HANGZHOU, China: Despite the pandemic, global sales of electric vehicles (EVs) increased by 43 per cent in 2020. Total EV sales in China were 1.3 million, an increase of 8 per cent compared to 2019, and 41 per cent of all EVs sold worldwide.

Though Europe sold more than China for the first time since 2015, China is still the world’s biggest national market for EVs .

The best-selling EV in China is not Tesla’s Model 3, but the tiny Hongguang Mini EV , produced by SAIC-GM-Wuling Automobile, a joint venture between China’s state-owned SAIC Motor, US carmaker General Motors and another Chinese company, Wuling Motors.

The conglomerate positions the car as “the People’s Commuting Tool” in its advertising, with a starting price of 28,800 yuan (US$4,485) and a fully charged driving range of 120km.

Since its debut in July 2020, the Hongguang Mini EV has sold over 270,000 units and was the best-selling EV worldwide in January.

This was quite a surprise, as Chinese consumers have traditionally preferred larger models with internal combustion engines.

But our recent research on consumer preferences in China reveals significant market opportunities for EVs in small cities and how innovative business models could encourage even more people to ditch their fossil-fuelled cars.

EVS IN BIG AND SMALL CITIES China aims to reach a peak in its carbon emissions before 2030 and achieve carbon neutrality by 2060. Since 2009, the Chinese government has offered subsidies and tax waivers and built charging points to encourage EV buyers and manufacturers.

Related: Commentary: Tesla and all these Chinese EV makers are onto something worth hundreds of billions Commentary: Why China believes it’s go big on carbon emission cuts or go home But those subsidies are now drying up. Finding out what Chinese motorists like in EVs could tell us what’s behind growth in the world’s largest national market, and whether it’s likely to continue or stall.

This matters not only for China but the rest of the world. China has been the world’s largest emitter since 2006, and internal combustion engine cars are among the biggest sources of carbon emissions globally.

In a recent study, we found that most EV sales are made in China’s large cities – those with over five million residents, such as Shanghai and Beijing – largely due to the stronger policy incentives there. But consumers in small cities – each with fewer than a million residents – were the most keen to drive EVs.

In these small cities, drivers tend to enjoy shorter commutes and so have less pressure on their time and living costs. People there tend to care more about how well the vehicle works and the environmental benefits of EVs.

Prior research revealed that these consumers are less likely to buy an EV if it’s the more expensive option. This might explain why Hongguang’s Mini EV – with its limited range and relatively cheap price – originated in Liuzhou of Guangxi province, a small city in the south-west of China.

Larger cities in China commonly implement car plate lotteries that limit the number of petrol cars licensed each year. The lottery winning rate is smaller than 1 per cent, about 0.0039 per cent in Beijing, so motorists here have no choice but to switch to EVs.

Our findings suggest that the Chinese government’s focus on getting people to drive EVs in larger cities may be misplaced. Smaller Chinese cities demonstrate a desire for cheap, electrified mobility that could be satisfied there and across the world, particularly the burgeoning towns and cities of the developing world.