Policies Continue to Be Stepped Up: New Energy Vehicles Reap Benefits as They Head to Rural Areas

To accelerate the adoption of new-energy vehicles, bringing these cars to rural areas has also emerged as an effective promotional strategy. In July 2020, the Ministry of Industry and Information Technology, the Ministry of Agriculture and Rural Affairs, and the Ministry of Commerce jointly issued a notice calling for the organization of "New-Energy Vehicle to the Countryside" campaigns. According to data from the China Association of Automobile Manufacturers, over the past three years of implementing this policy, cumulative sales have exceeded 4.1 million vehicles.

On May 17, the National Development and Reform Commission (NDRC) and the National Energy Administration jointly released the "Implementation Opinions on Accelerating the Construction of Charging Infrastructure to Better Support New Energy Vehicles Going Rural and Rural Revitalization" (hereafter referred to as the "Opinions"), outlining specific measures to promote the moderate and forward-looking development of charging infrastructure in rural areas. A spokesperson for the NDRC emphasized that the rural market for new energy vehicles holds vast potential. It is crucial to promptly address the shortcomings in charging infrastructure development, accelerating efforts to achieve full coverage of charging stations—reaching every county—and ensuring widespread availability of charging piles—extending to every township—in regions suitable for using new-energy vehicles. This move aims to eliminate concerns among rural residents about adopting green transportation options. Moreover, these newly issued "Opinions" are expected to further unlock the consumption potential in rural areas, encouraging more residents to embrace eco-friendly travel habits. By doing so, they will not only inject fresh momentum into the comprehensive revitalization of rural communities but also play a positive role in boosting the growth of the new-energy vehicle industry.
As a pillar industry of the national economy, automobiles account for approximately one-tenth of the total retail sales of consumer goods. In recent years, China's new-energy vehicle market has experienced astonishing growth. By the end of 2022, the number of new-energy vehicles in circulation exceeded 13.1 million, accounting for more than half of the global total. However, currently, the average car ownership rate in China stands at around 220 vehicles per 1,000 people. Notably, in lower-tier markets, this figure drops to below 100 vehicles per 1,000 people. Given China's vast rural population of 800 million, if we assume a modest ownership rate of 200 vehicles per 1,000 people, the total number of vehicles in these areas could easily reach at least 160 million—demonstrating immense market potential. According to the "Research on Electric Vehicle Mobility in China's Rural Areas" released by the China EV100, it is projected that by 2030, the average car ownership rate in China's rural regions will approach 160 vehicles per 1,000 people, with the total number of vehicles surpassing 70 million units.

Rising consumer demand has also allowed more automakers to recognize the potential of this market. New energy vehicles are showing signs of rapid growth in the domestic market, making the rural market a crucial market for major automakers, especially those involved in new energy vehicles. In recent years, with the rapid development of the rural economy, the focus of growth in motor vehicles and drivers has gradually shifted from urban areas to rural areas. According to data from the Ministry of Public Security, by the end of November 2022, the number of motor vehicle drivers in rural areas of my country had reached 289 million, accounting for 57.8% of the national total, demonstrating greater potential for development in the rural market.

Previously, Cui Dongshu, Secretary-General of the China Passenger Car Association, also stated that while the current penetration rate of new energy vehicles in county and township markets is relatively low, this segment holds a potential consumer base of at least 500 million people. With the gradual improvement of the overall market structure and the growth of consumption in county and township markets, there is significant potential for new energy vehicles to reach rural areas. Since July 2020, various departments have been carrying out a series of new energy vehicle promotion activities to promote the expansion of new energy vehicle consumption into rural areas. After nearly three years of efforts, sales of new energy vehicles targeting rural areas saw year-on-year increases of 80%, 169%, and 87% in the second half of 2020, 2021, and 2022, respectively, maintaining a robust growth momentum.

New energy vehicles have inherent advantages in rural areas. Electricity prices are relatively affordable in rural areas, and the wide variety of new energy vehicles offers rural consumers a growing selection, boosting their enthusiasm for purchasing vehicles. Furthermore, driven by the new energy vehicle promotion campaign, rural market acceptance of new energy vehicles has significantly increased. In the past, concerns about insufficient range, charging difficulties, and quality and safety were common concerns when purchasing new energy vehicles. However, with the improvement of new energy vehicle product quality and the gradual improvement of supporting infrastructure, rural consumers are no longer concerned about charging. They even believe that charging in rural areas is more convenient than in cities. They can charge at home, without having to worry about parking and charging stations, and the cost of ownership is lower, leading them to prioritize new energy vehicles when choosing a car. At present, there is a large gap in the penetration rate of new energy vehicles between urban and rural areas. The penetration rate of new energy vehicles in first-tier cities has exceeded 50%, while the penetration rate in some third- and fourth-tier cities is less than 10%. Therefore, the market space stimulated by the development of new energy vehicles in rural areas is undoubtedly huge.

