Recently, Western critics have accused China of \\"overcapacity\\" in the new energy sector, claiming that the country is flooding global markets with cheap products and distorting market rules. However, is there truly an overcapacity in China's new energy vehicles (NEVs), lithium-ion batteries, and photovoltaic products?
In the realm of economics, overcapacity exists only when a country's productive capacity exceeds global market demands. Contrary to Western allegations, China's NEV production is still struggling to keep pace with global demand. According to EVTank, global NEV sales reached 14.65 million units in 2023, a 35.4% increase year-on-year. China produced 9.587 million NEVs and sold 9.495 million units, reflecting a 35.8% and 37.9% growth respectively.
Of the 9.495 million NEVs sold, approximately 8.292 million were consumed domestically in China—a 33.5% growth from 2022. Meanwhile, around 1.2 million units were exported overseas, marking a 77.2% year-on-year increase. This data demonstrates a balanced production and sales cycle in China's NEV market, debunking the notion that Chinese NEVs are oversaturating foreign markets.
Looking ahead, the International Energy Agency's Global Electric Vehicle Outlook 2023 estimates total EV sales to exceed 40 million units under the Stated Policies Scenario and over 45 million units under the Announced Pledged Scenario by 2030. In this context, China's annual production growth rate of 20% would allow it to produce around 34 million NEVs by 2030, which still falls short of global demand.
In conclusion, China's new energy sector maintains a balanced production capacity that aligns with both domestic consumption and the growing global demand, challenging the claims of overcapacity often propagated by Western critics.
Reference(s):
Is there overcapacity or insufficient supply in China's new energy?
cgtn.com
