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Benzinga
Benzinga
Business
Rachit Vats

EVs To Drive Growth In China Auto Market This Year, Says Rating Agency Fitch

Rating agency Fitch said on Tuesday it expects electric vehicles to remain a key growth driver in China’s car market.

What Happened: Fitch Ratings said EV volumes in China could reach 20% of the total share this year, up from 15.5% in 2021. 

Fitch said it estimates China’s passenger-vehicle market to sustain mid-single-digit growth in 2022 after wholesale deliveries rebounded 6.5% year-on-year to 21.5 million units in 2021.

“The growth will be propelled by strong electric-vehicle demand and dealership restocking after production bottlenecks due to a microchip shortage eased from 4Q21,” it said.

China’s EV deliveries surged by 168% in 2021 amid a tight supply of traditional cars.

See Also: Global Battery EV Sales To Reach 40M In Five Years, From 4.8M Last Year: Ark Invest

Who Are The Big Players: The agency counted BYD Co (OTC:BYDDY), Tesla Inc (NASDAQ:TSLA) and the Hongguang Mini EV built by Wuling — a partnership between China’s state-owned SAIC Motor and General Motors Co (NYSE:GM) — 

as together contributing nearly half of EVs sold in 2021. 

The agency said that the mass-market joint-venture brands such as one from Volkswagen Group (OTC:VWAGY)’s ID electric vehicle series continued to lag behind.

Fitch said it believes mass-market JV brands would be able to recover some chip-led share losses in 2022 but the long-term threat from Chinese local brands remains due to their strong EV exposure.

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