China’s new energy vehicle (NEV) sales are expected to grow more than 40 percent each year in the next five years, a senior official at the China Association of Automobile Manufacturers (CAAM) said on Friday.

Fu Bingfeng, executive vice chairman of CAAM, made the remarks at a conference held by the industry body in Shanghai.

Fu’s presentation showed that CAAM forecasts sales of NEVs, including battery electric, plug-in hybrid and hydrogen fuel cell vehicles, to hit 1.9 million units this year and 2.7 million vehicles in 2022.

NEV makers, such as Tesla, Nio, Xpeng, and BYD, are expanding manufacturing capacity in China, encouraged by the government’s promotion of greener vehicles to cut pollution.

China could extend tax exemptions on NEV purchases beyond 2022 to support development of the sector, Wan Gang, a high-ranking government industrial policy adviser who is often referred to in state media as China’s “father of EV”, said at the same CAAM conference.

Shares in China’s NEV-related companies climbed after the forecast.

Top battery maker CATL gained 3.7 percent. Hunan Zhongke Electric, Ningbo Rongbay New Energy Technology, Guangzhou Tinci Materials Technology, and BYD climbed between 2.9 percent and 10 percent.

© Thomson Reuters 2021

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