Experts said that sales of new energy vehicles in China are expected to hit 9 million units this year, despite the policy change, which has caused some fluctuations in the industry and has become an important force in stabilizing consumption.
In the first half, NEV sales maintain a relatively fast growth rate, while government policies and revived consumer demand will help the industry maintain a certain growth trend, said Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers.
Since the beginning of this year, the automotive industry's policies have mainly focused on supporting NEVs, including encouraging the consumption of NEVs in rural areas, building more charging stations in rural areas and extension of purchase tax reduction policies, Chen said.
Although NEV sales were affected in the first several months of this year compared with the same period of last year because of the removal of subsidies that were first introduced in 2009, the Chinese market is chiefly driven by consumer demand.
In July, the sales of NEVs in China rose 31.6 percent year-on-year, data from the CAAM showed.
In the first seven months of this year, they brought sales to 4.53 million units, up 41.7 percent year-on-year.
The market share of Chinese brands rose due to the popularity of NEVs. Chinese brands seized 57.2 percent of the nation's passenger car market last month, the biggest in the country's history. The figure stands at 53.8 percent for the period from January to July.
By 2025, Wang Chuanfu, the chairman and president of BYD, predicted that the share of Chinese marques in China would reach 70 percent by 2025 thanks to their edge in the NEV sector.
Boston Consulting Group's global chair emeritus, Hans-Paul Burkner, said electric cars are a typical example that China is moving up in the value chain. China's companies are becoming more competitive, not just because of cost, but also because of quality and innovation.
In Beijing and Shanghai, I find the electric cars really impressive. This is what makes Chinese companies competitive, he said.
China's companies are moving away from traditional mechanical hardware to electronic devices and software in the NEV sector, He Rongliang, a researcher at China's Center for Information Industry Development, said.
Chinese car makers have made significant strides in key technology domains such as LiDAR, high-precision mapping, algorithms, computing platforms and assistance systems, he said.
He adds that a key feature of automotive intelligence is autonomous driving, a field in which many Chinese firms have an advantage.
For the past eight years, China has been the world's biggest producer and market for renewable energy vehicles.
The pace of EVs is accelerating, with about a quarter of all passenger cars sold in China last year, far ahead of about one in seven in the US and one in eight in Europe. HSBC expects the EV penetration rate in the world's second-largest economy to reach 90 percent by 2030.