Industry experts believe that while new-energy vehicles currently enjoy a higher market share and greater adoption rates in urban areas, promoting their use in smaller and medium-sized cities is an inevitable trend. Looking ahead, as the overall market structure continues to improve, rapidly boosting consumer demand in county and township markets will create significant opportunities—essentially unlocking a vast "blue ocean" opportunity. With China's comprehensive efforts to advance rural revitalization and develop the new-energy sector, the country's new-energy vehicle market is poised for tremendous growth. Moreover, accelerating the development of new-energy vehicles in rural areas will not only play a pivotal role in driving the energy transition but also contribute significantly to rural economic development and enhance the quality of life for farmers.
So, by continuously introducing favorable policies and accelerating the deployment of rural charging infrastructure, the country aims to support the expansion of new-energy vehicles into rural areas and boost rural revitalization—essentially paving the way for the growth of the new-energy vehicle industry. Undeniably, however, rural regions still face significant challenges, including insufficient public charging infrastructure, difficulties in installing and sharing charging facilities within residential communities, and acute mismatches between supply and demand during peak hours. These issues are holding back the full realization of rural areas' potential for new-energy vehicle consumption. Industry data also reveal that the proportion of public charging piles located in towns and rural areas remains extremely low—less than 5%. Given this reality, while promoting the adoption of new-energy vehicles in rural areas, it’s even more crucial to proactively plan and deploy charging facilities ahead of time, thereby alleviating consumers’ concerns and encouraging them to make purchasing decisions with confidence.
For a long time, the insufficient charging infrastructure in rural areas has been one of the most significant barriers hindering the adoption of new energy vehicles. Although new-energy cars in rural regions can opt for convenient home-based slow charging, it still pales in comparison to the ease of refueling gasoline-powered vehicles. As a result, many people have simply given up on the idea of purchasing new-energy cars.

To this end, various national departments have issued policy documents supporting the introduction of new-energy vehicles to rural areas, outlining specific measures such as moderately advancing the construction of charging infrastructure and optimizing the environment for purchasing and using new-energy vehicles. The next key step will be addressing the current gaps in charging infrastructure development by accelerating the deployment of charging stations in rural regions, thereby providing greater convenience for users. Specifically, regarding the construction of charging facilities, the "Opinions" emphasize prioritizing investments in public and community-based charging networks, while also speeding up efforts to retrofit existing residential communities in rural areas with tailored charging infrastructure. Additionally, the document underscores the importance of ensuring that newly built residential communities are equipped with adequate charging facilities from the outset, and continues to promote the shared use of charging infrastructure across the board.
Currently, the widespread adoption of home-use charging piles in rural areas has made it more convenient to charge pure electric vehicles. Most rural residents now have the necessary conditions to install their own charging infrastructure, and the average household's power distribution capacity can easily meet the demands of slow-charging needs. Moreover, home-based slow charging is cost-effective, offers flexible timing options, and is easy to set up—making it a key solution to addressing charging challenges in counties and townships. However, as new energy vehicles continue to expand into rural areas, we must take a longer-term perspective and enhance the overall quality of this initiative by improving supporting facilities. Currently, public infrastructure in rural regions remains relatively underdeveloped, so it’s crucial to accelerate the construction of charging infrastructure and strengthen the layout of charging networks across county seats and townships. Additionally, local governments should be encouraged to embrace cutting-edge technological innovations such as "photovoltaic-storage-charging-discharging" systems, fostering the integration of "new energy vehicles with new energy electricity." This approach not only helps reduce costs associated with upgrading and expanding the distribution network in rural areas but also paves the way for a sustainable and efficient transition to clean energy mobility in these regions.

