It's hard to imagine that only a decade ago that the Chinese auto market was a distant 3rd behind the US and EU. Today it is the largest car market on Earth and that doesn’t look to change any time soon. However, such rapid growth has left Chinese cities and residents drowning in airborne pollution.

With growth coming at such a great cost China is scrambling to reverse course. Beijing regularly limits the times people can drive a week in an attempt to eliminate some air pollution and the Chinese government has dumped billions of dollars into renewable energy sources. Recently thought they have looked to electric vehicles as the key to solving their pollution problem.

Electric Vehicle Growth Explosion

Unlike the US and EU the Chinese government has the power to institute sweeping changes in the blink of an eye. Look no further than the Olympic Games and the sheer scale of what was created in just a relatively short time. With that same power the government has begun to push EV adoption in China to the highest in the world.

By offering large incentives to the tune of US$9,800 for single commuter vehicles and upwards of US$81,600 for all-electric city busses, the Chinese government gave the market a massive push. In the same way they took over the automotive market, China is doing the same for EVs. Over the past year EV adoption rates have gone from grassroots to mainstream in an explosion of EV activity. In fact the Chinese EV market has grown approximately 548% year-over-year and this past December Chinese EV sales outpaced US in sales for the first time 220,000-250,000, vs. 180,000 in the US.

Top Competitors Take Notice

With so much growth in such a short amount of time, many of the major automotive manufacturers are chomping at bit to enter the potential market. Tesla and GM have already made their Chinese expansion plans known, with Tesla already announcing plans for a Chinese manufacturing plant.

While Tesla and GM mark out their future plans, Chinese auto manufacturer BYD already has the market cornered and recently caught the eye of the world’s second richest man, Warren Buffett. Buffet last year acquired a 10% stake in the company and has watched BYD gobble up the Chinese market.

The Rapidly Growing Problem

While all this EV growth is music to many in China and around the world it is opening up major holes that need filling. Much like in the US, China now faces a plug shortage. The US market having grown at a far more steady and predictable rate has had ample time to build out the proper infrastructure. Yet despite the lead, EVs still outnumber charging stations 10 to 1.

A similar problem is popping up in China as well and the solution isn’t so easy to lock down as Tesla CEO Elon Musk recently pointed out that urban areas are unique for electric car owners, and getting multi-tenant buildings outfitted with chargers can be a different challenge than just upgrading a single family home.

Still in spite of all of this Musk sees China and Hong Kong as the model for how other high-density cities around the world can transform to a sustainable-transport future.