2023-04-22 09:03:35
The era of gasoline cars is coming to an end in China. Local manufacturers of electric vehicles are shaking up the sector and leaving international companies far behind, according to analysts and industry experts interviewed by AFP.
Government support for electric vehicles coupled with growing consumer interest has enabled Chinese companies to dominate their domestic market – the largest auto market in the world.
At the Shanghai International Motor Show on April 19, 2023 / AFP
Shanghai, where a motor show is organized every two years – a must-attend event for global manufacturers – has shown that Chinese brands can “compete with all traditional car manufacturers at all levels – performance, quality, comfort, it there’s nothing they can’t do,” said electric vehicle specialist Elliot Richards.
For Mr. Richards, “this show marks the end of the internal combustion engine and the beginning of the era of electric vehicles”.
Electric car companies are well aware that they are beginning to catch up with their fossil-fuelled predecessors.
Nio CEO William Li at the Shanghai International Motor Show on April 19, 2023 / AFP
“We see high-end gasoline vehicles such as BMW, Mercedes Benz and Audi as our main competitors,” William Li, CEO of “Chinese Tesla” Nio, told AFP.
Sales of electric and hybrid cars doubled in 2022 and represent more than a quarter of vehicles sold, a level never seen, according to the Chinese Federation of Individual Car Manufacturers (CPCA).
Despite the global slowdown in the auto sector, electric vehicles in China will account for more than 40 percent market share this year, Li said.
At the Shanghai Motor Show, dozens of new models were on display, from both new and old manufacturers.
A Lotus Eletre being recharged at the Shanghai International Motor Show on April 19, 2023 / AFP
“The future is right here, now,” said Mike Johnstone, a senior executive at British luxury brand Lotus, to AFP. There is now a proliferation of electrical products in China, “and this is changing the whole market”.
– “Getting ahead” –
And for good reason: Beijing has devoted enormous resources to this industry.
“They gave up developing gasoline engines” because they couldn’t compete with the rest of the world, analyzes Mr. Richards.
“So they said to themselves: + With electric vehicles, we can get ahead of everyone else +”.
Starting in the 2000s, central and local governments pumped billions of dollars into subsidies and tax breaks, and awarded public transport contracts to electric vehicle companies.
“It’s rooted in the nature of the country’s economic system: the Chinese government is very good at focusing resources on the industries it wants to develop,” writes Zeyi Yang in the MIT Technology Review.
Charging stations for electric cars in Shanghai, China, April 19, 2023 / AFP/Archives
The infrastructure necessary for the development of this sector has also been developed. According to the government, there are now more than 5.8 million charging stations in China.
Guangdong province (around Guangzhou) alone has about three times as many terminals as the entire United States, according to data from Bloomberg.
– 94 brands, 300 models –
Foreign brands have also had a taste of these preferential policies.
These have even succeeded in attracting the American Tesla, leader of the industry, reinforcing the reputation of the sector and stimulating competition.
Today, the Chinese market – “the most dynamic in the world” according to Counterpoint Research – has more than 94 brands that offer more than 300 different models.
All this is closely scrutinized by foreign competitors, forced to reinvent themselves in this highly competitive environment.
The brands present on the Chinese market “serve as a reference” for others, assures Mr. Johnstone, of Lotus.
And the Chinese are now eyeing foreign markets.
This is the case of BYD, one of the biggest sellers in the country, which markets passenger cars in around fifty territories, including Europe, one of its priorities as for many other Chinese groups.
An electric Neta S at the Shanghai International Motor Show on April 19, 2023 / AFP
The Shenzhen group (southern China) has set itself the goal of exporting 300,000 vehicles worldwide this year, against 50,000 last year, according to public television CCTV.
The Zeekr brand, which belongs to the local automotive giant Geely, announced for its part that it would market the first models in Sweden and the Netherlands at the end of the year, before arriving in other European countries.
Especially since mentalities around the quality of Chinese production are changing, says Spiros Fotinos, general manager Europe of Zeekr.
“Consumers are seeing a lot of innovative safety technologies, with driving assistance systems that are really cutting edge,” he told AFP.
The stand of Chinese manufacturer Hong Qi at the Shanghai International Motor Show, April 19, 2023 / AFP
But the game is not yet won, warns Elliot Richards, who notes that Chinese automakers in the West will have to adapt to this market, which is very different from theirs.
“Karaoke machines in cars, for example, very popular in China, are not so popular in Europe,” he says.
Be that as it may, ambition is not to be outdone.
The Asian giant, the world’s main emitter of greenhouse gases, is aiming for car sales in 2035 mainly composed of so-called non-polluting vehicles.
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