In the process of deepening its participation in globalization, China has long earned the title of "world's factory". However, the country has rarely had its own branded manufactured goods occupying a significant share in the international market. Products like air conditioners and color televisions are certainly exported, but they fall under the category of consumer electronics and cannot be considered major manufactured goods. This reflects the issue that although China is a production powerhouse with scale and capacity, it is not truly a leader in the manufacturing industry.
However, this situation is now starting to change, primarily in the automotive sector.
In recent years, China's automotive exports have been consistently increasing. According to statistics from the China Association of Automobile Manufacturers (CAAM), in 2020, China exported 1.082 million vehicles; in 2021, the number reached 2.015 million; and in 2022, it reached 3.111 million. In the first quarter of 2023, the country exported 1.07 million vehicles, a year-on-year increase of 58%. According to data from the Japan Automobile Manufacturers Association (JAMA), Japan exported 950,000 vehicles overseas in the first quarter of this year. Looking at quantity alone, in the first quarter of 2023, China surpassed Japan to become the world's largest exporter of automobiles. If this export momentum can be sustained throughout the year, China's automotive exports in 2023 are expected to further increase.
It is undeniable that the significant increase in China's automotive exports is partly attributed to Russia. The outbreak of the war in Ukraine led to severe sanctions imposed by the West on Russia, which disrupted the supply of various commodities and industrial goods, particularly fuel-powered vehicles, creating a substantial demand gap in Russia. Official Chinese statistics reveal that China's exports of automobiles and automobile parts to Russia more than doubled in the first four months of 2023 compared to the previous year, amounting to USD 6.1 billion. Data from the CAAM indicates that Russia was the largest destination for China's automotive exports in the last quarter. However, while Russia plays a role in driving the surge in China's automotive exports, it is not the sole factor.
Notably, a significant portion of China's automotive exports consists of new energy vehicles, primarily electric vehicles (EVs). China has now become the world's largest exporter of electric cars, with its lead continuing to expand. According to data from the International Energy Agency (IEA), approximately 35% of globally exported electric vehicles in 2022 originated from China, compared to 25% in 2021. CAAM reports that in the first four months of this year, China exported over 335,000 new energy passenger vehicles (including plug-in hybrid electric vehicles), more than double of the figure for the same period in 2022. The export quantity of new energy passenger vehicles accounted for around 30% of its total passenger vehicle exports from January to April 2023.
Chinese-made cars have had limited visibility abroad, especially in developed economies. However, this situation has the potential to change in the era of electric vehicles. China has experienced rapid growth in the electric vehicle sector, driven by supportive policies and the active participation of Chinese companies in recent years. While debates exist regarding the effectiveness of fiscal subsidies for electric vehicles, it is important to acknowledge that electric vehicles have made considerable advancements under various policy incentives. While the global automotive industry remains hesitant in the realm of traditional vehicles, China has taken substantial steps forward in the development of electric cars, establishing a competitive edge in terms of scale and gaining traction in the consumer market.
It is crucial to note that new energy vehicles encompass more than just electric vehicles. Researchers at ANBOUND have consistently highlighted the importance of diversifying the range of new energy vehicles, including hydrogen-powered vehicles, instead of solely relying on electric cars. However, even without disregarding this viewpoint, electric vehicles, which are distinct from conventional fuel-powered cars, have paved the way for a new technological direction within the automotive industry. Especially as new energy vehicles integrate with intelligent driving systems, the definition of new energy vehicles has evolved, and they have transformed into multimedia computers on wheels.
As global market trends, capital preferences, and policy stimuli increasingly point towards new energy vehicles, largely electric vehicles, the demand for such vehicles in various countries' automotive markets is steadily rising. In this transformation, China's new energy vehicle industry, which has taken a few steps ahead and established scalable production capabilities and a complete industry chain system, is beginning to seize new opportunities brought about by the global market transition. It is worth noting that compared to other technological paths, China has a more comprehensive industrial chain and a richer industrial ecosystem in the field of electric vehicles. Its industrial clusters are also relatively competitive. ANBOUND researchers believe that these changes are critical reasons for the rapid growth in China's new energy vehicle sales and exports in recent years.
China's current position in the international market for new energy vehicles, particularly electric vehicles, is just the initial phase of its automotive industry and market transformation. Looking ahead, the country is expected to face two major challenges in the field of new energy vehicles. Firstly, it needs to establish a robust consumption and service system for new energy vehicles, especially electric vehicles, both domestically and globally. Failure to keep pace with the subsequent demand for consumption and services could result in the industry's prosperity being short-lived, solely reliant on product sales. Secondly, if hydrogen-powered vehicles, specifically hydrogen fuel cell vehicles championed by Japan, emerging as a viable technological alternative in the future, China's development model heavily focused on electric vehicles may lag behind in the competitive landscape of new energy vehicles. One reason ANBOUND continuously calls for the development of hydrogen-powered vehicles is that this technological pathway can provide the ultimate solution for zero carbon emissions.
Final analysis conclusion:
China's leading position in the export of new energy vehicles is undoubtedly encouraging news for its enterprises. This advantage has been formed by the country taking several steps ahead in the global automotive industry's transition. In the future, it needs to not only consolidate its newly emerged industrial advantage but also accelerate the development of hydrogen-powered vehicles and collaborate with other countries, such as Japan, to establish a leading position in the field of hydrogen-powered vehicles.
