Crossing the road in a big Chinese city three decades ago the few cars you would have seen in the sea of bicycles would almost all have been either official limousines or beaten-up Japanese saloons touting as taxis. Today, Chinese carmakers already make more cars than those of any other country. The cars in Beijing today may carry foreign badges, but they are Chinese made. The country produced 23m cars last year, outstripping Europe and putting America in the shade (see chart 1). In terms of quality, though, the results have been poorer. No Chinese carmaker is remotely as impressive in its sector as Huawei, say, is in telecoms.
To stimulate demand, electric vehicles are generously subsidised and exempt from purchase taxes. They are also exempt from the restrictions placed on the purchase of cars with internal-combustion engines in six of the biggest cities. Further measures include requiring public-sector bodies to buy electric vehicles—a big boost for buses—and favouring car-sharing businesses that use them. The country’s charging infrastructure is far ahead of the rest of the world’s. Beijing has more public charging points than Germany. Together, these stimuli have created an electric-vehicle boom (see chart 2). Chinese electric-car sales are expected to hit 1.5m this year, compared with 1.1m in 2018. Colin McKerracher, head of advanced transport at Bloomberg New Energy Finance, goes so far as to suggest that the current rapid rate of growth in electric-vehicle sales, coupled with the decline in overall car sales seen last year, may mean that sales of cars powered by internal-combustion engines in China have already peaked.