A spate of electric-vehicle manufacturers have entered the Chinese market, but there are few financing options, Roger Zhang, marketing and communications director for J.D. Power China, told Auto Finance News.
LMC Automotive reported that 186 EV models were launched in China last year, and J.D. Power estimates another 1,000 will debut by 2025. Many of these models were launched by new OEM entrants to the space such as NIO and WEY, which don’t yet have captive financing arms, Zhang said. Banks and fintech companies can offer financing, but it’s a risk because vehicle values and OEM success are uncertain.
Still, China heavily subsidizes EV purchases. The average price of an EV in China is $25,000 after incentives — about $5,000 less than some of the lowest priced models in the U.S., such as Tesla Model 3 or Chevy Bolt, Zhang said.
License plates in China are another kind of artificial incentive for EVs, he added. The price of a license plate in Shanghai today has “soared” to $13,000. The high cost of the plates is meant to control traffic congestion by deterring drivers from hitting the roads, and different cities utilize varying methods. In Beijing, a black market for license plates has cropped up because the lottery system can take months or years for citizens to acquire plates.
Other cities to the south, such as Guangzhou and Shenzhen, use a combination lottery and auction system. All those licence plate fees and wait times can be waived if consumers purchase electric vehicles instead.
“In this way, [the licenses] are also an incentive for EVs,” Zhang said. “The No. 2 most cited reason for wanting an EV in China is they want to get a license plate.”
