Sino Inno Cap
Resource: “China electric car market — 29% market share in April”, cleantechnica.com, 2022
The Chinese electric mobility industry is flourishing thanks to broad customer acceptance and government support.  The electric segment is growing reliably, and in the first quarter of 2022, 1.07 million NEVs (new engine vehicles) were sold in China, 146.6% more than in the same period last year.  The government aims for 40% of all car sales to be battery-powered by 2030.  China is also targeting to lead the way in autonomous driving, with plans to commercialize robo-taxis and driverless trucks across the country by 2025.  Chinese auto company BYD plans to begin mass production of robo-electric cars as early as 2023. Tech conglomerates Alibaba or Tencent are offering capital as well as know-how, and a cluster of diverse local Chinese companies with complementary expertise (e.g., Xiaomi and FAW) are sharing the construction of the vehicles of the future.  Already 27 cities have approved designated routes for self-driving vehicles on which >70 companies operate with a fleet of around 600 self-driving cars, and Pony.ai and Baidu already operate self-driving cabs in Beijing. Shenzhen plans to open major roads to self-driving cars this year, and navigation, software, autonomous hardware components, traffic monitoring, and related secondary sectors will grow in tandem with the electric mobility sector. 
According to the latest forecast given by the China Association of Automobile Manufacturers (CAAM), China’s total auto sales are expected to reach 27.5 million units in 2022, of which 5 million NEVs are expected to be sold, increasing 47% year-on-year, with an estimated market share of 18%.  With the strong support of various national policies, China’s NEV market has maintained a high growth trend since the second half of 2020, and production and sales volumes continue to grow at an exponential rate. The global NEV market reached $10.2 billion in 2021, with China holding a 28% of the market share, South Korea taking a 20% of the market share, and Japan taking a 10.2% of the market share.  In 2021, China’s investment in the whole industry chain of NEV exceeded 740 billion RMB (around $109.6 billion), which was more than 50% of the investment scale of the whole automobile industry and accounted for 4% of the total investment in the manufacturing industry. Nearly 100 investment projects in China’s lithium-ion battery industry chain took place in the first half of 2021, with a total investment amount of more than 490 billion RMB (around $72.6 billion), including over 310 billion RMB (around $46 billion) and 180 billion RMB (around $26.6 billion) for batteries and its four major components, respectively.  More than 20 lithium-ion battery industry chain enterprises applied for listing in the first half of the year, with total financing of nearly 24 billion RMB (around $3.5 billion).
The market penetration rate further increased to 8.74% in January-May 2021, showing that China’s NEVs are developing rapidly, and the NEV industry is entering a new phase of accelerated development. With the high-profile announcement of Huawei and Xiaomi as the representative of the technology enterprises to “build a car,” that is, the technology firms officially entering the NEV market, the competitive pattern of China’s electric mobility industry that comprises traditional car enterprises, car-making new forces and technology enterprises gradually emerged . It is worth noting that the investors should be wary of the increased risk of a “bubble” of NEVs. In a competitive environment, only companies with a comprehensive set of advantages in technology, capital, and cost are capable to survive.