Thursday, July 25, 2024
HomeEconomyIn 2030, more than 30% of them will be Chinese.

In 2030, more than 30% of them will be Chinese.

Published on

Chinese auto companies, which have historically been of little importance in the global market, are beginning to make a strong appearance in the electric car industry.

The phenomenon has caught the world's attention, especially after President Joe Biden's tariff announcements in May, which highlighted China's rapid rise in the sector, followed by the European threat to increase tariffs as well.

Threat to electric car manufacturers

China's high-tech, affordable electric cars pose a serious threat to giants like Ford, General Motors, Volkswagen and even Tesla.

A recent report by consulting firm AlixPartners predicts that Chinese manufacturers will capture 33% of the global auto market in 2030, up from 21% today.

This means that one in three cars sold in 2030 will be from a Chinese brand, compared to one in five today.

Impact on traditional manufacturers

This growth is worrisome for traditional manufacturers, who see their market share at risk. According to AlixPartners, these manufacturers need to adapt quickly or face irrelevance.

Andrew Bergbaum, global co-head of the industrial and automotive practice at AlixPartners, highlights that the industry is undergoing a transformation due to the rapid maturation of Chinese manufacturers, who operate with different principles and approaches and dominate battery technology.

Growth in the Chinese market and the resulting global expansion

Much of this growth will come from the Chinese market, where local brands have outpaced European and American rivals. However, Chinese automakers are also focused on aggressive global expansion.

AlixPartners expects China's share of car sales outside China to rise from the current 3% to 13% in 2030. In recent years, China has overtaken Germany and Japan as the world's largest car exporter.

See also  Using bank cards will become more expensive! Find out about the new prices
Chinese electric cars - male
Chinese Electric Cars – Zeekr

Competitive advantages of Chinese manufacturers

Chinese manufacturers are investing heavily in the electric vehicle industry and the infrastructure that supports it, from battery manufacturing to lithium mining. These developments have allowed Chinese manufacturers to advance in both costs and technology, outpacing the competition.

In contrast, in the United States and Europe, electric car prices remain high due to a lack of economies of scale.

On the other hand, Chinese manufacturers enjoy a 35% cost advantage, thanks to lower labor costs and extensive vertical integration in areas such as batteries.

Moreover, generous subsidies provided by the Chinese government, totaling nearly a quarter of a trillion dollars between 2009 and 2023, played a crucial role in this success.

Models like BYD Al-Nawraswhich sells for around $10,000 in China, demonstrates this cost advantage by offering impressive build quality at low prices. This model will go on sale in Portugal in 2025.

Chinese Electric Cars - BYDChinese Electric Cars - BYD
Chinese Electric Cars – BYD

Technology and the ability to innovate rapidly

Chinese manufacturers are also focusing heavily on technology and interior design. Models like the Zeekr X, which includes a sliding touchscreen, automatic doors and a cooled center console, are available for around $30,000 in China, offering advanced features at competitive prices.

Moreover, they renew their products at an amazing speed, developing new models in about 20 months, compared to 40 months for traditional manufacturers.

Global Presence and Future Challenges

Although Chinese brands already have a significant presence in Europe and South America, their influence in the United States is limited. Alix Partners China's share of the North American market is estimated to rise from 1% today to 3% in 2030, partly due to higher tariffs aimed at protecting American manufacturers.

See also  Farol ends the semester with a loss of 1.3 million

The big question is whether tariffs and geopolitical tensions will prevent American and European consumers from accessing more advanced and affordable Chinese electric cars, or whether competition will force the global auto industry to improve its offerings to match the level of innovation and cost from China.

New generation BYD Song Plus electric car with a range of up to 2,000 kilometers


Latest articles

NEC is developing technology that measures sea level from greater distances.

a NEC Company Developed sea ​​level measurement technology Highly accurate, from long distances and...

Archaeology: – Mysterious face causes a stir

A mysterious face carved into stone was...

More like this

NEC is developing technology that measures sea level from greater distances.

a NEC Company Developed sea ​​level measurement technology Highly accurate, from long distances and...

Archaeology: – Mysterious face causes a stir

A mysterious face carved into stone was...