It's worth noting that some organizations predict a surge in demand for charging piles, with the public charging pile market expected to reach 48.7 billion yuan over the next three years. Moreover, driven by both policy support and growing consumer demand, the industry is poised to enter an accelerated construction phase, with long-term market potential exceeding 100 billion yuan—further boosting the confidence of charging pile enterprises. In addition, the "Opinions" emphasize the importance of moderately advancing infrastructure development, primarily in anticipation of the future growth of new energy vehicles. By proactively deploying charging infrastructure now, the plan aims to meet upcoming demand, preventing mismatches between the number of new-energy vehicles and available charging facilities—and ultimately accelerating the widespread adoption of these eco-friendly vehicles.
Currently, advanced charging technology has already achieved impressive results, such as the adoption of 800V high-voltage systems. Some vehicle models now support charging powers exceeding 250kW, with certain models even capable of reaching up to 480kW, significantly boosting charging speeds. However, most existing charging stations still fall short of these high-power standards, making it difficult to meet the growing demand for rapid, high-capacity charging—a challenge that requires proactive planning and preparation. Of course, while expanding the infrastructure for charging stations, it’s equally important to focus on operational efficiency. One major hurdle in deploying charging facilities in rural and township areas is the relatively dispersed residential patterns of local residents, which complicates the construction process. This leads to increased labor and engineering demands, longer cable installation routes, and ultimately higher investment costs.
The "Opinions" stipulate that centralized charging and battery-swapping facilities implementing the two-part electricity tariff will be exempt from demand (capacity) charges, while also relaxing efficiency constraints on grid enterprises' investments in related distribution network infrastructure—allowing these costs to be fully recovered through transmission and distribution tariffs. This means that building public charging facilities in rural areas can significantly reduce operational costs, and at the same time, the efficiency restrictions on grid enterprises' investment in distribution networks will be lifted. Such measures will effectively encourage state-owned grid enterprises to fulfill their social responsibilities with greater proactiveness and commitment. Moreover, the document addresses challenges like low usage frequency of rural charging piles by proposing enhanced support for the construction and operation of charging networks. It recommends leveraging local special-purpose bonds and other financial instruments to back eligible charging and battery-swapping infrastructure projects, while simultaneously undertaking complementary upgrades to the supporting power grids, thereby bolstering the overall capacity and reliability of rural power systems. Crucially, alongside expanding the physical infrastructure of charging stations, it is equally important to improve the quality of maintenance and service experiences for charging facilities. This includes refining the operational and maintenance framework for charging infrastructure, ensuring higher availability of facilities, and strengthening capabilities to swiftly address any technical issues or malfunctions.

Actually, many new-energy vehicle owners have encountered issues such as charging pile malfunctions and inability to charge. This highlights the importance of post-installation maintenance for charging stations. Particularly in rural areas, where equipment is often scattered and maintenance may not be timely, it’s easy for users to experience poor charging experiences. Therefore, proactive planning for charging station maintenance is essential, especially in rural regions. Moreover, after-sales service and maintenance remain a key bottleneck in the overall usage of new-energy vehicles. To address this challenge, automakers need to not only continue developing products that better meet the needs of both urban and rural consumers but also strengthen their decentralized after-sales service networks. Additionally, supportive policies from government authorities will play a crucial role in facilitating these efforts.
Cui Dongshu suggests, "In the coming years, the focus of bringing new energy vehicles to rural areas should be on enhancing after-sales service quality, establishing a comprehensive post-purchase support system, and developing robust social service networks. After all, ensuring that these vehicles are well-maintained, their batteries are properly charged, and customers receive excellent service will be key to successfully expanding the adoption of new energy cars in rural regions." Additionally, government departments and relevant institutions should prioritize addressing issues such as license plates, driver’s permits, and after-sales maintenance and social services for new energy vehicles, thereby helping to make these eco-friendly vehicles practical, convenient, and widely embraced by everyday consumers as reliable modes of transportation.
To support the smooth rollout of new-energy vehicles in rural areas, relevant national authorities have also introduced a range of favorable policies to pave the way for the widespread adoption of these eco-friendly cars in towns and villages. In the recently released "Opinions on Bringing New-Energy Vehicles to Rural Areas," we noted that departments specifically emphasized the importance of automakers considering the unique travel scenarios in rural regions, which differ somewhat from those in urban settings. For instance, while urban consumers primarily prioritize convenience and cost-effectiveness when purchasing new-energy vehicles, in rural areas, their needs increasingly revolve around vehicles that can seamlessly balance family transportation with practical cargo-carrying capabilities.

Therefore, companies are encouraged to develop more economical, practical, and marketable models tailored to the characteristics of rural consumers, particularly commercial vehicles such as minivans, light trucks, and cargo vans. It can be seen that during the nearly three-year "Going to the Countryside" campaign, automakers have significantly increased their focus and investment in third- and fourth-tier cities and rural towns, accelerating the launch of a number of new energy vehicle models suitable for these scenarios and enriching consumer choice. To a certain extent, this "Going to the Countryside" campaign has helped promote supply-side reform in the automotive industry. Indeed, given the limited spending power in rural areas, new energy vehicles must first address the needs of the local population if they are to gain greater market share in this region, with price being a key consideration.

