(Yicai Global) Dec. 20 -- China's electric vehicle industry has shifted into a market-orientated phase, with the market share of new energy vehicles also climbing in cities that have no restrictions on buying fuel-powered cars.

The NEV penetration rate in cities that do no limit fuel car purchases was almost 22 percent in the first three quarters of the year, a gain of 10 percentage points from a year earlier, Xu Changming, deputy director at the State Information Center, said at an auto industry forum on Dec. 14. The rate was 36 percent in cities with such restrictions, he added.

China’s first-tier cities used to be the main markets for NEVs as newly-registered gas cars face curbs in these areas and NEV purchases are subsidized. As NEV sales enter a market-oriented phase, their penetration rate is growing also in cities with no constraints on the buying of fuel cars.

“The EV market’s development has fully launched,” Xu said. “In cities that do not restrict fuel vehicle purchases, buying NEVs is a voluntary move. A penetration rate of over 20 percent indicates the emergence of an active choice. This is a key change."

More than 6 million NEVs were sold in the first 11 months of 2022 for a total market share of almost 25 percent, data from the China Association of Automobile Manufacturers showed on Dec. 9. Sales of NEVs will jump 35 percent to 9 million next year, the association predicted.

Changes in the market structure also show the EV market’s growth. High- and low-end EVs made the running previously, with mid-tier autos playing a minor role. The middle field is now developing quickly. Mid-tier cars make up 53 percent of the passenger vehicle market, Xu noted, adding that growth in this area will further expand the NEV market.

“As China's car market enters a new development phase, the NEV industry will rely more on non-conventional markets with increased vehicle consumption, including mid-sized and small cities, as well as central and western regions,” Cui Dongshu, secretary general of China Passenger Car Association, said at the same industry forum on Dec. 15.

“With a population of almost 800 million, small cities, counties, and towns are the key to future NEV growth,” he said.

Editors: Liao Shumin, Martin Kadiev