Brad W. Setser
Massive, and Growing, Capacity
China has, according to the New York Times, the capacity to produce over 40 million internal combustion engine (ICE) cars a year.
Goldman Sachs thinks China will also have the capacity to produce around 20 million electric vehicles by the end of 2024. It should have the capacity to produce something close 25 million EVs by late 2025, as production is currently increasing by close to 4 million cars a year and Chinese firms continue to invest heavily.
As the New York Times story makes clear, China now has an incredible—and I would argue unprecedented—capacity to supply over half the global market for cars, which is typically around 90 million cars a year.
China’s internal market is around 25 million cars, and not really growing—so rising domestic EV sales progressively frees up internal combustion engine capacity for export. Domestic demand for traditional cars is likely to be well under 10 million cars next year given the enormous shift toward EVs now underway inside China.
No comments:
Post a Comment