BYD said on Nov. 1 it sold more than 500,000 electric vehicles in October, setting a new record as the company reported quarterly revenue that exceeded Tesla’s for the first time, and made another leap towards becoming the country’s largest automaker. Meanwhile, nearly a dozen Chinese automakers reported record-breaking sales figures over the month.

Why it matters: The sales figures reflected the increasing popularity of hybrid electric vehicles and the slowing growth of fully battery electric vehicles (BEV) in the world’s largest auto market, as anxiety around EVs running out of power remains a major concern for many buyers.

• Nearly 60% of total BYD sales between January and October were plug-in hybrids (PHEVs), while a growing number of rivals, including Changan-owned Avatr and Geely’s luxury brand Zeekr, are hoping to drive PHEV sales by rolling out similar offerings.
• Sales of passenger PHEVs, which include extended-range hybrids (EREVs), grew 78.5% in China for the first nine months of this year, compared with only a 17.6% growth rate for consumer BEVs, according to figures published by the China Passenger Car Association (CPCA).

Details: BYD set another record just a month after surpassing the 400,000 threshold for monthly sales in September, reporting sales of 502,657 passenger EVs in October (in Chinese). The company’s year-to-date sales volume hit more than 3.2 million cars as of October, bringing it near its annual goal of 4 million car sales.

• This means the EV giant is on track to officially become the number one automaker in China this year, ending SAIC’s nearly two-decade-stay at the top of the country’s rankings. Volkswagen and General Motors’ Chinese partner sold more than 2.6 million cars for the first nine months of this year, down 21.6% from a year ago.
• Geely also announced a sales record of more than 100,000 green vehicles last month, partly driven by strong demand for its luxury Zeekr-branded BEVs (in Chinese). Volvo’s parent on Oct. 30 unveiled its Leishen EM-i hybrid EV system, providing its vehicles with a longer driving range of up to 2,390.5 kilometers (1,485 miles) and a lower fuel consumption of only 2.62 liters per 100 km compared with that of BYD’s similar technology.
• New energy vehicle (NEV) sales of state-owned Changan and Chery, which mainly refer to PHEVs and BEVs in China, also surpassed the 80,000 and 70,000 unit thresholds for the first time in October, respectively. The number for Avatr, a niche, luxury brand controlled by Changan, more than doubled to over 10,000 units, thanks to the strong sales of its 07 crossovers with both BEV and EREV options launched in late September.
• Both Huawei-backed EV brands, which fall under the umbrella of Huawei’s Harmony Intelligent Mobility Alliance, as well as Leapmotor, which counts Stellantis its largest shareholder, achieved solid growth last month with an expanding lineup of BEVs and EREVs. The October deliveries for Li Auto, a major player in the country’s EREV market, slightly declined by 4% month-on-month but still hit more than 50,000 units.
• Xiaomi sold more than 20,000 EVs per month for the first time in October, with only one model on offer, and last week began pre-sales of the SU7 Ultra, a luxury version of its first EV model the SU7. Both NIO and Xpeng Motors delivered more than 20,000 vehicles last month. NIO is reportedly planning to introduce its first hybrid model in 2026. The timeline for Xpeng to do the same is 2025, local media reported.

Context: China’s passenger NEV sales increased 50.9% year-on-year to more than 1.1 million units in September, buoyed by strong product launches and new government stimulus packages, the CPCA figures showed. Secretary General Cui Dngshu expects the sales momentum to stay strong in the fourth quarter of 2024.

READ MORE: Interview: CATL executives on hybrid vehicles, sodium-ion batteries, and more

Chinese automakers SAIC and Geely have “never” had private tariff negotiations with the European Commission over the prices of their China-made electric vehicles sold in the region, according to statements provided by the companies to Chinese media outlets on Thursday. Rather, they have “always” been working on the matter with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), a government-backed industry group authorized by multiple automakers to proceed with negotiations (quotes translated by TechNode).

