China Explores the Potential of Selling New Energy Vehicle Sales in Rural Areas

During the executive meeting of the State Council of China on May 5th, it was emphasized that there is a need to expedite the development of charging infrastructure in rural areas to facilitate the adoption of new energy vehicles. Shanghai Securities reported that BYD, Changan Automobile, Chery and Leapmotor have already begun implementing relevant initiatives as Shaanxi and Yunnan provinces have launched campaigns promoting new energy vehicles in rural regions.

“The demand for new energy vehicles has not significantly increased recently,” stated Wang Jun, President of Changan Automobile. However, promoting the use of new energy vehicles in rural areas can greatly stimulate demand. Wang predicts that if effective measures are implemented in these regions, China’s adoption rate of new energy vehicles could surpass 40% by 2023.

A spokesperson from BYD stated that the company has participated in three new energy vehicle promotion campaigns in rural areas. As per their plan, BYD aims to enhance its products to cater to diverse needs and address various challenges faced during rural travel. Additionally, they will establish more sales channels in counties and townships.

Leapmotor, an emerging electric vehicle manufacturer, has had two of its new energy vehicles selected for a campaign. Meanwhile, Chery has achieved monthly sales of 10,000 units for their electric vehicle that is suitable for rural roads and charging facilities.

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In 2009, the automobile promotion campaign was introduced in rural areas. In July 2020, the Ministry of Industry and Information Technology, along with two other departments, launched a new energy vehicle promotion campaign. This initiative shifted the focus from fuel-powered vehicles to new energy vehicles. As per data provided by China Association of Automobile Manufacturers, this program resulted in the sale of 2.6598 million new energy vehicles in 2022, an increase of 87% compared to the previous year.

According to the report from ChinaEV 100, it is projected that by 2030, there will be approximately 160 cars per thousand people in rural areas of China. This would result in a total ownership of over 70 million units. Meeting the future mobility needs of rural residents could potentially create a market worth 500 billion yuan ($72 billion).