Currently, the most popular new energy vehicle models in the "Going to the Countryside" campaign are priced below 50,000 yuan, such as the Wuling Hongguang MINIEV, Chery QQ Ice Cream, and Geely Panda Mini. These vehicles are well-suited for commuting in rural areas and are affordable, making them convenient for daily commutes and school pickups. Therefore, initially, various automakers launched micro or small pure electric models targeting rural consumer demand, with prices generally kept below 50,000 yuan, and most models priced under 100,000 yuan, to better meet local consumer demand.

In recent years, with consumption upgrades, rural residents' incomes have continued to rise, raising their expectations for new energy vehicles. Many models priced around 150,000 yuan have become a consideration. From a product perspective, new energy vehicles in the 150,000 yuan price range surpass comparable fuel-powered vehicles in terms of performance and space, and also offer a slight advantage in terms of intelligence. Consequently, A-segment pure electric models such as the Geometry A, Geometry C, BYD Qin PLUS EV, Aion S, and Hongqi E-QM5 have joined the new energy vehicle ruralization initiative, attracting the attention of consumers in these lower-tier markets and generating positive market feedback. New car manufacturers such as Nezha and Leapmotor have also joined the new energy vehicle ruralization drive. Leapmotor founder Zhu Jiangming previously stated that Leapmotor is continuously increasing its product and channel investments for this new energy vehicle ruralization initiative. Data shows that as of early February 2023, Leapmotor's sales network has covered a total of 70 fourth- and fifth-tier cities, and its service network has covered a total of 37 fourth- and fifth-tier cities.

Additionally, in terms of supportive policies, the state also encourages regions with the necessary conditions to provide consumers—particularly rural residents holding local household registrations—with incentives such as consumer vouchers when they purchase new-energy vehicles within their county-level administrative areas. Meanwhile, automakers and eligible local governments are encouraged to offer trade-in rewards to those who replace their outdated low-speed electric vehicles with new-energy models. According to recent media reports, many regions have already kicked off the 2023 "New-Energy Vehicles to the Countryside" campaign, with significant financial backing from local governments. For instance, Shaanxi Province officially launched its initiative at the end of April, organizing online promotional events for new-energy vehicle companies and encouraging automakers to host live-streaming sessions or virtual car-buying platforms. At the same time, Xi'an City has simultaneously launched a group-buying promotion campaign aimed at government agencies, enterprises, and industrial parks, extending from April through December. Throughout the duration of the event, various subsidy programs and preferential policies continue to be enhanced, further boosting consumer interest and adoption of new-energy vehicles in rural areas.
Hefei City has also introduced the "Several Policies of Hefei City to Further Promote the Application of New Energy Vehicles and Intelligent Connected Cars," explicitly stating its support for bringing new energy vehicles to rural areas. Under this policy, residents who purchase standardized new-energy vehicle models from dealerships participating in the "New Energy Vehicles to the Countryside" initiative during the campaign period will receive a promotional subsidy of 5,000 yuan per vehicle. Additionally, Hefei will continue to strengthen collaboration between government and enterprises, encouraging financial institutions to increase credit offerings for new energy vehicles in rural regions. The city will also select five pilot townships to launch a pilot program installing charging stations in rural areas, aiming to promote 1,000 new energy vehicles in these regions. These efforts are designed to create an ideal environment for the widespread adoption of new energy vehicles in rural areas, while simultaneously opening up new growth opportunities and markets for the industry.

As the "New Energy Vehicles to the Countryside" initiative continues to deepen, coupled with supportive favorable policies, more regions will soon join the effort to promote new energy vehicles in rural areas, paving the way for their widespread adoption. In summary, new energy vehicles are economical, environmentally friendly, and highly practical modes of transportation. However, the lack of robust charging infrastructure has long been a major obstacle hindering their broader acceptance. Fortunately, thanks to government-driven initiatives, charging facilities and maintenance services in rural areas have significantly improved. Moreover, a range of incentives have been introduced to encourage new energy vehicle manufacturers to develop products better suited for use in township and village settings. Looking ahead, we can expect an increasing number of new energy vehicles to enter rural areas, injecting fresh momentum into rural revitalization while simultaneously propelling the new energy automotive industry forward.

Translated from Sina Auto

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