The news comes after China’s Ministry of Commerce on Oct. 12 publicly criticized (in Chinese) the European Union for conducting separate price commitment negotiations with some companies, warning that this could “shake the foundations” of bilateral tariff negotiations. According to a document published by the European Commission on Tuesday, SAIC, Smart (an EV brand jointly owned by Mercedes-Benz and Geely), and Geely-owned Volvo submitted alternative price commitment proposals in case an overall plan offered by CCCME was not accepted in Europe.

State-owned SAIC, a long-time partner of Volkswagen and General Motors, also announced that it was filing a lawsuit at the European Union’s Court of Justice after the additional EU tariffs ranging from 7.8% for Tesla to 35.3% for SAIC took effect on Wednesday, Reuters has reported. China stated it does not agree with or accept the ruling, saying it will continue the ongoing negotiations with its European counterpart to establish a price floor on Chinese EVs. The consultations started in mid-September after China’s commerce minister Wang Wentao and EU trade commissioner Valdis Dombrovskis held talks in Brussels.

Although CATL has been quite successful with its energy-dense Qilin and fast-charging Shenxing batteries for passenger electric vehicles (EVs), the Chinese battery giant is already pursuing a third brand as it eyes strong growth in the flourishing hybrid electric vehicle (HEV) segment.

The world’s largest battery manufacturer has captured 45.9% of China’s EV battery market as of September this year, but its share in the plug-in hybrid electric vehicle (PHEV) segment is lower at about 40.2%, closely followed by BYD at 30.9%, official figures have shown (in Chinese). Nearly six out of every 10 new energy vehicles (NEVs) sold this year by BYD were PHEVs, powered by the EV giant’s proprietary blade batteries.

Despite double-digit growth for PHEVs this year, which in China include extended range hybrids, or EREV, many customers have complained about overly short EV-only ranges and slow charging, an Aito M5 owner surnamed Li told TechNode.

Li normally charges his crossover, which provides up to 255 kilometers (159 miles) on its electric-only range, from 30% to 95% in 40 minutes using a direct current (DC) fast charger. Another popular and cheaper sports utility vehicle (SUV), the BYD Tang DM-i, charges from 25% to 80% in 30-plus minutes. It has an EV-only range of 115 km.

CATL’s Freevoy hybrid battery was developed to alleviate pain points for a growing number of PHEV and EREV owners. The company said it offers hybrid vehicles a range of up to 400 km, takes only 10 minutes to add up to 280 km of range, and can charge and discharge at normal rates at temperatures as low as -20 degrees Celsius (-4 degrees Fahrenheit).

Such superior low-temperature performance is mainly attributed to the dual deployment of sodium-ion and lithium-ion materials in an integrated AB battery system, making it possible to leverage the advantages of each material. The sodium-ion batteries are used as a monitoring scale to assist in calibrating the system to measure the state of charge (SOC) of lithium-ion batteries, reducing lapses in calibration and boosting driving range.

The move reflects CATL’s view of the future of the broader EV market – PHEV and EREV, which combine an internal combustion engine with an electric motor system, will not after all be a temporary solution as previously estimated, but a major option over an extended period of time. More than 30 upcoming models will be equipped with the Freevoy battery, Gao Huan, chief technology officer of CATL’s electric vehicle business in China, told reporters on Oct. 24.

Here are some highlights from the interview, which have been condensed and edited for clarity:

Can you share details of how the Freevoy battery will be deployed when it comes to key metrics such as energy density and lifespan?

Different vehicle models have varying requirements for battery energy density and CATL is capable of supplying corresponding products to meet the needs of our customers. For instance, it is necessary for A-class PHEVs and EREVs to integrate batteries at a cell-level energy density of 450-500 watt-hours per liter (Wh/L) for a one-charge range of 400 km. That number for MPVs (multi-purpose vehicles) will likely go up to around 650 Wh/L.

The energy consumption levels of different models also vary, leading to differences in battery capacities. For example, the energy consumption of B-class and C-class MPVs is often around 16-17 kilowatt-hour (kWh) per 100 km; thus, a 70 kWh or even higher battery pack is required to ensure a driving range of 400 km. It is important to note that the Freevoy battery showcases CATL’s advantages in energy density, charging speed, and cycle life. In addition, the life cycle of the products providing a range of 400 km is above 2500 cycles, as long service life is a standard feature of CATL batteries.

