BEIJING, May 13, 2024
/PRNewswire/ -- At the recently concluded Beijing International
Automotive Exhibition, which drew nearly 900,000 visitors over a
10-day event, Chinese EV brands once again dominated the
headlines.
Some 28,000 foreigners were reportedly on the
scene, with many taking profound interest in Chinese EV brands to
study the models and try to decipher the reasons behind the
popularity of Chinese brands.
Chinese analysts and industry insiders pointed
out that the competitiveness of Chinese EV industry comes from
fierce competition, the advantage of industrial cluster and
entrepreneurship.
There is no "overcapacity," as the issue of
industry capacity will be balanced by the market's invisible hand
given the fierce competition existed in the Chinese market, the
fact that Chinese automakers are not selling their EVs at prices
lower than those billed at the home market and the global gap for
more EVs to realize its green development goals, analysts
noted.
Industrial cluster
There are several aspects of the strengths of the
Chinese EV industries, which produce about 60 percent of the
world's EVs, but none are associated with subsidies, analysts
noted.
The rising momentum of Chinese EV is in part
fueled by the country's investment into its surrounding industries,
experts noted, with the number of companies spanning the whole EV
industrial and supply chain totaling over one million.
Hefei, East
China's Anhui Province, has in
recent years built itself into an assembly center of NEVs, with a
concentration of upper stream and lower stream suppliers providing
the display panel, chips, batteries and artificial intelligence
applications needed for building NEVs in a cost-effective way.
In Changzhou,
East China's Jiangsu Province, the
local industry is closely focused around the manufacturing of power
batteries. In fact, the city has 31 out of 32 major segments in the
making of batteries, which means 97 percent of the total supply
chain spectrum resides in the city, according to a Xinhua News
Agency report in April, citing the city government.
The city has more than 30 leading companies in
national and global division of labor focused on the manufacturing
of electrodes, separators and electrolytes - key parts in making
batteries - with an annual industrial output of over 170 billion yuan ($24.02
billion).
Qin Lihong, co-founder of Chinese EV maker Nio,
told the Global Times that China's
advantage in talent in the EV space is another reason. Nio has
factories in Hefei.
"To develop large number of applications used in
EVs requires huge amount of man power and energy and China happens to be the place in the world
with the most talents skilled in application research &
development (R&D)," said Qin.
"To develop a particular type of motor may need
100,000 man hours, and the West's per unit cost of R&D in EV is
not in the same league with that of China. The resources of EV R&D are
agglomerating toward China," Qin
said.
The allocation of resources has meant Chinese EV
brands are better positioned to roll out their models in a cost
competitive way that their global peers could not, Chinese analysts
said.
As a matter of fact, global auto giant such as
Volkswagen is increasing their investment in cities like
Hefei, to hitch a ride on
China's industrial cluster.
China's vehicle
market got off to a good start in the first quarter of 2024, and
NEV exports reached 307,000 units in the period, up 23.8 percent
year-on-year, according to China Association of Automobile
Manufacturers.
In 2023, China's
NEV exports totaled 1.2 million with an annual growth of 77.6
percent.
Relentless entrepreneurship
Chinese analysts pointed out that Chinese EV
companies also draw their competitiveness from their relentless
pursuit in innovation, despite the fact that the new-energy
industry being a high-risk area, and contributed to the global
transition toward green development by making NEVs cheaper and more
popular around the world.
It is the entrepreneurial spirit that have formed
a part of the engine driving the Chinese EV industry ahead,
analysts said.
Xiaomi CEO Lei
Jun, in a recent interview with state broadcaster CCTV,
revealed that the company has thrown in nearly half of its total
value, at some $10 billion, into the
EV-making adventure to make its SU7, only to bet on a 10 percent
success rate.
Lü Xiang, research fellow at the Chinese Academy
of Social Sciences, told the Global Times on Monday that even as
Xiaomi's initial start with its SU7 is beyond expectation in terms
of sales, there is no telling in the company's eventual success in
the fiercely competitive domestic market.
With Xiaomi's entry into the EV game, companies
such as Tesla and Li Auto has announced cut in their offerings.
Lei said he is not afraid of price wars and is
prepared to take losses but aims to become the world's top five EV
players in the long-run.
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content:https://www.prnewswire.com/news-releases/global-times-decipher-chinas-green-success-competitiveness-of-chinese-ev-industry-comes-from-competition-not-subsidies-analysts-302143415.html
SOURCE Global Times