China’s rapid ETC boom

Today, China is home to the biggest ETC (Electronic Toll Collection) market worldwide. This is bolstered by its high penetration rate and rapidly growing car parc. From 2018 to 2019 alone, PTOLEMUS monitored an astonishing increase of 166% in ETC subscriptions resulting in a market penetration of almost 80 % on the vehicle parc today. And given the potential transmission of COVID-19 at toll booths, the Chinese government is multiplying its efforts to expand the ETC market throughout the country at a rapid pace.

Since its implementation, ETC’s reputation has changed significantly. Today’s drivers are interested in the opportunity to skip the queue on toll booths, making ETC an attractive proposition. Furthermore, discounts on the toll fee when utilising ETC, usually offered at 5% off the toll price, are also encouraging the switch from manual payments. 

The Chinese government has paved the regulatory way for ETC adoption

How did we get here? China passed a regulatory change in 2020, promoting the usage of ETC and sparking the removal of manual toll booths.  Alongside this, the government implemented processes through which to create a unified toll price system. Previously, individual provinces retained control over their own pricing structure; some provinces based pricing on number of axels and others on mileage driven. Since the new legislation passed, all road prices are calculated using actual mileage.

Overall, the business case for ETC in China has been focusing on customer-oriented models that include discounts, mobile apps, and wide ETC availability through major banks and institutions, which provide on-board units (OBUs0 for free. 

In particular, the increased penetration of smartphone tolling applications, driven by several mobile payment providers entering the market, is making ETC more accessible for everyone. The rise of video tolling eliminates the need for a device, reduces costs for users and providers, and so will increase ETC penetration in the near future.

Furthermore, the authorities are also promoting the development of line-fitted ETC technology. Since the new legislation became operative in July 2020, all OEMs are required to offer a line-fitted ETC solution in their manufactured vehicles. But until today, having an ETC compatible device is still not mandatory for the consumer – neither through line-fitted systems nor aftermarket devices.

Today,  the average ETC utilisation rate in China has exceeded 70%

And we anticipate further growth as the reduction of congestion issues is far from being met. But will the government reach its grand plan to implement 100% ETC usage until 2025 on all its toll road networks? How much can China’s ETC market still grow? What are the hurdles the future market could face?

Want to know more?

PTOLEMUS explores the growing penetration of ETC in China, plus much more, in its new Electronic Tolling Global Study. Download the abstract today to learn about how the study can help your company’s electronic tolling and road usage charging strategy.