Alarmed at the prospect of China’s automakers squeezing out domestic players, the EU and US have put up trade barriers against them.
BEIJING – It took just 30 seconds for self-confessed Xiaomi fan Ethan Zhang to place an order for the Chinese consumer technology company’s first electric vehicle , the SU7, at its much-anticipated launch on March 28, 2024.
Mr Zhang said: “EVs are a valuable opportunity for China to lead in the automobile industry, so of course we should support made-in-China products.” The Zeekr X EV comes loaded with high-tech features, including digital video parking assistance and a monitoring system that triggers warnings if it detects that the driver is tired or not attentive. The Chinese brand is among the best-selling EV brands domestically.Industry insiders and experts believe the outlook is mixed.
A national subsidy scheme for new-energy vehicles from 2009 to 2022 got the EV industry off to a slow start but it eventually boosted sales of these cars in the Chinese market, from 1,440 in 2010 to 8.1 million in 2023, according to data from the International Energy Agency. Car reviewer Zhou Haoran, who runs a YouTube channel called Telescope that showcases primarily Chinese cars, cited the example of the Wuling Hongguang Mini EV manufactured under a joint venture between SAIC Motor, General Motors and Guangxi Automobile.
But the opposite happened. Mr Zhou, who previously worked in public relations for Nio, said that at the time, he had prepared a briefing for the production vice-president of the Shanghai-headquartered EV company to say that Tesla’s move would be good for Nio. Ms Quo in the BYD Sea Lion 07, whose sensors show the surroundings on a screen, helping her to navigate turns more safely.She settled on BYD because of the size of the automaker – it is the global leader in EV manufacturing – which means it would offer more convenience and peace of mind when it comes to after-sales maintenance. Space, comfort and value for money were other factors, she said.
“But it’s not going to be equal, and this will muddy the development of Chinese EV brands,” he said, alluding to the trade barriers that Chinese manufacturers face in entering key EV markets. The EU in July imposed tariffs of up to 47.6 per cent on EVs imported from China. In the US, where Chinese players have a negligible presence, tariffs will go up to 102.5 per cent from August.
China has hit back at such criticisms of overcapacity, arguing that the US and EU also subsidise their own EV industries. A BYD Seal car at a store in Milan, Italy. A study has found that BYD makes about €13,000 more in profit on each Seal U hybrid SUV sold in the EU than in China.China also argues that its scale, cost advantages and expertise in EV-making can help drive the world’s transition towards clean energy.
Factories producing Chinese EVs have been built or announced in a range of countries, including Spain, Hungary, Brazil, Mexico, Thailand, Indonesia and Uzbekistan. This is an issue that top Chinese EV maker BYD is well aware of, as it seeks to grow its 17 per cent global market share of pure-electric vehicles. Market leader Tesla currently has a 20 per cent share.
For instance, SAIC’s MG4 hatchback – which is by far the best-selling Chinese EV in Europe but sells only about 300 cars a month in China – has numerous physical controls, unlike typical Chinese EVs, which are often fitted with larger touchscreens and touch-sensitive buttons.“MG as a brand is still not dead among the British and European public. People know that it was a prominent brand back in the 1980s and 1970s, so the brand familiarity helped them a lot,” Mr Zhou said.
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