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https://www.mckinsey.com/industries...34&hdpid=7614e4eb-6c11-4d8e-85fb-0f415f6005d1
China remains firmly in the lead on our Electric Vehicle Index. But other pockets of growing public- and private-sector commitment to these vehicles have emerged.
Last year, for the first time, global sales of new electric vehicles (EVs)1 passed a million units (Exhibit 1), according to McKinsey’s Electric Vehicle Index (see sidebar, “What is the Electric Vehicle Index?”). Under the current growth trajectory, EV producers could almost quadruple that achievement by 2020, moving 4.5 million units, around 5 percent of the overall global light-vehicle market.
Pure electric vehicles (BEVs) currently make up 66 percent of the global EV market. BEV sales are growing faster than those of plug-in hybrid vehicles (PHEV). However, specific markets have very different powertrain preferences, which are influenced by regulatory actions, customer choice, and the availability of specific models.
The Chinese market expanded by 72 percent over the previous year in 2017, solidifying China’s leadership position in EV sales. The country now has a larger EV market—primarily BEVs—than Europe and the United States combined. With a sales share of around 94 percent, domestic OEMs currently dominate the Chinese EV market.
Generous subsidies and tight regulation continue to drive much of the growth. Electric vehicles are exempt from license-plate lotteries and auctions in some Chinese cities, and this still plays an instrumental role in promoting EVs. After a successful pilot program in selected cities, the Chinese government decided last year to introduce green license plates for new energy vehicles (NEVs) across the country. At the end of 2017, the plates were rolled out to all provincial capitals and other selected major cities, with the remaining cities to follow in the first half of 2018. Car owners with these license plates will be eligible for preferential treatment. Furthermore, China’s national and local subsidies for electric vehicles are among the world’s highest, reducing consumer concerns about the comparatively high up-front cost. . . .
In absolute terms, China’s EV-sales performance is quite remarkable. Yet the adoption rate represents only 2 percent on a national level—a limited number of large cities (such as Beijing, Hangzhou, Shanghai, Shenzhen, and Tianjin) account for a majority of EV sales . . . it was outperformed only by Norway in the EVI market score and reinforced its leading position—ahead of Japan, Germany, and the United States—in the industry EVI analysis (the “supply” side of the equation). However, given today’s EV-battery economics, leadership in EVI scores comes at a price: China and Norway have some of the world’s highest levels of spending on consumer and supply-side subsidies, at the taxpayers’ expense. . . .