Manufacturing plants in China will manage to break even in production of electric cars in 2025 and then achieve a 5 percent profit margin in 2026, said Hou Yankun, chief China strategist and head of Asia autos research at UBS.
This would be later than Germany, which would break even in 2022, but earlier than the US, which won't achieve that status until 2027, according to a report that UBS sent to the Global Times on Wednesday.
Hou noted that the costs of making an electric car will slide with improved production technologies, which will help auto makers break even.
Electric vehicles are taking an increasingly important role in the development plans of global car companies.
At the 17th Shanghai International Automobile Exhibition held in April, the Global Times saw many domestic and foreign car companies display their electric car models, such as Skoda's Vision E and the Model K-EV from Qoros.
According to the UBS report, Volkswagen plans to make one-fifth of its cars run on electricity by the end of 2025, a goal shared by Daimler and BMW.
"Car companies are being more ambitious about electric car production than I expected," Hou was quoted as saying in the report.
China has been promoting the electric car industry in recent years. In the first half of 2017, output stood at 212,000 vehicles, up 19.7 percent year-on-year, xinmin.cn reported on Sunday.
According to the UBS report, China will produce 403,000 electric cars in 2017, up from 336,000 in 2016.
Production will reach about 4.85 million units by the end of 2025, the UBS report noted.
"The electric car industry will have a great impact on the bulk commodity industry, as it will drive up certain materials like lithium, used for making batteries," Hou said, noting that the industry will hurt demand for Platinum Group Metal used for exhaust systems.