China’s Influence on the Global EV Aftermarket

As electric vehicles continue to gain popularity worldwide, the global auto aftermarket looks to China to help forecast trends and lessons for success.

January 2022 , by YCPS Marketing & Communication Group

The growing popularity of electrification has created a shift in the global auto aftermarket. As electric vehicles generally have lower maintenance compared to ICE vehicles, automotive aftermarket players are now scrambling to develop effective strategies that properly integrate and consider EVs and their long-term effect on business. 

With its pronounced policies and promising sales numbers, China’s aftermarket is being cited as an ideal example to draw inspiration from, both within Asia and in Western markets like the United States. Our Managing Partner Pilar Dieter and Director Leon Cheng shared their insights and analysis on China’s EV boom at the Automotive Aftermarket Product Expo (AAPEX) 2021 last November, offering foreign investors and business players a glimpse at how one country can help shape the future of the global aftermarket. 

Electric Vehicle Prominence in China 
In 2020 alone, China’s EV sales averaged four times that of US numbers, and accounted for 44.6% of global sales.  Through government subsidies, the Chinese government has been a driving force for the popularity of EVs over the past decade—in 2013, for example, subsidies would subtract approximately 8,700 USD from the purchase of a neighborhood electric vehicle or NEV (Since 2019, this total deductible has dropped to 3,600 USD due to increases in sales volume and lowered battery costs).  

The Chinese government is now concentrating on policies that target original equipment manufacturer (OEM) production requirements in relation to the aftermarket. Due to these concerted efforts regarding EV manufacturing, production, and even auto component aftermarket sales, China’s car parc is expected to surpass the United States by 2025 with a higher electrification ratio and an aftermarket ready to swiftly respond to changing consumer and business demands. 

Emerging Scenarios in the EV Aftermarket 
Global players who want to learn from China’s EV history must also take note of several scenarios that show just how the aftermarket industry has shifted to cater to EV owners and manufacturers: 

The arrival of EVs on the global aftermarket will inevitably cause a disruption, but it also presents unique, profit-making opportunities for businesses to innovate. By establishing reform and enacting initiatives related to EVs at the early stages of adoption, automotive players who remain proactive have the chance to capitalize on the upcoming profit pool shift.  

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