China’s government aims to have 5 million electric vehicles on the road by 2020. However, we believe this target is too aggressive. Subsidies for manufacturing electric vehicles will end in 2020 but battery costs will not fall quick enough to keep retail prices competitive with gasoline equivalents. Many domestic manufacturers have rushed out high volumes of EVs to take advantage of subsidies. But by minimising development time and cost, quality has been compromised. The boom is unlikely to start until around 2025 – years behind the government’s ambitious goal. In this Insight, we present our core views by analysing the current characteristics of China’s EV market and examine how competitiveness is affected by different market drivers such as subsidy, battery cost as well as policies aimed to reduce pollution and road congestions. Please see the slidepack in the Downloads section for the full analysis.