Analysis
13 Apr 19

EV policies make China jump over the US

When it comes to EVs there is always the chicken and egg dilemma: should we invest in EVs or in EV charging infrastructure first? When watching the two biggest EV markets in the world, China and the USA, it appears that China will find the answer first.  

The two biggest EV markets in the world – China has sold more EVs last year than all other countries combined – are of course faced with the question about charging infrastructure as well. Therefore, the Columbia University’s Centre on Global Energy Policy compared their policies regarding EV charging infrastructure and shows clearly why China is taking the lead in EVs and in EV charging infrastructure. 

By the numbers

Before we dive into the report, keep in mind that China has about 2.6 million EVs on the road, compared to 1.1 million EVs in the US. To charge these vehicles, China has about 808,000 EV chargers, compared to 500,000 in the US. The number of public charging stations follows suit with about 330,000 charging points in about 70,000 stations in China, compared to 67,500 points at about 24,000 stations in the US. 

One explanation can be found in the fact that the majority of the US charging points can be found at homes rather than in public spaces. This is unthinkable in China, where the majority of the cars has to be charged at public stations, considering the low amount of private parking spots. 

However, there is another major explanation considering the high amount of EVs and charging infrastructure in China, compared to the USA, which can be found in the policies of both countries

Charging 5 million EVs by 2020 (Policy for EV charging in China)

In general, the study found that the Chinese central government promotes the development of EV charging networks as a matter of national policy. Therefore, the central government has an active policy to promote the construction of EV charging infrastructure. This policy exists out of target-setting, funding and mandated standards. 

Additional various provincial and local governments promote EV charging on their territories as well. China’s first-tier cities have actually taken the lead in EV charging infrastructure. As a result of the Ten Cities, Thousand Vehicles programme (started in 2009), the cities of Beijing, Shanghai and Guangdong Province accounted for just under 40% of charging posts nationwide. And the number is growing nationwide. Most provinces in China now have more than 2,000 public charging posts. 

Additionally, highway corridors for EV charging have been installed between Beijing and Shanghai as well as other major cities, which are highly used during weekends and public holidays when people move from one city to another, rather than intracity commuting.

In the end, the Chinese central government aims to install sufficient charging infrastructure for 5 million EVs by 2020. The Guidelines for Developing Electric Vehicle Charging Infrastructure, as published in 2015, calls for at least 120,000 EV charging stations and 4.8 million EV charging posts by 2020.   

States rule out federal government (Policy for EV charging in USA)

In contrast to China, the US has no national charging infrastructure plan and the federal government only plays a minor role in the development of EV charging infrastructure, while some state governments have taken up a more active role. The US government provides some tax incentives to encourage EV purchases, while some state and city initiatives include tax rebates and financial tools to support the installation of charging equipment. But, overall, the US federal government did not stimulate the development of public EV charging infrastructure as much as it could.

This results in a much lower number of charging networks across the country. Remarkable is the impact of the state policies. With 5,600 non-residential EV charging stations, California hosts about a quarter of the national total. Besides that, the number is spread over the country with only Texas, Florida and New York having over 1,000 charging stations. While the average number for the 50 states is about 450 stations and 1,300 chargers.

Additionally, states have taken a leading role in preparing highway corridors for EV charging. The Interstate 5 – between San Diego and Canada – was the first major EV corridor, called the West Coast Electric Highway, and it opened in 2012. 

Variety vs unity (the role of technology)

Besides policy, technology might play a determining role as well. In China for instance, there is one nationwide EV fast charging standard, known as China GB/T, while the US has three EV fast charging standards: CHAdeMO, SAE Combo and Tesla. 

Additionally, in China the role of utility-owned public chargers is greater, especially along major long-distance driving corridors, while in the USA the role of carmaker EV charging networks is larger, hence creating a bigger variety of charging points and related issues as well. 

Another detail that might be a determining factor to the more widespread EV charging network in China could be the difference in range between the average EV in China and in the US. The average range of Chinese EVs tends to be much less than the average range of US EVs. Regarding the top 10 selling all-electric vehicle models, the average range in China is less than 200km/124 miles, whereas in the US the average range is more than 400km/248 miles. Hence, the created dense EV charging network in China is not only useful, but necessary as well. 

12% NEVs in 2020 (EV Policy in China)

Promoting the EV charging infrastructure is part of the broader EV policy of the central Chinese government. They promote EVs with a variety of policies, including subsidies, quotas for vehicle manufacturers, tax exemptions and rebates. Additionally, some cities favour EVs in obtaining license plates, while many provincial and local governments add additional EV promoting practices. 

The Chinese central government started subsidising EV purchases as from 2009, and did this directly to the manufacturers, hence enticing many companies into EV manufacturing. However, reports of fraud forced the government to redesign the policy. In 2018 the EV subsidies were updated, now they link automaker fuel economy credits with new electric vehicle production targets. The subsidies are among other criteria based on range and battery energy density but should phase out by 2020. 

Additionally, non-financial incentives have to promote EV purchases as well, such as exemption from city license plate lotteries or restrictions – it can take up to years to obtain a license plate in case of a conventional ICE-powered vehicle. In some regions EVs are even exempted from traffic or parking restrictions. 
China also has a New Energy Vehicle quota active which requires carmakers with over 30,000 annual vehicle sales in China to produce 10% NEVs in 2019 and 12% in 2020. 

200,000 EVs per manufacturer (EV Policy in USA)

Similarly, the US also has incentives for OEMs to produce EVs. There are tax credits for every first 200,000 vehicles sold per manufacturer, after which it phases out per manufacturer. And the federal fuel efficiency standards might provide additional incentives for manufacturers to sell EVs.

On the state level, many local governments created tax credits or rebates for the purchase of EVs, such as Colorado, California, Delaware, and Massachusetts. But the most important EV policy in the US is the multistate Zero Emissions Vehicle (ZEV) programme, which requires the participating state to sell 8% ZEVs for the entire amount of new vehicle sales by 2025. Participating states are California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Vermont. Additionally, some non-financial incentives should increase EV sales, such as high occupancy vehicle lane exemptions. 

In a nutshell

Taking the EV deployment by the numbers compared with the policies in the both biggest EV markets, it becomes clear that there is an obvious link between a decent EV policy and the increase of both EVs on the market and EV charging infrastructure. Both EV aspects have to be taken into account and addressed at the same time to solve the chicken and egg paradox that the EV market faces. So far, China is taking the lead thanks to its well-elaborated EV policy, leaving the US, for the moment, behind. 

Do you want to find out how this correlation works out for Europe? Read it here

Authored by: Fien Van den steen
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