Why China’s approach to commercial NEVs is so admirable

In recent years, China has made remarkable strides in the adoption of new energy vehicles (NEVs) in the commercial transportation sector, encompassing vehicles like lorries, buses and other public service vehicles, writes Tom Pattinson

With an increasing focus on reducing greenhouse gas emissions and combating air pollution, China’s aggressive push towards NEV use is not only environmentally conscious but also a strategic move to establish itself as a global leader in clean transportation solutions.

The Chinese government’s commitment to transitioning to clean energy transportation is evidenced by its stringent regulations and policies. To promote the adoption of NEVs in the commercial sector, several key requirements and incentives have been put in place:

• China has introduced an NEV Credit System that mandates automakers to generate a certain number of credits by producing and selling NEVs. Failure to meet these requirements results in penalties. This policy applies to both passenger and commercial vehicles, pushing manufacturers to incorporate cleaner technologies into their fleets.
• The Chinese government provides subsidies for NEV purchases, which includes commercial vehicles like buses and lorries. These subsidies aim to reduce the upfront cost of NEVs, making them more attractive to consumers and fleet operators.
• Several major cities in China, including Beijing, Shanghai, and Shenzhen, have implemented zero emission vehicle mandates that require a certain percentage of newly purchased public transportation vehicles to be electric. This drives the demand for electric buses and other public service vehicles.
• Stricter emission standards for traditional internal combustion engine vehicles have been put in place to encourage the adoption of cleaner alternatives. These standards, such as China VI, incentivise the use of NEVs by making it challenging for conventional vehicles to meet the required emissions criteria.

China’s electric bus market has seen exponential growth in recent years and is considered one of the most mature and extensive in the world. According to data from Mordor Intelligence, the market’s growth can be attributed to a combination of government support, technological advancements and increasing urbanisation.

Generous subsidies, tax exemptions and grants provided by the Chinese government have significantly propelled the adoption of electric buses. These incentives have helped reduce the cost differential between electric and conventional buses, making the former more financially viable.

Chinese electric bus manufacturers such as BYD and Yutong, the largest EV bus manufacturer in the world, have invested heavily in research and development, leading to technological breakthroughs such as longer battery life, faster charging and improved energy efficiency. These innovations have boosted consumer confidence in electric buses.

“China has pushed ahead, determinedly and with government support, the move to electric buses”, says David Gregory, China Market Business Advisor, CBBC. “For example, in the southern city of Shenzhen, the entire bus fleet of circa 16,000 is all electric. Several China bus makers are exporting to other countries, including the UK, to support their transition to electric fleets.”

Despite its success, China’s electric bus market faces challenges related to battery technology, range anxiety, and charging infrastructure. However, these challenges have opened doors for collaboration and innovation, spurring advancements in battery technology and charging networks.

Battery technology, in particular, will likely continue to improve, leading to longer ranges, faster charging times and reduced costs. This will alleviate some of the current challenges associated with electric buses. Chinese electric bus manufacturers are expected to explore international markets more aggressively, leveraging their technological expertise and competitive pricing to secure contracts in other countries.

While electric buses have been at the forefront of China’s NEV push, there is also growing interest in hydrogen-powered trucks for commercial transportation. Hydrogen fuel cell technology presents an alternative to battery-electric vehicles, offering longer ranges and faster refuelling times. The Chinese government has recognised the potential of hydrogen-powered vehicles and has initiated efforts to develop the hydrogen economy. Shanghai Sinofuelcell, China’s largest producer of hydrogen fuel cells for vehicles, has forecasted that its sales will more than double in 2023 and that at least 2,500 new hydrogen-powered vehicles will make it onto the roads this year. However, this technology is still in its nascent stages and faces challenges such as production costs, infrastructure development and hydrogen sourcing.

NEVs in the commercial transportation sector are undergoing a transformative shift toward cleaner alternatives. With stringent regulations, robust incentives and a commitment to technological innovation, China has positioned itself as a global leader in the adoption of commercial electric vehicles in particular. Furthermore, the exploration of hydrogen fuel cell-powered trucks showcases China’s willingness to explore diverse solutions to meet its clean transportation goals. Over the next couple of decades, the evolution of China’s NEV landscape will have implications for the global transportation industry as a whole.