TOKYO -- China is forecast to make up almost 60% of the world's electric vehicle sales by 2035, a recent study predicts, with the country's market swelling as global automakers step up investment to meet state quotas for production of electric cars.
Tokyo-based market research specialist Fuji Keizai forecasts sales of 11.25 million electric vehicles globally in 2035, nearly 15 times the number sold in 2017. China is expected to account for more than half the total, with 6.42 million electric cars sold that year.
By region, Europe is forecast to have the second-largest demand, with sales of 2.17 million electric cars, followed by North America at 1.36 million and Japan at 450,000. Last year 760,000 electric cars were sold worldwide.
Driving growth in China is a government policy that takes effect next year and puts in place quotas for production of "new energy vehicles," such as electric and plug-in hybrid cars. The rules have spurred investment by global automakers, which is likely to continue pumping up the market.
Worldwide sales of plug-in hybrids are projected to reach 12.43 million cars by 2035, just over 31 times more than the 400,000 that were sold last year. China is expected to be the largest market, with sales of 4.65 million cars, followed by Europe at 3.81 million and North America at 2.47 million. About 900,000 plug-in hybrids are expected to be sold in Japan that year.
Sales of hybrid vehicles, currently the most common type of electrically powered car, are only expected to double compared with their 2017 level, with global sales reaching 4.2 million vehicles by 2035. Japan will continue to be the largest market for the cars, according to the forecast, with sales of 1.31 million cars. North America is expected to be the next largest market, with sales of 1.03 million hybrids, followed by Europe at 580,000 and China at 510,000.
Crucially, hybrids will not be classified as new energy vehicles in China. In the U.K., there are also moves to ban hybrids from the roads, along with gasoline- and diesel-powered cars. Demand for these cars is therefore unlikely to grow in places other than mature markets such as Japan and North America.
Against this backdrop, China, as the world's largest market for electric cars, is sharpening competition among global automakers, who are fighting to gain a foothold.
Herbert Diess, CEO of Volkswagen, which sold more than 4 million cars in China last year, in April announced the company will set aside 15 billion euros ($17.4 billion) for China-focused investment through 2022, directed at areas such as electrification, autonomous vehicles and connected vehicle technology. That represents more than 40% of VW's planned 34 billion euros of investment globally.
Japanese manufacturers are planning their own electric vehicle push. Toyota Motor plans to sell 10 new electric car models in China by 2020. Nissan Motor hopes to have at least 20 new electrically powered models by 2022, while Honda Motor has plans to invest in more than 20 new electric models by 2025.