Highly Charged


Found this issue interesting? Share on your social network!

If you expect to own an electric car in the coming years, there’s a high probability that it will be made in China. China is rapidly expanding its annual production of electric cars, and is on track to manufacture more than 8 million vehicles by 2028, more than Europe and North America combined, as local companies and startups race to build new factories.

Tesla is the leading brand in the Electric Vehicle (“EV”) category, selling one in three of its cars in China, and inspiring a large group of local challengers, including the established carmakers (notably Volkswagen, GM, Volvo, Mercedes and local brand BYD Auto who enjoy first mover advantage), new entrants who have had success in other categories (eg smartphone brands, Xiaomi and Oppo), and a dazzling array of new startups, notably NIO, Li Auto, XPENG and WM Motor. In addition, it seems that almost every well known Chinese brand is racing to participate in the EV supply chain, including Alibaba, Tencent, Meituan, Bytedance, Huawei and Baidu.

According to Week in China “the barriers to entry are eroding. It is generally accepted that electric vehicles are easier to build than gasoline-fuelled cars, with far fewer parts, while rapid shifts in consumer behaviour are transforming the landscape too”. And to provide extra impetus to the growth of the EV sector, the Chinese Government insists that only new energy vehicles or hybrids can be sold after 2035 and has provided support for a nationwide rollout of over 800,000 public charging stations.

WiC concludes with “after years of failing to close the gap on carmakers from the US, Europe and Japan, Chinese manufacturers see a clear opportunity to leapfrog their rivals, building on millions of domestic sales to set global standards and take their new brands into international markets. This is a ‘race’ that will not just impact the business world but reshape geopolitics – particularly when you consider how the new cars will incorporate cutting edge technologies like 5G and AI”.

If car manufacturing is a leading indicator of global economic strength, as it has been for the past century, the accompanying chart suggests that China will be an irresistible force in the years ahead.

Found this issue interesting? Share on your social network!

Leave a Reply

Your email address will not be published. Required fields are marked *