Chinese manufacturers step up a gear in electric car market

Welcome to one of the most sophisticated car plants in the world. This is Zika, a luxury brand of electric vehicles. Only 2000 employees work in this 130 hectare factory. As almost everything is automated, new technologies like 5G and AI mean we can constantly watch over the quality and efficiency of our production line. This production site opened just three years ago and can now assemble one vehicle every minute. Almost all the car parts, from engines to batteries, are bought locally from China. On this production line, we assemble the batteries and electric motors automatically. This is a crucial stage for our cars. We use batteries supplied by the best manufacturers in China. China produces 3/4 of car batteries in the world. Indeed, the country doesn’t just make the finished product, but everything in between. It’s a huge advantage for car makers here who can drastically reduce their production costs and expand internationally. Today, around 10% of our cars are sold abroad. In the future, we hope to increase our exports and gain a bigger share of the international market. At the forefront of China’s global ambitions is the European market. One out of two Chinese car exports is already sold in Europe and with this sudden rise the EU is worried about unfair commercial practices. Global markets are now flooded with cheaper Chinese electric cars and their price is kept artificially low by huge state subsidies. This is distorting our market. The Commission is launching an anti subsidy investigation into electric vehicles coming from China. In just ten years, Beijing has showered the car industry with €25 billion in tax cuts. One consulting company estimates that the total amount of subsidies could be double this number. China has since emerged as an industry leader. For example, the country’s number one car maker, BYD, made more electric vehicles than Tesla in the last quarter of 2023 and China dethroned Japan to become the world’s top car exporter. Whilst creating winners. The cutthroat industry has also left behind a trail of losers. This is one of China’s numerous car cemeteries, a place where thousands of electric vehicles have been abandoned. Taxi companies quickly discard poor quality models with weak battery life. These are the remnants of hundreds of car companies that went bankrupt. Competition is still tough. Do everything to stand out in this Zika showroom in Shanghai. The focus is on high end finishings. It’s a touch sensor. Look, it opens by itself. When you put your foot on the brakes, the door automatically closes. This 27 year old is about to buy his first sedan. He’s going for an EV, but not necessarily for environmental reasons. I don’t have a particular preference between electric or petrol cars. It’s just that now, for the same price, EVs offer a much better user experience. Electric vehicles have become the go to option for first time buyers. It helps that they can get up to €4000 in tax breaks. That’s around 10% the price of this model. Last year this was our best selling model in the plus 40K euro category. We also sell this one in Europe. A range of options are available to seduce prospective buyers, such as state-of-the-art microprocessors and voice recognition. In China, our clients want exceptional user experience. That’s why we integrated interactive AI into the car system. Because technology makes life beautiful. And technology isn’t just about gadgets. Take this blue car for example. It doesn’t seem that special, but if you look inside, you’ll see that it’s driving itself. Self driving vehicles are gaining popularity here. One study estimates some 12 million will be on Chinese roads in the next 15 years, mostly to cater to car hailing apps and their clients. I feel so much safer than with a driver. This car can’t drive over the speed limit. The driving is very smooth. It’s a magical experience. In order to develop self driving, EVs Chinese startup We Ride raised almost €600 million. Our cars have 12 cameras and three laser radars, one on top and one on each side. That way there are no blind spots. They have 360 vision. I think our vehicles will replace traditional taxis in the future. Last year, 40% of cars sold in China had self driving features, another technological asset that could help the country cement its status as the world leader in electric vehicles.