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Home Infrastructure Transportation

New EV shock in China for global automakers in 2022

Global carmakers struggle to catch up with EV trend in China

Sunil Bolar by Sunil Bolar
May 26, 2022
in Transportation, The Global Economics, Top Stories
Reading Time: 3 mins read
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New EV shock in China for global automakers in 2022

New EV shock in China for global automakers in 2022

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Global automobile giants looking at dominating the EV market in China such as Volkswagen and General Motors are falling behind local players in a booming market. China is a key country for funding and developing electric and autonomous vehicles.

Tianna Cheng, a Beijing office worker, said she did not consider buying an overseas electric crossover when she was choosing which car to buy. She said that instead, she found herself choosing between a BYD car and a Nio, both Chinese brands. 

She also mentioned that her choice may have been different if she was buying a gasoline powered car. Cheng said that other than Tesla, she found few foreign brands using advanced smart technology.

China is the worlds’ biggest auto market, valued at approximately USD500 billion, and EV sales appear to be booming.

According to data from the China Association of Automobile Manufacturers, the number of EVs and hybrid cars more than doubled in the first four months of 2022 from a year earlier,, to 1.49 million cars.

Cleaner technology cars accounted for 23 percent of China’s passenger car market, where, reflecting a decline in the demand for gasoline cars, overall vehicle sales declined by 12 percent. 

With the exception of Tesla at number three, there are no other foreign brands among the top ten automakers in the New Energy Vehicle (NEV) segment this year, according to data from the China Passenger Car Association.

Aside from Tesla, all the rest are Chinese brands, ranging from BYD and Wuling to Xpeng and Chery. BYD, the market leader in China has sold more than 390,000 EVs in the country this year, which is three times more than the global leader Tesla. Traditional carmaker Volkswagen, in a venture twitch FAW Group, stood in 15th place for EV sales this year.

Global brands have dominated traditional car sales in China, typically winning a market share of 60 to 70 percent of sales. 

Commenting on the challenge faced  by traditional car makers in China, Makoto Uchida, CEO of Nissan, said that some brands could disappear in three to five years.

Uchida further said that local brands were growing stronger, and the quality of EVs made in China had improved rapidly. He added that China would see massive transformation, and car makers would have to be nimble with the design and development of new models, failing which they would be left behind.

High Tech native EV models

A former executive from Chrysler,Bill Russo, who now heads Automobility, a consultancy in Shanghai, mentioned that global brands would need to strategize rapidly, as they controlled less than 20 percent of the only growth auto market in China.

Russo said that Chinese brands are winning the race in the EV car market, and that consumers were shifting from traditional cars to cars that are essentially smartphones on four wheels. He added that traditional carmakers were facing difficulty in catching up with their Chinese counterparts.

Speed vs Tech?

With a USD55 billion spend globally on EVs by 2026, Volkswagen launched its new generation ID. cars in China early last year. The company aims to sell 160,000 to 200,000 cars this year, although it had sold only 33,000 vehicles until the month of April.

A major concern for foreign brands is that their new EVs have been designed and developed with US and European markets in mind, with a focus on performance. 

This strategy has not worked well in China, where the emphasis is on smart technology and vehicles that are smart cars, according to a source close to Volkswagen.

Volkswagen said EV demand in China was strongly linked to the “smart car” theme, adding that it was investing in local R&D, especially in software.

In a statement, the company said that its renewed strategy will enable it to achieve growth targets for China. Volkswagen also said that it wants to be the leader in e-vehicles, and ensure that it retains the number one position in China in future.

 

Via: short URL
Tags: automobileschinaEVtransportation
Sunil Bolar

Sunil Bolar

Sunil is a creative person who combines his love for writing with tech and business.

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