This year’s Auto Shanghai show signaled the end of the internal combustion engine era in China, as domestic electric vehicle (EV) brands drive change across the sector and leave foreign companies in the dust, analysts and industry insiders said.
Government support for EVs and growing interest from a vast consumer base has assured Chinese companies’ dominance of their home market, the world’s largest — and they are now beginning to set their sights overseas.
Shanghai has shown that Chinese brands “can compete with all of the legacy automakers in every way — performance, quality, comfort, there’s nothing they can’t do,” EV specialist Elliot Richards said, jokingly adding that he had seen “a lot of worried-looking German men wandering around.”
Photo: Reuters
“I think this show marks the end of the internal combustion engine and the beginning of the EV era,” he said.
EV companies are well aware that they are closing in on their fossil-fueled predecessors.
“We regard high-end petrol vehicles such as Mercedes-Benz, BMW and Audi as our main competitors,” said William Li (李斌), CEO of the “Chinese Tesla” Nio Inc (蔚來汽車).
Photo: AP
EVs last year made up one-quarter of vehicle sales in the country, a year-on-year increase of 94 percent, the China Association of Automobile Manufacturers said.
CHINA BOOM
Despite a downturn across the global auto sector, Li said he thought that the market share of EVs in China could increase to more than 40 percent this year.
In Shanghai, dozens of new models were on display from new and legacy automakers alike.
“The future is very much here now,” said Mike Johnstone, vice president, commercial at Lotus Cars Ltd.
“There’s a lot of proliferation of electrified products [in China], and it’s changing the entire market,” he said.
‘HEAD START’
China has dedicated huge resources to the industry.
“They skipped developing petrol engines, because they can’t compete with the rest of the world,” Richards said. “So they thought: ‘[With EVs] we can get a head start in front of everyone else.’”
The country began investing heavily in associated technology from the early 2000s.
“It’s ingrained in the nature of the country’s economic system: The Chinese government is very good at focusing resources on the industries it wants to grow,” journalist Zeyi Yang wrote in the MIT Technology Review.
Central and local authorities have poured billions of US dollars into subsidies and tax breaks, and allocated public transport contracts to EV companies.
The supporting infrastructure was built too; the government says there are now more than 5.8 million charging piles in China.
Guangdong Province alone has about three times as many public chargers as the whole of the US, Bloomberg data showed.
“In general, there are still a lot of preferential policies ... for the production and sale of electric vehicles,” said Li, using as an example the waiving of expensive license plate fees in some cities.
Those policies have applied to foreign brands, too. That tactic helped lure industry leader Tesla Inc to Chinese shores, bolstering the sector’s reputation and sparking further competition.
Nowadays, more than 94 brands offer more than 300 models in the Chinese market — “the most vibrant globally,” Counterpoint Research says.
COST MATTERS
Some are smashing the cash barrier that put EVs beyond the means of the average consumer. In Shanghai, China’s Geely Holding Group Co (吉利控股集團) exhibited its boxy Panda Mini — including a bright yellow one with the phrase “What the duck” emblazoned on its side. The cheaper versions cost about US$5,800.
Homegrown technology could drive prices down even further. Battery giant Contemporary Amperex Technology Co Ltd (CATL, 寧德時代新) has developed a cell that uses sodium instead of lithium ions, the former both more abundant and cheaper than the latter.
Just before the show opened, CATL announced those batteries would be incorporated into Chery Automobile Co Ltd’s (奇瑞汽車) vehicles.
RIPPLE OVERSEAS
All this is being watched closely by foreign competitors.
Brands within the Chinese market are “setting the benchmark now” for others, Johnstone said.
Chinese EV companies have already begun to make inroads abroad. The biggest of them, BYD Co (比亞迪), set up shop in Norway then expanded onward, and others are following.
The technological sophistication of Chinese-made EVs is combating old stereotypes around quality that foreign consumers might harbor, Zeekr Intelligent Technology Co (極氪智能) Europe CEO Spiros Fotinos said.
“Consumers are seeing a lot of innovative safety technologies, with driver assist systems that are really cutting edge,” he said.
NOT A SURE THING
However, Richards said that Chinese automakers’ success in the West is not “a done deal,” as they would have to adapt to the market.
“Karaoke machines in cars, for example — very popular in China, not so popular in Europe,” he said.
Johnstone said automakers with “heritage and history” that welcomed in the electric era would remain competitive.
“Brands that have been around for a number of years ... will continue to live in the future as well,” he said.
DIVERSIFICATION: The chip designer expects new non-smartphone products to be available next year or in 2025 as it seeks new growth engines to broaden its portfolio MediaTek Inc (聯發科) yesterday said it expects non-mobile phone chips, such as automotive chips, to drive its growth beyond 2025, as it pursues diversification to create a more balanced portfolio. The Hsinchu-based chip designer said it has counted on smartphone chips, power management chips and chips for other applications to fuel its growth in the past few years, but it is developing new products to continue growing. “Our future growth drivers, of course, will be outside of smartphones,” MediaTek chairman Rick Tsai (蔡明介) told shareholders at the company’s annual general meeting in Hsinchu City. “As new products would be available next year
At a red-brick factory in the German port city of Hamburg, cocoa bean shells go in one end and out the other comes an amazing black powder with the potential to counter climate change. The substance, dubbed biochar, is produced by heating the cocoa husks in an oxygen-free room to 600°C. The process locks in greenhouse gases and the final product can be used as a fertilizer, or as an ingredient in the production of “green” concrete. While the biochar industry is still in its infancy, the technology offers a novel way to remove carbon from the Earth’s atmosphere, experts have said. Biochar could
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares yesterday rallied 2 percent on the local stock market after Nvidia Corp said the contract chipmaker would be the sole supplier of its latest graphics processing chip, defusing speculation that Intel Corp would get a share of the orders. TSMC’s share price climbed to NT$562, snapping a three-day losing streak. It outperformed the benchmark index’s 1.18 percent gain. Net purchases by foreign institutional investors yesterday totaled 8.37 million shares, reversing net sales of 2.9 million shares on Thursday. The rebound follows Nvidia’s announcement that its latest artificial intelligence graphics processing unit (GPU), codenamed H100, would
Taiwan is expected to be the third-largest market for Singapore-based DBS Group Holdings Ltd, after DBS Bank Taiwan (星展台灣) completes its acquisition of Citibank Taiwan Ltd’s (台灣花旗) consumer banking business in August, a bank executive said yesterday. Taiwan would rank after only Singapore and Hong Kong in terms of profit contribution to DBS, followed by China, India and Indonesia, DBS Taiwan general manager Ng Sier Han (黃思翰) told a media briefing in Taipei. DBS Bank Taiwan expects to retain all 2.77 million Citibank Taiwan cardholders and help them to transition to DBS Taiwan cards over the next 12 months, Ng said. The bank