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In the past two decades, rapidly expanding economy in China led to burst in travel demand and pursuit of quality of life. It further promoted the rapid growth of China's passenger car market. China had already become the largest vehicle sales country, exceeding the U.S. in 2010. By the end of 2018, there had been over 240 million cars in China, with over 200 million passenger cars. The surge of car ownership has also brought a series of problems, like traffic congestion, long commuting time, insufficient parking space, etc. Therefore, some local governments in China introduced vehicle purchase restriction policies to control the growth and gross of vehicle stock. Different cities issued different rules. Lottery and auction mechanisms both exist. There are also differences in classification and licensing of electric vehicles. However, with the recent slowdown of economic development, China's car sales began to decline in 2018, and the trend of 2019 is also not optimistic.

Compared with conventional vehicles, electric vehicles (EVs) offer the benefits of replacing petroleum consumption and reducing air pollutions. However, there have been controversies over greenhouse gas (GHG) emissions of EVs from the life-cycle perspective in China’s coal-dominated power generation context. Besides, it is in doubt whether the cost-effectiveness of EVs in China exceeds other fuel-efficient vehicles considering the high prices. In this study, we compared the life-cycle GHG emissions of existing vehicle models in the market. Afterwards, a cost model is established to compare the total costs of vehicles. Finally, the cost-effectiveness of different vehicle types are compared. It is concluded that the GHG emission intensity of EVs is lower than reference and hybrid vehicles currently and is expected to decrease with the improvement of the power grid.

Electric vehicles maintain the fastest development in China and undertake the responsibility of optimizing energy consumption and carbon emission in the transportation field. However, from the entire life cycle point of view, although electric vehicles have a certain degree of energy consumption and carbon emission reduction in the use phase, they cause extra energy consumption and carbon emission in the manufacturing phase, which weakens the due environmental benefits to some extent. The recycling of electric vehicles can effectively address the issue and indirectly reduce the energy consumption and carbon emission in the manufacturing phase. China is setting up the recycling system and strengthening regulation force to achieve proper energy consumption and carbon emission reduction benefits of electric vehicles. Under the current electric vehicle recycling technologies, China can reduce about 34% of carbon emission in electric vehicle manufacturing phase.

Both the economy and energy demand increase rapidly in China. The government is facing severe problems from energy security, carbon emissions and environmental issues. The past trends and future plans of energy will have great influence on the transportation, construction and industry development. This paper summarizes the present and future energy structure in China. Conventional fossil energy, nuclear energy and renewable energy are all included. Electricity will account for more proportion in total energy consumption in the future, and the structure of electricity will be cleaner. That will promote the development of electric vehicles and the transformation of China’s automotive industry. The optimization of energy structure will accelerate the low-carbon development in China. China’s energy development will enter a new stage from the expansion of total quantity to the upgrading of quality and efficiency.