Although a growing number of automakers are making their new models with more modern 800-volt architecture, the normal voltage for most EVs on the market is around 400 volts or even lower. Would the Freevoy battery’s charging capability be limited by the charging architecture of vehicles?

The 4C charging capability of the Freevoy battery is definitely related to the vehicle’s power system architecture. For EVs with 400-volt systems to handle a 4C charge rate, the charging current needs to be double that of those with 800-volt systems, and the additional thermal energy generated throughout the process will be more than that. As a result, 400-volt EVs need more advanced thermal management capabilities.

This doesn’t mean that an EV equipped with a 400-volt charging architecture can’t handle a 4C charge rate. The idea is still feasible when the car is designed to have a shorter EV-only range, like 300 km or even 200 km. However, if a car is set to have both a high energy capacity and a long range, the trend now is toward 800-volt architecture.

What prompted CATL to develop sodium-ion batteries against the backdrop that battery-grade lithium carbonate prices have been going down?

Our decision to continue developing sodium-ion batteries is certainly based on their advantages. Sodium-ion batteries have a relatively lower energy density than lithium-ion ones, and it is difficult for a PHEV or EREV to have an electric-only range of 400 km with a sodium-ion battery pack at a favorable size and weight. 

(Editors note: The Chinese spot lithium carbonate prices had been hovering around RMB 100,000 ($14,020) per ton until recently, after reaching their November 2022 peak. The prices fell to RMB 73,000 per ton on Oct. 28, compared with their year-high of RMB 116,000 in March, according to figures from the metal research institute Shanghai Metals Market.)

However, with CATL’s AB battery pack solution, which combimes sodium-ion battereis and lithium-ion batteries into one battery pack, both types of battereis can leverage their respective advantages to deliver superior performance under low-temperature conditions and maintain a high cycle life. Therefore, we will continue to invest in the research and development of sodium-ion batteries and other electrochemical battery systems.

Sodium-ion batteries perform well at low temperatures. However, will frequent charging and discharging in low-temperature conditions affect the lifespan of EV batteries?

We know that the internal resistance of batteries increases at low temperatures, which requires a reliable Battery Management System (BMS) and strong thermal management capabilities to ensure its great performance under low temperatures. CATL has developed technologies to achieve that. Battery charging technology in low-temperature environments is more critical because the battery’s SOC could be calibrated inaccurately in frigid conditions, which could result in issues with battery performance. Such issues could accelerate the degradation of the battery’s lifespan. 

What is CATL’s view on the outlook on the Chinese new energy vehicle (NEV) market, and more specifically the PHEV and EREV segments?

Regardless of vehicle type, A-class cars priced between 100,000 and 200,000 yuan are the preferences of consumers. Based on data analysis and forecasts, entry-level A-class cars, with a price tag of roughly RMB 100,000, will soon be capable of traveling 200 km on a single charge. Meanwhile, a driving range of 300 km will likely become a mainstream feature for mid-range A-class cars. A top-end A-class car could achieve a range of 400 km, while Chinese consumers increasingly expect an EV-only range of 400 km or even higher from B-, C-, and D- class models priced above RMB 200,000 to meet their travel needs.

READ MORE: BEYOND EXPO 2024 | CATL CEO’s vision takes shape with AI, energy storage, and more

China’s Zeekr on Wednesday launched a futuristic vehicle with the kind of design that is normally seen more from self-driving car companies. The vehicle features what it claims is the widest entrance area of any car on the market and a versatile, living room-style cabin space, specifically designed to meet the needs of three-generation, middle-income Chinese households.

Why it matters: The Zeekr Mix, a roundish, cute-looking vehicle, is the first production model that uses Geely’s newly-developed SEA-M platform, which stands for “sustainable experience architecture,” a base it shares with the newest robotaxi prototype operated by Waymo, Alphabet’s self-driving car unit.

