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Chinese technology companies promise to radically change the automotive sector through smart electric cars – Economy

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“The period of imitating China has ended,” Jochen Singbeil, marketing director of German manufacturer Volkswagen in the Asian country, told Lusa. “Innovation happens here,” he added.

Carlos Martins, who runs a factory for Portuguese auto components company Sodesia in the country's northeast, warned that the emergence of Chinese brands, some of which were founded less than a decade ago with their eyes on the electric car sector, promised to have a “major impact” on Industry. China. .

Carlos Martins, who has lived in the country for ten years, highlighted to Lusa the “completely different” working speed of local manufacturers, unlike their European counterparts, which have “very heavy” organizational structures and take “a long time”. To implement the modifications.

Last year, Volkswagen's ID series electric models only accounted for 3% of the market share in China's electric vehicle sector, accounting for 50% of the German manufacturer's global sales.

Electric cars represented 24% of new car sales in China in 2023, according to industry data. If hybrid cars are included, the share of new energy vehicles in total sales reaches 36%.

Volkswagen is preparing to launch new models in partnership with Xpeng, the Chinese electric car brand for which it has paid 630 million euros for a 4.99% stake in 2023.

“We can no longer do everything on our own,” Singbehle admitted.

The debate revolves around the reshaping of cars by Chinese technology companies Huawei, Xiaomi or Baidu, from a private means of transportation powered by an internal combustion engine, into a technological device powered by electric power.

“Create a mobile home” is, for example, the slogan of Li Auto, a Chinese manufacturer whose cars are equipped with gesture control technology, a karaoke system, electrical outlets, a refrigerator or a 17-inch OLED panel where you can watch movies or play games.

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“Traditional brands are bringing analogue games to the digital playground,” Tu Lu, director of consultancy Sino Auto Insights, described to Lusa. The title of the New York Times report was equally emphatic: “For China's Auto Market, Electricity Isn't the Future. It's the Present.”

Chinese dominance also extends to the battery industry. The Chinese companies CATL and BYD are two of the largest manufacturers in the world. Beijing still maintains strong control over access to essential raw materials.

This is the result of more than a decade of subsidies, long-term investments and infrastructure spending. “It took focused industrial policy, a lot of patience and a lot of capital,” Tu summarized.

In 2014, Chinese leader Xi Jinping stated that developing electric vehicles was the only way for China to become an “automotive powerhouse,” which became part of the five-year plans set by the Chinese Communist Party. In the following years, hundreds of electric vehicle brands were created in the country. .

This has generated excess production capacity and a problem of financial sustainability: more than 60% of Chinese electric car manufacturers sell less than ten thousand cars annually.

Due to the ongoing fierce price war, only Tesla and BYD in North America are able to remain profitable, which will lead to consolidation in the sector in the coming years.

“No other region in the world is seeing the transformation of the automobile industry as quickly as in China,” Volkswagen CEO Oliver Blume said at a press conference at the China Auto Show.

“This market has become a high-performance hub for us. We have to work harder and faster to maintain it.”

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