As Beijing phases out subsidies for electric vehicles and introduces mandatory EV sales targets, auto companies are striving to make electric cars that Chinese drivers actually want to buy.
With overall auto sales in China falling flat last year, and more companies in the EV arena than ever before, the competition is getting fierce. And that competition was on display last week at the 2019 Shanghai auto show.
Chinese automakers are well positioned to lead as China’s auto sector sees greater adoption of new energy vehicles — a category that includes battery electric, plug-in hybrid and fuel cell vehicles, but today is almost entirely focused on plug-ins. Chinese auto brands have struggled to gain a foothold in the gasoline-powered vehicle market, making up just 10 percent of global sales. But it’s a different story in the EV sector, where Chinese firms are responsible for more than 50 percent of global sales.
China has benefited from a combination of favorable factors, according to Paul Gong, automotive analyst at UBS, “including government subsidies at least at initial stage, customers’ willingness to try new technologies, adequate industry supply chain, fast-rolling charging infrastructure, as well as capital funding by investors of various backgrounds.”
As we covered in previous Squared columns, foreign automakers want to get into on the game in a big way. From Tesla to Volkswagen, global brands are investing billions of dollars in China’s EV market as the country begins to relax restrictions on foreign companies. At the same time, China’s domestic EV markers are making serious moves.
Small and compact sedans are typically sold in the highest volumes in China, according Gong. But as technology has advanced and China’s EV market has matured, companies introducing a wider array of vehicle types than ever before, including medium-sized sedans and SUVs. While China is by far the largest EV market in the world today, the long-term success of the sector rests on companies being able to sell cars based on consumer appeal, rather than their low cost enabled by government support.
With nearly 500 EV companies of various kinds currently operating in China, it would require writing en encyclopedia to outline each of their offerings. So instead, this week’s column looks at Shanghai auto show highlights from four of today's most prominent Chinese EV manufactures.