Benzinga | Jan 25, 2022 06:21AM EST

EVS To Drive Growth In China Auto Market This Year, Says Rating Agency Fitch

Rating agency Fitch said on Tuesday it expects electric vehicles to remain a key growth driver in China's car market.

What Happened: Fitch Ratings said EV volumes in China could reach 20% of the total share this year, up from 15.5% in 2021.

Fitch said it estimates China's passenger-vehicle market to sustain mid-single-digit growth in 2022 after wholesale deliveries rebounded 6.5% year-on-year to 21.5 million units in 2021.

"The growth will be propelled by strong electric-vehicle demand and dealership restocking after production bottlenecks due to a microchip shortage eased from 4Q21," it said.

China's EV deliveries surged by 168% in 2021 amid a tight supply of traditional cars.

See Also: Global Battery EV Sales To Reach 40M In Five Years, From 4.8M Last Year: Ark Invest

Who Are The Big Players: The agency counted BYD Co (OTC:BYDDY), Tesla Inc (NASDAQ:TSLA) and the Hongguang Mini EV built by Wuling -- a partnership between China's state-owned SAIC Motor and General Motors Co (NYSE:GM) --

as together contributing nearly half of EVs sold in 2021.

The agency said that the mass-market joint-venture brands such as one from Volkswagen Group (OTC:VWAGY)'s ID electric vehicle series continued to lag behind.

Fitch said it believes mass-market JV brands would be able to recover some chip-led share losses in 2022 but the long-term threat from Chinese local brands remains due to their strong EV exposure.