry with positive interaction between internal circulation and external circulation to further enhance the competitiveness of China's NEV industry. He recommends the local industry
- increase the export and investment of NEVs to Europe and make use of the opportunities in the European market
- moderately utilise the opportunities in the US new energy vehicle market under the premise of controlling risks
- relevant departments to strengthen policy coordination
- establish the China New Energy Vehicle Export and Overseas Investment Alliance, under the guidance of the Ministry of Commerce and the Ministry of Foreign Affairs
- this will provide cooperation among Chinese brands and government departments in their promotion to the international market
- moderately relax quantity management indicators (capacity and energy consumption management) on chemical products, such as batteries and materials, which are currently greatly affected by domestic supply-side reforms, energy consumption management, hazardous chemicals management and environmental protection policies, which have raised their production costs sharply
- establish the China New Energy Vehicle Export and Overseas Investment Alliance, under the guidance of the Ministry of Commerce and the Ministry of Foreign Affairs