Pure electric vehicles have emerged as the dominant option in the global shift towards new energy vehicle development. Notably, China has become the largest market for such vehicles.
According to the statistics from the China Association of Automobile Manufacturers (CAAM), in 2022, the production and sales of new energy vehicles in the Chinese market reached 7.058 million and 6.887 million respectively. Among them, the production and sales of new energy passenger vehicles reached 6.716 million and 6.549 million, while the production and sales of new energy commercial vehicles reached 342,000 and 338,000. In 2022, pure electric vehicles accounted for 78% of new energy vehicle sales, with a total of 5.365 million units sold, while plug-in hybrid vehicles accounted for 22% with a total of 1.518 million units sold.
The sales champion of Chinese-brand new energy vehicles, BYD, recorded a total of 209,467 units of new energy passenger vehicles sold in April 2023. Among them, pure electric vehicle sales reached 104,364 units, an increase of 81.81% compared to the previous year, while plug-in hybrid vehicle sales reached 105,103 units, an increase of 118.64% compared to the previous year. The proportion of BYD's pure electric vehicles and plug-in hybrid vehicles is nearly equal.
In line with the dominance of pure electric vehicles in the industry, power battery production in China ranks among the top in the world. According to statistics from SNE Research, in 2022, among the top ten global power battery installation companies, six were Chinese enterprises, with a market share exceeding 60%, and their advantages continue to expand. Companies such as CATL, SVOLT Energy, CALB, and EVE Energy are among the larger players.
The above data shows that China, as a significant force in the new energy vehicle industry, is indeed a leader in electric vehicles. Correspondingly, the country also holds a prominent position in power battery production. It is therefore safe to say that China's development of new energy vehicles is closely tied to the technological trajectory of electric vehicles. Over the past years, its policy framework for developing new energy vehicles has primarily focused on electric vehicles.
However, the development of new energy vehicles is not limited to electric vehicles alone. ANBOUND has continuously advocated for China to build a "hydrogen society" for several years. ANBOUND's founder Chan Kung pointed out that for China, constructing a hydrogen society is not only necessary for developing a low-carbon economy and achieving the "dual carbon" goals but also plays a significant role in strengthening energy security and establishing relevant industrial systems based on hydrogen energy. With this, even the most advanced non-hydrogen society "hegemonic" countries would find it difficult to impose sanctions on it. Promoting the development of a "hydrogen society" should become a strategic national approach for China to enhance its energy independence and reduce reliance on foreign energy sources.
Within the hydrogen-related industry, hydrogen-powered vehicles are an important sector. In terms of power technology, hydrogen-powered vehicles can be divided into two main categories: hydrogen internal combustion engines and hydrogen fuel cells. From the current technological and industrial development perspective, hydrogen fuel cells and hydrogen fuel cell vehicles are crucial areas that countries worldwide are actively investing in.
Public information shows that developed countries such as Japan, South Korea, the United States, and the United Kingdom have made the development of large-scale fuel cells a key research project. The UK government has explicitly stated its strong commitment to the development of hydrogen fuel cell vehicles, aiming to achieve a fleet of 1.6 million hydrogen fuel cell vehicles by 2030 and a market share of 30% to 50% by 2050. Japan is at the forefront of global hydrogen energy research and application. During a cabinet meeting on June 6, 2023, the Japanese government decided to revise the Basic Hydrogen Strategy. The new strategy proposes a total investment of JPY 15 trillion over the next 15 years by the Japanese government and private sector to advance and improve the hydrogen supply chain. Previously, Japan had set targets to achieve hydrogen supply volumes of 3 million tons and 20 million tons by 2030 and 2050, respectively. Building upon these goals, the new strategy includes a target of reaching a hydrogen supply volume of approximately 12 million tons by 2040, which is six times the current annual production of hydrogen in Japan, which stands at 2 million tons. Japan had already announced the hydrogen strategy in 2017, ahead of other countries. Considering the more comprehensive hydrogen promotion policies introduced by Europe and the United States in recent years, the Japanese government has decided to explore and revise its strategy accordingly.
In countries like Japan, businesses have also invested heavily in the research and development of fuel cell technology. They have achieved significant advancements, enabling fuel cells to be widely used in power generation and automobiles as alternatives to traditional generators and internal combustion engines. It is noteworthy that, amidst the global focus on electric vehicles by several major automakers, companies like Toyota, Hyundai, and Honda consider hydrogen fuel cell vehicles as the future of new energy vehicles. They have chosen hydrogen fuel cell vehicles as an important direction for their research and development efforts. To date, Japan has introduced several models of hydrogen fuel cell vehicles, including Toyota Mirai and Honda Clarity, which have demonstrated excellent fuel efficiency, emission control, and driving experience. Additionally, the Japanese government has implemented various policies to promote hydrogen fuel cell vehicles, such as tax exemptions and subsidies, aimed at increasing the market share of these vehicles.
Compared to its status as a major player in the new energy vehicle industry, China still faces significant shortcomings in the technical research, industrialization, and application of hydrogen-powered vehicles. The disparity between the development of hydrogen fuel cell vehicles and electric vehicles is particularly significant. According to industry experts, Chinese companies have a significant competitive gap in the passenger car sector compared to developed countries, although the gap is relatively smaller in the commercial vehicle sector. China's hydrogen fuel cell vehicles are predominantly used for commercial purposes, while the U.S. and Japan focus mainly on passenger cars. This difference in application is rooted in the technological gap in hydrogen fuel cell systems. Furthermore, in terms of the consumer environment for hydrogen vehicles, China's hydrogen refueling station infrastructure remains insufficient, and a comprehensive network of refueling stations to meet consumer demands has not been established. Overall, there is a noticeable gap between China with Japan and South Korea, in terms of the development stage and technological level of hydrogen fuel cell vehicles.
While the Chinese policies are supportive of it, the country is still in the early stages of development in the hydrogen energy industry, particularly in the field of hydrogen fuel cell vehicles where it is also at a relatively low level of technological development. ANBOUND believes that the future development of the global new energy vehicle industry will not be limited to electric vehicles alone. With increasing global demands for carbon reduction, there is enormous potential for the development of hydrogen energy vehicles, including hydrogen fuel cell vehicles. At some point in the future, they are expected to gain a significant market share in the new energy vehicle market.
In the face of this prospect, we believe that it is necessary for the Chinese policy departments and industry to be alerted to China's lagging position in the hydrogen energy industry. If the country continues to persist solely in the path of electric vehicles in the field of new energy vehicles and invests excessive resources and efforts in lithium batteries, which have visible resource limitations, then it is likely to fall behind other countries in the development and practical application of hydrogen fuel cells.
Final analysis conclusion:
China's development of new energy vehicles cannot solely rely on pure electric vehicles. In the context of building a hydrogen energy society, it needs to adjust the development direction to hydrogen fuel cell vehicles and improve the practical application environment. Otherwise, China may lag behind many countries and regions in the future hydrogen vehicle race.
