China is increasing investment in clean energy to meet growing demand for electric vehicles

China, the world’s largest electric vehicle (EV) market, is increasing its investment in renewable energy to meet demand in the solar, lithium and EV markets. In 2024, clean energy spending is expected to reach $675 billion.

The number of registered electric vehicles in China reached 8.1 million in 2023, an increase of 35% compared to 2022. In 2024, registrations are expected to increase by about 25% and reach 10 million units. China is now increasing investment in clean energy to meet the growing demand for materials and energy in the ever-expanding electric vehicle market.

According to data from the International Energy Association (IEA), investment in clean energy technologies will reach $675 billion in China in 2024, overtaking Europe and the United States, which are expected to spend $370 billion and $315 billion, respectively.

According to Finland’s Center for Research on Energy and Clean Air (CREA), the clean energy sector was the main driver of China’s economic growth in 2023, accounting for 40% of economic expansion. Investment in renewable energy infrastructure totaled $890 billion last year, almost equivalent to global fossil fuel investment in 2023.

Solid investments in clean energy are aimed at meeting growing demand for solar panels, lithium-ion (Li-ion) batteries and electric vehicles, which will see a 30% increase in exports in 2023, according to the IEA.

China’s production of lithium-ion batteries for energy storage reached 185 GWh in 2023, while lithium-ion battery exports increased by 33% compared to 2022 and reached 457.4 billion yuan (58.3 billion euros). China’s global electric vehicle exports also saw massive growth in 2023, increasing 64% compared to 2022 and exceeding 1.5 million units.

Most clean energy investments are focused on solar panels, which pose a new threat to local markets in the US and Europe due to their much lower costs. According to energy consultant Wood Mackenzie, China produces solar panels 60% cheaper than in the US and 50% cheaper than in Europe.

By strengthening its electric vehicle supply chain and clean energy market, China already looks strong in 2025 as a major player in the global electric vehicle market.

Main image courtesy of Shutterstock, 1563910855.