Amidst the pandemic, international electric vehicle (EV) sales climbed by 43 percent in 2020. China sold 1.3 million electric vehicles in 2019, up 8% from the previous year and accounting for 41% of all-electric vehicles sold worldwide. EV sales in Europe surpassed those in China for the very first time since the year 2015, but China remains the world’s largest national market for electric vehicles. The small Hongguang Mini EV, built by the SAIC-GM-Wuling Automobile, is a joint project between China’s SAIC Motor, which is state-owned, US automaker General Motors, and another Chinese business, Wuling Motors, is the best-selling Electric Vehicle in China.
With a beginning price of about 28,800 yuan (£3,200 or US$4,485) and a completely charged driving range of around 120 kilometers, the conglomerate advertises the car as “the People’s Commuting Tool.” The Hongguang Mini Electric Vehicle has sold more than 270,000 pieces since its launch in July 2020, making it the best-selling electric vehicle in the world in January 2021. This came as a shock, given Chinese buyers have a preference for larger vehicles with internal combustion engines. However, our recent study of Chinese consumer preferences suggests substantial market prospects for electric vehicles in small cities, as well as how innovative business models may inspire even more people to abandon their fossil-fueled vehicles.
In China’s larger cities, car plate lotteries are widely used to limit the number of gasoline cars permitted each year. Because the lottery winning probability in Beijing is less than 1% or 0.0039 percent, motorists have little choice except to switch to EVs. F findings imply that the Chinese government’s emphasis on encouraging people to drive electric vehicles in larger cities is misguided. Smaller Chinese cities reveal a desire for affordable, electric mobility that might be met both in China and around the world, particularly in the developing world’s booming towns and cities. The future of electric vehicles may not resemble the high-end Teslas that are currently getting the most attention.
To encourage more people to drive electric vehicles, manufacturers have experimented with innovative business models in China, like battery leasing plans. The battery is among the most expensive parts of an electric car. This strategy allows customers to purchase the vehicle’s body and then lease a battery on a monthly subscription. The second analysis found that the battery leasing model will likely increase the popularity of electric vehicles by attracting customers who are currently put off by their cost. Some EV firms that have established battery-leasing frameworks have also offered a service that allows drivers to swap out their depleted batteries for fully charged ones at a service station, which is a considerably faster transaction than recharging.