Advances in technology have led to significant improvements in the mileage ranges and ease of charging of NEVs, garnering an unprecedentedly high level of consumer recognition. Consumer research shows that the proportion of older consumers who have purchased NEVs for the first time has increased significantly. This reflects that a growing number of older consumers who value the environmental and economic benefits of NEVs and are willing to embrace this emerging mode of transport to keep up with social developments. In addition, compared to last year, the proportion of prospective BEV owners with a budget above RMB300,000 has increased from 22% to 26%, indicating that the potential of the premium BEV market continues to expand.
Consumers are more willing to pay for NEV smart features. The maturity of smart technologies, coupled with market education and extensive information dissemination, has allowed consumers to see the practical value of smart technologies and recognise that they are not simply marketing gimmicks. 41% of car owners surveyed say they will purchase NEVs because they have better smart connectivity than petrol cars. The introduction of AI marketing offers NEV companies the opportunity to break through traditional marketing constraints. For example, innovative formats such as the metaverse and digital humans can offer consumers immersive experiences to deepen the brand impression and enhance its intelligent brand image.
With the rapid growth of the internet and the popularity of social media, consumers have a growing demand for intuitiveness and engagement, as they are keen to gain a deeper understanding of technical details and the actual performance of the products. Therefore, car company brands are showcasing their products through live streams and other forms of intuitive and interactive presentations, allowing consumers to see the products’ strengths with their own eyes, thereby establishing trust and standing out in a highly competitive market. 39% of car owners surveyed will purchase an NEV because it has a better autonomous driving function than a petrol car.
This report looks at the following areas:
- Consumer portraits of existing and potential new energy vehicle owners
- Tracking purchase drivers in different energy type vehicle owners
- Vehicle owners’ willingness to pay for different brands and energy types
- Comparison of energy consumption of different energy types
- Comparison of availability of and satisfaction with intelligent configurations
- Engagement and comparison of content channels of various new energy vehicle brands
- Attitudes of different segments of vehicle owners towards new energy vehicles
The new energy vehicle market continues to enjoy a double-digit growth, with the share of plug-in hybrid models rising to one third. A reshuffling of new and established players takes place as cross-category entrants join the fierce competition.
Austin Yuan, Senior Analyst, China Insights
Market Definitions
The respondents of this Report include: 1,000 petrol car owners and 500 consumers who plan to buy a petrol car; 1,000 NEV owners and 500 consumers who plan to buy a new energy vehicle (NEV). In this Report, a ‘car’ is defined as a passenger car used by individuals. Types of passenger cars include fuel cars, plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs).
This Report discusses the changes and opportunities in the electric and hybrid car sector in terms of NEV owner portraits, motivations for purchase of NEVs, willingness to pay for brands and energy types, energy consumption of different energy vehicles, availability and satisfaction with intelligent configurations, channel engagement of NEV brands and consumer attitudes towards NEVs.
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Executive summary
- Key issues covered in this Report
- Definitions
- Overview
- The market
- NEV sales grow by 36% year-on-year, with a projected steady growth
- Graph 1: retail volume sales and share of new NEVs and passenger cars, 2016-23
- Powerful growth in PHEV and premium models
- Graph 2: BEV and PHEV share of volume sales, 2015-23
- Market factors
- Marketing activities
- New product trends
- The consumer
- Technological advancement fosters greater EV acceptance in older consumers
- Graph 3: first purchases and additional purchases, by age, 2021 vs 2022 vs 2023
- Breakthroughs in smart driving technologies drive the demand for NEVs
- Traditional luxury brands lose brand equity, while domestic premium EVs gain popularity
- EVs’ strength in cost-effectiveness is prominent, but energy expenditure is higher for women and car owners from specific regions
- Graph 4: comparison of energy consumption by vehicle energy type, 2023
- Intelligent configurations are popular, and NEVs lead the way in user satisfaction
- Multi-channel information dissemination enhances the influence of NEV brands
- Graph 5: content channels of NEV brands, 2023
- Cross-category car manufacturing by Internet companies meets the personalisation needs of younger car owners
- Issues and insights
- What we think
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The market
- Market size and forecast
- NEVs have captured over one third of total volume sales of passenger cars with a year-on-year increase of 36%
- Graph 6: retail volume sales and share of new NEVs and passenger cars, 2016-23
- Volume sales of NEVs are expected to reach 9.39m in 2024, accounting for 42% of the total volume sales of passenger cars
- The market
- Self-owned brands are the MVPs behind the PHEVs’ rise to one third of the market share
- Graph 7: BEV and PHEV share of volume sales, 2015-23
- Self-owned brands are battling it out, as BYD pulls further ahead
- Small market share but high growth rate for NEVs above RMB300,000
- Market factors
- The cost of power batteries has declined, boosting the price war between EVs and fossil fuel vehicles
- Smart health cabins have become an important developmental focus in NEV smart driving systems
