China’s zero-emission bus and truck market in 2023: growth & challenges

Shifts in market segments and technology adoption

The market for ZE-HDVs in China is segmented into various categories, each showing distinct trends in 2023. Buses continued to lead in terms of zero-emission penetration, maintaining a 17% market share in the total bus market, though this marked a slight decline from previous years. Notably, city buses dominated the ZE bus segment, accounting for 83% of all ZE bus sales, with coaches comprising the remaining 17%.

In contrast, the market for zero-emission trucks, particularly tractor-trailers and utility vehicles, showed significant growth. Tractor-trailers experienced the largest year-on-year increase in ZE sales, surging by 42%, followed closely by utility vehicles with a 41% increase. Within the utility vehicle category, sanitation vehicles and refrigerated trucks led the charge, achieving electric vehicle market shares of 25% and 11%, respectively.

Battery electric vehicles (BEVs) remained the predominant technology across most ZE-HDVs, accounting for 80% of new sales. However, the adoption of swap-capable BEVs and fuel-cell electric vehicles (FCEVs) also grew, reflecting a diversifying technology landscape. Swap-capable BEVs, which allow for quick battery replacements, were particularly favoured in the dump truck and tractor-trailer segments, where they addressed the needs for longer-distance travel and quick turnaround times.

Regional concentrations and strategic initiatives

The deployment of ZE-HDVs in China was not uniform, with significant regional concentrations. In 2023, the top ten cities accounted for 39% of battery electric bus sales and 53% of battery electric truck sales. Cities like Shenzhen, Shanghai, Chengdu, and Beijing were at the forefront of this transition. Driven by local policies and strategic initiatives aimed at reducing urban pollution and supporting national goals for carbon neutrality.

Particularly noteworthy is the role of cities like Tangshan, which has become a pilot city for swap-capable trucks, reflecting its importance as a major port and industrial hub. Similarly, Chengdu has leveraged preferential road access to promote the adoption of ZE engineering and dump trucks. These efforts highlight the critical role of local governments in driving the adoption of ZE-HDVs through tailored incentives and infrastructure development.

Battery technology and market dynamics

The report underscores the dominance of lithium iron phosphate (LFP) batteries in the ZE-HDVs market, which accounted for 99,9% of battery capacity in new sales. This reflects a slight increase from 2022, indicating ongoing consolidation within the battery technology space. Contemporary Amperex Technology Co. Ltd. (CATL) emerged as the leading battery supplier, expanding its market share from 79% in 2022 to 87% in 2023, further solidifying its position in the industry.

Despite the advances in battery technology, the sales-weighted average battery capacity for new ZE-HDVs varied significantly across different vehicle segments. For instance, tractor-trailers, which require large batteries for long-distance travel, had the highest average capacity at 335 kWh, while rigid trucks had the smallest at 88 kWh. This disparity highlights the diverse energy needs across different types of heavy-duty vehicles and the importance of tailored technological solutions.

Challenges and opportunities ahead

Looking ahead, the ZE-HDVs market in China faces both challenges and opportunities. The slight decline in overall ZE-HDVs market share, from 9% in 2022 to 8% in 2023, indicates that while there is growing interest and adoption, achieving sustained growth will require continued support from both national and local governments. Regulatory initiatives, such as the Clean Diesel Action Plan and the pilot programs for FCEVs, will be crucial in maintaining momentum and expanding the market for zero-emission vehicles.

As China continues its journey towards carbon neutrality, the ZE-HDVs market represents a critical component of the broader strategy to reduce emissions and transition to a more sustainable transportation system. The developments in 2023 underscore the complex interplay of technological advancements, market dynamics, and policy frameworks that will shape the future of this sector.

In conclusion, while the ZE-HDVs market in China showed signs of both growth and contraction in 2023, the overall trajectory remains positive. Continued innovation, coupled with strategic regulatory support, will be essential in overcoming the challenges and fully realising the potential of zero-emission transportation in China.

Source: The ICCT