• Zeekr is on track to begin volume delivery of a sister model to the Mix, dubbed the M-Vision concept, to Waymo next year. This could facilitate the US firm to create the world’s first autonomous vehicle brand that goes into high volume, chief executive Andy An told reporters on Wednesday.
• Waymo began testing a small number of Zeekr-made prototype vehicles – outfitted with its sixth-generation, more cost-effective self-driving technology – in the US earlier this year as part of an alliance with the Geely-affiliated electric vehicle maker that was revealed in December 2021, TechCrunch has reported.

Details: The Zeekr Mix, advertised as having an interior “like a living room,” is the first fruit of the company’s transformation initiative which has seen it focus on the future of smart mobility. The vehicle comes with a number of industry-first elements at a price range between RMB 279,900 and RMB 299,900 ($39,339-$42,150).

• A radical alteration to the traditional way of designing a car’s structure, it features a double sliding door construction with four ultra-high-strength steel B-pillars, a nearly two-meter-long slide rail for all chairs, including two front swivel seats, and a capsule-shaped exterior design.
• This, along with a movable central console, would allow children to play or families to dine together in a 1.5 square meter (16.2 square feet) interior flat space, according to the company. The five-seater van also offers a 1.5-meter width opening area and a vehicle floor height of 390 millimeters (15.4 inches) for passengers.
• The unusual design of the nearly 4.7-meter-long vehicle required an extensive engineering process, including the use of shorter front overhangs and a more compact electric motor, as well as new development for springs and dampers, and the repositioning of the air conditioning system, Zeekr said.
• Despite concerns from customers wondering whether the car is safe enough to use, the company said the car’s hidden B-pillars are made of 2,000 megapascal (MPa) ultra-strong, high-formability steel. It also uses parts for crash energy absorption in the electric power system, as well as a rear body in a single piece – all features it says enhance safety.
• The Mix, with a 3,008-millimeter-long wheelbase, is highly maneuverable with a turning radius within five meters. It has two variants with a driving range of 550 kilometers and 702 km (342 and 436 miles), powered by Zeekr’s affordable iron-based batteries and more energy-intensive ones sourced from CATL, respectively.

Context: Waymo, formerly known as the Google Self-Driving Car Project, operates a fleet of roughly 670 driverless vehicles in San Francisco, Los Angeles, and Phoenix. It has reached long-term partnerships with several automakers. In 2018, it signed a deal to buy 20,000 crossovers from Jaguar.

• Year-to-date deliveries for New York-listed Zeekr, with five other models on sale, are up 81% to 142,873 units as of September compared to 2023. A video posted by the firm’s vice president, which shows a group of people enjoying a Chinese hotpot meal inside the Zeekr Mix, went viral on social media recently, the SCMP reported.

READ MORE:Global carmakers take on Chinese giants in EV showdown at Beijing Auto Show 2024

Tesla, Mobileye, Alibaba, and Didi have denied speculation that they have been involved in conducting illegal map-making activities after China’s top security agency said it found an incident of spying in which a foreign enterprise used a local company to collect sensitive map data.

The unidentified international firm illegally conducted geographic mapping activities in the name of implementing autonomous driving research projects, China’s state security ministry said on Wednesday in a post on the popular social media platform WeChat. It was assisted through outsourcing the activities to a Chinese company that has a government license for geographic surveying and mapping, according to the post. It added that the Chinese government had pursued legal action against the entities over the incident.

Tesla responded to the post by Beijing with Grace Tao, vice president in charge of external relations in China, reposting the article on the Chinese microblogging platform Weibo, with the comment: ”Compliance is the bottom line for business operations” (our translation).

Mobileye, which has partnered with Chinese automakers including Geely-owned Zeekr and state-owned FAW Group, followed suit immediately. “We have continuously invested in data compliance and regulatory adherence, including in China, where we operate under the supervision of licensed entities in full accordance with legal requirements,” Intel’s self-driving car unit said in a statement published Thursday on Weibo.

On the same day, China’s Alibaba Cloud and Didi also said they had nothing to do with the incident. Alibaba’s cloud arm terminated its mapping permit three days ahead of the release of the case, according to a statement by the Department of Natural Resources of Zhejiang Province, while Didi has been testing autonomous vehicles in a number of major Chinese cities. The two companies were also among the targets of Beijing’s regulatory crackdown against the country’s tech sector during 2020 and 2022.