- Policy refinement promotes the upgrade of the NEV industry
- Frequent car company collapses lead to increasingly cautious consumer sentiment towards car purchases
- Issues such as difficult insurance policy renewal and battery recycling need to be addressed by regulations
- Marketing activities
- Meaningful participation in local environmental charity events
- Digitalise showcases and enhance with interactive gamification
- Experiment with MBTI and tap into younger people’s socialising patterns
- Inspiring and empowering women with her real driving stories
- New product trends
- Electronic rear-view mirrors have become a new innovative pathway in the smart car market
- ACRs greatly enhance the ease of charging
- EV wireless charging patented technology makes high-speed charging possible
- V2V charging improves the flexibility of charging
- Privacy Sound Shield technology allows conversations to be more private and secure
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The consumer
- NEV owner consumer portrait
- The proportion of first car buyers has skyrocketed in older NEV owners, while that of additional car buyers has increased slightly in younger NEV owners
- Graph 8: first purchases and additional purchases, by age, 2021-23
- The market for NEVs in the RMB200K price range faces pressure from the RMB100K price range, but the premium NEV market above RMB300K remains strong in Tier 1 and 2 cities
- Graph 9: car purchase prices, by city tier, 2021-23
- Over half of potential NEV owners plan to choose domestic brands
- Graph 10: preferred brand by region, by preferred energy type, 2023
- BEV market of above RMB300K has yet not reached its full potential
- Graph 11: car purchase price, by preferred energy type, 2022 vs 2023
- NEV purchase driver tracking
- Consumers are more willing to pay for NEV smart features
- Graph 12: NEV purchase driver tracking, 2021 vs 2023
- The cost advantage of NEVs in maintenance has significantly driven growth
- Graph 13: NEV purchase driver tracking, 2021 vs 2023
- Potential NEV owners are looking forward to breakthroughs in smart driving features
- Graph 14: NEV purchase driver tracking, 2022 vs 2023
- Younger NEV owners with environmentalist sentiments are not to be overlooked or let down
- Graph 15: NEV purchase drivers, by age, 2023
- Willingness to pay for brands and energy types
- Nearly 40% of respondents accept a price tag above RMB300K from emerging premium domestic brands
- Graph 16: willingness to pay for brands and energy types, 2023
- For high-budget car owners, Tesla’s room for premium is almost the same as that of BBA
- Graph 17: willingness to pay for brands and energy types – proportion of people willing to pay over RMB300,000, by car purchase budget, 2023
- BBA’s brand equity has declined among younger people
- Graph 18: willingness to pay for BBA petrol cars, by age, 2023
- Graph 19: willingness to pay for BBA NEVs, by age, 2023
- Comparison of energy consumption by energy type
- BEVs cost no more than RMB300 per month, while the monthly energy cost of PHEVs is about RMB500 and that of petrol cars exceeds RMB800
- Graph 20: comparison of energy consumption by vehicle energy type, 2023
- Graph 21: comparison of energy consumption by vehicle energy type, 2023
- Inconvenient charging has resulted in higher charging costs for BEVs in lower tier cities than in Tier 1 and 2 cities
- Graph 22: monthly energy cost, by energy type and city tier, 2023
- Intelligent configuration availability and consumer satisfaction
- Car mobile control apps have reached a 90% satisfaction rate, while fatigue driving monitoring is uncommon but has a high satisfaction rate
- Graph 23: satisfaction with intelligent configurations, 2023
- Graph 24: availability of intelligent configurations, 2023
- The availability of intelligent configurations is not so different across car energy types, but NEVs yield higher overall satisfaction
- Graph 25: availability of intelligent configurations, by energy type, 2023
- Graph 26: satisfaction with intelligent configurations, by energy type, 2023
- Intelligent configuration availability and satisfaction rates are similar in cars priced at RMB200K and RMB300K with a few exceptions
- Graph 27: satisfaction with intelligent configurations, by car purchase price, 2023
- Graph 28: availability of intelligent configurations, by car purchase price, 2023
- NEV brand content channels
- Exposure channels are virtually identical across brands, with the vertical automotive platforms coming first and video platforms second
- Graph 29: content channels of NEV brands, 2023
- Domestic new brands leave a stronger impression on BEV owners on video and lifestyle sharing platforms
- Graph 30: content channels of selected NEV brands, 2023
- High-priced PHEV owners rely more on lifestyle platforms for NEV information
- Graph 31: NEV brand content on lifestyle sharing platforms (f), by car purchase price, 2023
- Attitudes towards NEV
- In-vehicle systems have become an important factor in NEV purchases
- Graph 32: attitudes towards NEVs, 2023
- The novelty and playfulness of driving NEVs are more appealing to BEV owners
- Graph 33: attitudes towards NEVs, by energy type, 2023
- Younger car owners have higher expectations for cross-category car manufacturing and personalisation
- Graph 34: attitudes towards NEVs, by energy type, 2023
- Domestic NEV brands entering overseas markets will increase potential NEV owners’ willingness to buy from the brands
- Graph 35: attitudes towards NEVs, by energy type, 2023
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Issues and insights
- AI marketing to reinforce an intelligent brand image
- Intuitively showcase strength in technology and address consumers’ concerns
- Showcase the fun of electric vehicle driving with creative content marketing
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Appendix – methodology and abbreviations
- Methodology
- Abbreviations
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