As Domestic Electric Vehicle Sales Stall... China Turns Attention to Rural Areas

The Chinese government is strengthening promotions in rural areas to expand the market base in response to the slowing growth of electric vehicle sales.

According to local media such as China Economic Net on the 17th, the National Development and Reform Commission and the National Energy Administration recently announced support measures for the purchase and use of new energy vehicles in rural areas. The key points include purchase support in the form of consumer coupons for new energy vehicles and the expansion of charging infrastructure construction.

[Image source=Yonhap News]

The authorities stated, "China has established the world's largest and most comprehensive charging infrastructure system to ensure the rapid development of new energy vehicles," but added, "However, vast rural areas still lack adequate public charging infrastructure, and it is difficult to install and share charging facilities within residential areas." They also noted that "there are issues such as contradictions between supply and demand, requiring environmental optimization and activation." According to the local economic media Caixin, as of the end of March, there were only 882,000 slow AC charging facilities and 1,136,000 fast DC charging facilities in China.

They emphasized the need for companies to actively develop new energy vehicles suited to the characteristics of rural consumers, including cargo transport vehicles, ultra-compact trucks, and small trucks. Additionally, they stressed the importance of improving the used car evaluation system and strengthening inspection and repair services.

In particular, local governments are urged to provide support for rural residents purchasing new energy vehicles through consumer coupons. This is interpreted as a strategy to indirectly provide government subsidies, which effectively ended this year, through local governments to increase the penetration rate in rural areas. They further explained, "Methods such as offering discounts when returning existing internal combustion engine vehicles are also encouraged," and "It is recommended that local governments collaborate with companies to provide charging coupons or offer reasonable methods such as loans for down payments."

This government policy was also previously announced by Premier Li Qiang. On the 5th, the State Council held an executive meeting, ordering the expansion of infrastructure and the training of personnel to support services to ensure no inconvenience in the use of new energy vehicles in rural areas. The meeting attracted attention as it was directly chaired by Premier Li Qiang.

Meanwhile, according to the China Passenger Car Association, sales of new energy vehicles in April this year increased by 34.8% compared to the previous year. Although growth continues, it falls significantly short of the average annual growth rate of 87.2% from 2012 to 2022.

This content was produced with the assistance of AI translation services.