China has for years required automakers and self-driving car developers to secure licenses or use authorized companies for mapping data used in vehicles. Some electric vehicle makers and tech companies, such as Xpeng Motors and Huawei, have pivoted to make assisted driving technologies without the assistance of high-definition maps for cost-saving reasons and because of regulatory issues.

Guangzhou Automobile Group (GAC), a long-time manufacturing partner of Toyota and Honda in China, has hired a veteran marketing executive from BMW as the chief operating officer of its overseas business unit, as it seeks to accelerate growth in Europe and beyond.

Why it matters: Making the announcement at this year’s Paris Motor Show on Monday, GAC joins an array of Chinese automakers tapping Europe amid ever-intensifying competition at home and following the imposition of nearly 40% tariffs on Chinese EVs by the European Commission.

READ MORE:  EU anti-subsidy EV probe: What Chinese automakers have done in Europe and what’s next

Details: Thomas Schemera, a longtime executive at BMW and Hyundai, will join GAC International, the overseas business subsidiary of the state-owned automaker, as the global chief operating officer and senior vice president. GAC aims to establish positive consumer resonance in the European market with this move and inject new impetus into the company’s global development, according to a Chinese statement.

• German-born Schemera held various roles at BMW over three decades. He started his career at the German carmaker in the late 1980s as an engineer of computer-aided manufacturing and briefly led the development of sales and dealerships for the manufacturer in China between 2005 and 2008, according to his LinkedIn profile.
• After his departure from BMW, he served as global chief marketing officer and executive vice president at Hyundai from 2021 to 2023, a role that included bolstering communication of Hyundai’s N brand and its dedicated battery electric vehicle lineup IONIQ, according to a Hyundai announcement.
• GAC will begin sales of a sports utility vehicle, Aion V, in several European markets in mid-2025. It has a driving range of 520 kilometers (323 miles) per charge and will be priced at no more than €40,000 ($43,748). To compare, a Tesla Model Y starts at €42,900 with a driving range of 244 miles in Germany.
• Meanwhile, the Chinese automaker is looking at the possibility of making EVs locally to avoid EU tariffs, an executive told Reuters. Still, speaking to Chinese media outlet Caixin on Tuesday, Feng Xingya, the general manager of GAC, explained that the company’s pursuit of local production would be premised on strong demand.
• GAC’s developments show its serious intention to dig deep roots in Europe, expanding its dealership and service networks with a timeline to sell cars and provide maintenance repair all over the continent in 2028. A transit warehouse for Europe will come into service next year to ensure a more timely supply of car components.

Context: GAC is among several Chinese automakers to steal the show in Paris with debuts of their price-competitive and technology-advanced EVs, and announcements displaying a continued ambition to crack the market despite rising protectionism.

• Stellantis-backed Leapmotor showcased its B10 compact SUV, a global model designed for tech-savvy consumers with assisted driving and infotainment functions powered by Qualcomm’s latest processors. It began taking reservations for a budget EV and a large SUV at sticker prices of €18,900 and €36,400 last month.
• At a press conference during the show, Xpeng Motors announced the pre-sale price for its P7+ sports sedan starts at RMB 209,800 ($29,493) in China. Meanwhile, BYD and Huawei-backed Seres showcased their newest models – the Yangwang U8, and the Aito M7, –  respectively.
• Chinese EV imports will face additional duties in the 17-35.3% range on top of an existing 10% levy likely starting from November. Beijing is still pushing for negotiations on alternative solutions, while Brussels is poised to publish tariff implementation  regulations by Oct. 30.

READ MORE: Chinese carmakers to become dominant globally despite tariffs – AlixPartners

China’s GAC Group said on Oct. 10 it planned to invest $27 million in self-driving car startup Pony.ai through its wholly-owned subsidiary GAC Capital, a move expected to “create synergies” between the two companies and speed up the development of GAC’s automated driving functions. The investment marks the latest bet by a Chinese automaker to boost their autonomous driving capacity in the hope of catching up with Tesla, which on the same day said it aims to produce its driverless taxi, the Cybercab, in 2026.

