China risks idle factories unless it shifts to EVs faster
Automakers in China risk sitting with idle factories unless they speed up transition to new energy vehicles such as fully electric vehicles and plug-in hybrids, Reuters reports, citing analysis from Greenpeace.
China's market has long grappled with overcapacity in the internal combustion engine (ICE) space, and the country has banned new capacity since 2017. Latest data from the China Passenger Car Association shows the industry utilizing just 53% of its annual manufacturing capacity of 41 million passenger vehicles (across all fuel types).
According to Greenpeace, if NEVs account for just 40% of sales in 2030 – against 30% now – then ICE production capacity at 10 major automakers including Volkswagen, Toyota and General Motors could end up unused.
GM and Volkswagen will face the largest pressure, with over 3 million units of idle ICE capacity. In response, Volkswagen, GM and Toyota said they were accelerating EV strategies in China.
GM said it planned to convert over half of its manufacturing capacity in China to be EV-capable by 2030.