Every summer is a reminder of the urgency of climate change. Last year in July, the global average temperature rose to a record high. This summer, the flood, hurricane and extreme high temperatures again ring warning bells about the most imminent and grave threat to humanity. Accordingly, what is the most effective way to limit the global warming should be the prioritized topic for the global agenda. And from that imperative, the progress of global electric vehicle industry is definitely to be celebrated, especially the new milestone of China's EV adoption rate of 35.2 percent.

To transition away from fossil fuels, as announced and reaffirmed last year at COP28 in Dubai, the world needs to use green electricity as the major power source, and electrify the end use. Driven by rapid development of the EV sector, the recent automobile industry revolution is not only for the purpose of competitiveness, but for the promotion of the energy transition.

The development of China's EV industry can also be categorized into these solid actions. Transportation, which is a major source of emissions on the energy consumption side, accounts for about 10 percent of China's national carbon emissions. Transportation could be effectively decarbonized with the utilization of EVs. China's EV sales have experienced super-fast growth in the past decade, since its first climate commitment in 2009 in Copenhagen, and the country has become the world's largest EV market. In 2023, China accounted for 63.5 percent of the world's new energy vehicle sales. EVs took off around 2020, with a rapid growth in sales. There were 1.37 million new energy vehicles (primarily EVs) sold in 2020. In 2023, the number had soared to 9.50 million, even though purchasing subsidies was started to be phased out from 2016 and completely done around 2022.The high penetration rate of new energy vehicles in China stems from its large production capacity and cost effectiveness, which functions as a solid foundation for serving the 1.4 billion consumer market.

However, another concern still exists in people's mind that EVs do not account for the whole picture of the solution, supplying enough green electricity to every EV is the key. Fortunately, China is moving fast to realize its renewable power target. In its Nationally Determined Contributions, China has pledged to reach at least 1,200 gigawatts of installed solar and wind capacity by 2030. According to projections by the China Electricity Council, China will have more than 1,300 gigawatts of installed wind and solar capacity by the end of 2024, meeting its NDC target six years ahead of schedule. China is marching toward its goal to primarily establish a new power system around 2030. More EVs on the road backed by a green power system dominated by renewable energy would then be a significant contribution to China's decarbonization. It is even more exciting to see that efficiency is continuing to improve in all energy related sectors as the wave of digitalization and distribution mutually supports each sector's energy transition. EVs can play a larger role in the new energy system. For example, "grid-building-EV" interaction and integration technology has become an important practice for demand-side response, in which EVs and batteries have great potentials to serve as energy storage and load-shifting measures for a renewable-rich power system, where energy supply can be intermittent.

Beyond the adoption and utilization of EVs, another plausible trend is that the automobile industry has been actively involving upstream suppliers' carbon emissions into the whole vehicle life cycle carbon footprint management scope. Such action helps a lot to clarify "who is dirtier", when comparing carbon emissions between EVs and traditional internal-combustion engine vehicles. According to an evaluation of 13 car models by the China Automotive Technology and Research Center (CATARC), the life cycle carbon footprint of an EV is significantly lower — 37.8 percent less carbon emissions — than that of an ICE vehicle in China.

Driven by the whole life cycle carbon footprint control exercise, major emissions resources of EVs are further being identified and the first movers are taking actions to calculate and mitigate their emissions. According to CATARC, 42.6 percent of an EV's emissions come from materials and components, especially carbon-intensive parts such as steel, aluminum, and lithium batteries. Leading automakers such as Geely and Great Wall Motor, have committed to so-called Scope 3 decarbonization actions.

With an increasingly lower-emissions automotive value chain, upstream and downstream changes can be further mobilized to achieve cross-sector triple wins. China's first low-emission steel produced by DRI (direct reduced iron) technologies from Hebei Iron and Steel (HBIS Group) were provided to BMW for car manufacturing in 2023, an exciting example of using low-emission materials in cars.

To further strengthen the whole supply chain and neutralize the green premium, consumers are playing a much more critical role by sending the correct market signals. Standing on the vehicle life cycle carbon footprint evaluation tool, CATARC launched the Automobile Leader Program to offer incentives on the consumer side where car models with the lowest life-cycle emissions are rewarded with better market exposure, which sets a good example of consumer focused actions with positive impacts in both near term and longer term.

And the impacts can be huge. So far market scale has been the key factor effectively driving the growth of China's EV industry, and it will still be a major driving force to bolster it in the future. There are more than 400 million people in middle-income group in China and they represent the scale of potential EV consumers. In 2023, China consumed almost all its EV production, which demonstrates a high confidence to fully utilize its EV manufacturing capacity, clearly illustrating that "overcapacity" is not something that should be brought to table.

The policy signal on full-life cycle carbon footprint control is also a big milestone. The Chinese government issued an implementation plan to accelerate product-level emissions management in May, aiming at finishing the development of 100 green accounting methods for major products (including new energy vehicles) by 2027 and promoting them to international standards. The plan also recommends the application of carbon labels for vehicles to differentiate the low-carbon product market.

The urgency of combating climate change needs the world to move faster to advance the energy transition in all sectors, and calls for more green power and more EVs on the road. China's highly efficient and solid performing EVs bring good news to the world where strong alignment on this urgency exists. China can provide the world with cleaner, high-quality and affordable vehicles, which are essential for the global energy transition, to help the world achieve the climate goals at a faster pace. Businesses and consumers are the driving force, and sometimes may be more practical and rational to ensure that sustainability, economic growth, employment and equitable global transition remains as the ultimate objective.

Li Ting is chief representative and managing director of RMI China. Li Wei is manager of RMI China. The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.