GAC and Pony.ai first forged a partnership in 2018, TechNode reported, followed by Pony’s undisclosed investment in GAC’ ride-hailing platform OnTime in April 2022, when the two companies said they would together operate an autonomous ride-hailing fleet. Meanwhile, Pony.ai has been backed by a Toyota investment worth $400 million since 2020, and the two companies, along with GAC, a manufacturing partner of Toyota in China, announced a RMB 1 billion ($139 million) joint venture to make robocars last August.

State-owned GAC has also been a strategic investor in WeRide since late 2021, a self-driving car company with regional headquarters in the southern Chinese city of Guangzhou. Both WeRide and Pony.ai are looking to sell shares in the US and have obtained approval for overseas listings from Chinese regulators. Pony.ai said on Monday its autonomous ride-hailing vehicles have traveled a total of 40 million kilometers (25 million miles), of which around 4 million km were entirely driverless.

More Chinese automakers are following Tesla’s lead with their robocars. Xpeng Motors’ new model for autonomous ride-hailing services is expected to enter production in 2026, chief executive He Xiaopeng posted on Chinese microblogging platform Weibo on Oct. 10. On the same day, Tesla CEO Elon Musk said the company’s long-awaited robotaxi, with two gull-wing doors and no steering wheel or pedals, will eventually cost less than $30,000, Reuters reported.

READ MORE: The Chinese startup battling for robotaxi supremacy

Xpeng Motors is shifting towards a  camera-based sensor system and away from expensive lidar, on Thursday providing a handful of new details on its assisted driving technology. A new electric sedan also made its debut at an event, bringing the company into direct competition with popular models including the Tesla Model 3, BYD’s Han, and the Xiaomi SU7.

Why it matters: The P7+, a completely new model following in the footsteps of its first sedan P7 launched four years ago, is expected to go on sale at a competitive price point and replicate the initial success of its cheaper-than-expected and technologically advanced MONA M03.

• Xpeng reduced the cost of making its vehicles by 25% with this B-class model “through technological advancements,” expecting it to become a top-seller in the second half of this year, chief executive He Xiaopeng told investors during an earnings call in May.

New image sensors: CEO He called Xpeng’s new lidar-less, vision-based approach, “the Eagle Eye,” saying it will be the first in the industry to harness the capabilities of the so-called lateral overflow integration capacitors (LOFIC), which allow its vehicle’s cameras to capture scenes with a large brightness discrepancy.

• Image sensors usually have a limited dynamic range of brightness that can be photographed, creating overexposed or underexposed images in difficult lighting conditions such as nightscapes and backlight. However, those with a LOFIC structure have a wider dynamic range, meaning objects could be captured with a more balanced exposure.
• This makes it possible to avoid blowing out the front vehicle when the cameras on an Xpeng’s car try to recognize it at points of extreme illumination such as at the exit of a tunnel, according to a slide presentation seen on Thursday by TechNode. Xpeng said the P7+ will integrate 26 sensors, mainly cameras, as well as dual NVIDIA’s DRIVE Orin chips, but no lidar units.
• The technology is being adopted in more premium and newer consumer electronics devices due to the sophistication of the circuit’s structure, with Sony and Samsung among the major suppliers, while Chinese firms are making their replacements. Smartphone maker Honor in March announced its Magic 6 Ultimate would feature a main camera using image sensors with a LOFIC structure from Omnivision.

A sporty sedan: The P7+ is a sporty hatchback-style sedan with a gently sloping rear roofline, and a spacious interior with an impressive headroom of 973 millimeters for passengers in the rear row. With a wheelbase of three meters, it has a boot capacity of 725 liters which can rise to 2,221 liters with the rear seats down.

• All the variants come with an electric motor mounted on the rear wheel with 180 kW or 230 kW of peak output. It is powered by an affordable iron-based battery pack featuring 60.7 or 76.3 kilowatt-hour (kWh) capacity, achieving a driving range of 602 kilometers and 710 km, respectively.
• The fives-seater boasts premium comfort for both driver and passengers, as all the seats can be heated and ventilated with massage options as standard. It also provides a folding table and an eight-inch infotainment screen for rear passengers.
• The P7+ competes with rivals’ models such as the Tesla Model 3, Xiaomi’s SU7, and the BYD Han, which are priced from RMB 231,900 ($32,764), RMB 215,900 and RMB 165,800, respectively. Xpeng will reveal the pre-sale price of the car at the Paris Motor Show next Monday. A redesigned P7 went on sale last March at a price range between RMB 249,900 and RMB 339,900.

