Features

China's EV revolution


Looking back through the last few years of cars from Chinese manufacturers, one salient theme ran through them. They looked like copies of Western-designed cars. Take the Land Wind X7, for example, which is blatant replica of Land Rover’s Range Rover Evoque. Or the sportcar CH Auto Lithia Sports; a clear rip-off of Audi’s R8 supercar.  

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Land Wind X7 (left) vs Range Rover Evoque (right) | Photo: IBT

Many lawsuits later (Land Rover was eventually able to get a court order for the Land Wind X7 to cease production), with a new era of Chinese electric vehicles (EVs), things are looking different. China has ramped up the market on the technology side, doing things differently in many ways. 

When it comes to power outputnot every EV is a Tesla-lightening-speed luxury sedan with 0-100km acceleration of under 5 seconds – that means bare-bones EVs start at just $6000 in China. And as far as charging goes, there is one fast-charging public facility for every 12 cars in China, plus charging is cheap. You can’t ignore the huge financial incentive from the Chinese Government: in a city like Shanghai, it costs around 100,000 yuan (NZD$21,000) to buy a license plate for a combustion fuel-powered car; for an EV, a plate is free.  

Western consumers may surmise that China is still struggling on the design front, howeverAiways’s U5 looks like Tesla’s Model X. BJEV’s BJ40 is an electric version of the Suzuki Jimny, BYD’s e6 appears to be modelled on a Honda Jazz, the Lynk & Co 01 appear to be the love child of a Volvo XC40 and the Porsche Macan (and so does Nio’s ES8).  

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Lynk & Co 01 or Porsche Macan? | Photo: Car Scoops

Jerry Clode, a China branding expert who has worked with the auto industry for decades, however, believes the view of “copying” Western carmakers’ designs isn’t the reality – it’s just the way we see the world through an American point of view”. That is, the current iterations of EVs were born of a Silicon Valley viewpointand that has created an “exemplar in the category”.  

Moving forward, Chinese carmakers’ EVs do have their own unique selling points. China now has its own design aesthetic, its own domestic market, and – importantly – a much more accessible price point for EVs than Western carmakers can offer.  

Let us take a step back. China is the largest manufacturer and buyer of electric vehicles in the world. China is Tesla’s second-biggest market, selling 120,000 units last yearDemand for cars across China continues to soar with its growing middle class and developing its own EVs is a strategy to reduce its reliance on oil imports (it imports 10.85 million barrels per day making it the largest importer of fuel in the world)

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Tesla's Model 3 is made just outside of Beijing in the Tesla China factory | Photo: Reuters

The Chinese Government, also, is thought to be harnessing the power of central planning with its EV rollout; showing the world how to fix the problems of EV adoption (such as insufficient charging infrastructure and the fear of running out of battery power known as “range anxiety”)  

The current best selling EV in China is the Wuling Hong Guang Mini EV, a joint venture with General Motors that costs just 28,800 yuan (NZD $6200)It’s a no-frills mini EV and it is outselling Tesla two to one, and its design reflects what you’re paying forAt the other end of the market (i.e. the Tesla competitors) is the Xpeng P7, which boasts a 0-100 acceleration of 4.3 seconds but costs just 229,000 yuan (NZD $49,000).  

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The Wuling Hong Guang Mini EV costs $6200 when converted to NZD | Photo: Wuling

According to MarketWatchChinese EV companies are just scratching the surface of total addressable demand in ChinaIf we look at take-up of internet in China, they skipped straight to smartphones [and bypassed plug-in connections like dial-up and broadband], because of the tech,” says Clode. “They leapfrogged over a step. The same thing is happening with EVs and the middle class. The growing demand for cars in China has skipped petrol and gone straight to EVsbecause China has supported development of megacities with the appropriate infrastructure to support their use. By 2030, China has imposed a mandate on automakers for EV sales to make up 40 percent of all sales.  

China’s model of EV production, Clode argues, is all about supply. “The reality is, Tesla etc can’t supply China with the EVs it needs to reach that 40 percent goal,” he says. “China has a huge urban challenge that must be solved. Nowhere else in the world, in human history, have cities grown as quickly as China. The environmental impacts of that are profound, and EVs can be seen as a natural policy in responsible governance.”  

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A charging station in Beijing | Photo: QZ

China’s mass production of EVs is what will, eventually, bring the production of EVs down in countries like New Zealand too. Currently, an EV is a luxury for the wealthy. They must generally be bought new, or near new, and don’t generally filter down through the traditional Japanese import model of car ownership in New Zealand. “China will make the EV category more competitive,” says Clode. “Arguably this will provide cheaper options [for all of us]. Think of Tesla like Apple. It’s the premium in the market, and it has spawned the need for other ‘cheaper but still good’ brands of cell phones like Huawei and Oppa.”  

It has been reported many Chinese EV models will make it down to New Zealand, but so far that hasn’t eventuated. It will be something we’ll see in the next five years, Clode says. According to Energy Digital, the recent slowdown of car production in the US (due to the Covid-19 pandemic) will help the migration of Chinese EV brands into the WestThe pandemic is likely to hasten consolidation of Chinese brands in 2022 and 2023,” it reported. Yet Chinese brands have one problem in launching here: they need to create what are known as “odourless brands” if they’re going to succeed in Western markets.  

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A car brand like Honda is known as "odourless" and without national allegiance | Photo: Honda

“When Chinese brands extend beyond their domestic market, they tend to struggle and go down the ‘nationalistic’ route,” Clode says, explaining the emphasis on their place of origin – something often done in the European auto world, e.g. Audi and BMW with Germany. Yet as Chinese carmakers are not heritage brands, they would be better off following in the footsteps of the likes of Toyota and Honda. “They aren’t marketed as ‘Japanese’ brands, so you don’t think of them like that.”   

 - Asia Media Centre