Context: Xpeng is among the Chinese EV makers pivoting to self-driving technology that uses low-cost cameras, following the lead of Tesla, over the past two years. Its advanced driver assistance system (ADAS) will be able to work on all Chinese roadways in the fourth quarter of this year, providing users with “door-to-door” automated driving across the country, the company said in July.

New orders for electric vehicles from multiple Chinese companies, including Huawei, Xiaomi, and Leapmotor, increased more than expected during the recent seven-day National Day holiday in China, as strong sales momentum continued in October and the festival season boosted positive sentiments further in the market.

Why it matters: The figures come shortly after a number of major Chinese EV makers, led by BYD, set new records for deliveries in September with strong product launches and new government stimulus measures boosting consumer confidence, likely pointing to further sales growth ahead.

Details: Huawei on Monday announced (in Chinese) that the EV brands under its Harmony Intelligent Mobility Alliance (HIIMA) collectively received more than 28,600 orders with non-refundable deposits for models such as Aito’s M9 and M7 crossovers during China’s week-long National Day holiday which started on Oct. 1.

• Notably, the Luxeed R7, positioned as a direct competitor to the Tesla Model Y, reached over 9,600 pre-orders over the period. The car went on sale on Sept. 24 at a similar starting price of RMB 259,800 ($37,022) but with a longer driving range and featuring Huawei’s assisted driving tech.
• Xiaomi is seeing a similar trend, as chief executive Lei Jun confirmed rumors (in Chinese) on Monday that more than 6,000 customers converted their reservations for the SU7 sedan to a binding order over the week. The smartphone giant, with only one EV model on sale, said it aims to deliver 20,000 vehicles this month.
• Stellantis-backed Leapmotor received over 17,000 reservations with RMB 5,000 deposits for its affordable EVs over the past seven days, CEO Zhu Jiangming said in a public post on Chinese messaging app WeChat. The numbers come after the company posted its best-ever month by selling 33,767 units in September.
• Meanwhile, Li Auto and Zeekr vehicles racked up more than 20,000 and 10,000 pre-orders respectively, according to figures published by Sun Shaojun, founder of consumer behavior research agency CarFans, on Chinese microblogging platform Weibo. Both companies set sales records last month, selling more than 53,000 and 21,000 units.

Context: This time of year, known as “Golden September, Silver October,” is traditionally the high season for car consumption in China. Passenger car sales are expected to have grown 4% year-on-year and 10.1% month-on-month during September, said the China Passenger Car Association.

• The strong demand comes after an enhanced stimulus package from Beijing that started in late July and offers subsidies of up to RMB 20,000 to consumers who scrap gas-powered vehicles for new and energy-efficient ones. More than 1.2 million customers have sent their applications for the subsidy as of Oct. 4, reported Xinhua News Agency (in Chinese).
• Meanwhile, Chinese players have beefed up their product launches seeking to steal market share from more established international rivals such as Volkswagen and Tesla. At least five automakers – NIO, Geely-affiliated Zeekr, Huawei-backed Luxeed, SAIC, and Changan – introduced new models to compete with the Tesla Model Y over the past month.

NIO has signed an agreement for a combined RMB 3.3 billion ($471 million) investment in its China unit with three existing state-owned investors, the latest show of strong ties between the electric vehicle maker and the Chinese authorities, and local authority support for the industry.

The three investors, namely Hefei Jianheng New Energy Automobile Investment Fund Partnership, Anhui Provincial Emerging Industry Investment Co., Ltd., and CS Capital Co., Ltd. will collectively invest over RMB 3 billion into NIO Holding Co., Ltd. Meanwhile, the US-listed EV maker, with a production base in the eastern Chinese city of Hefei, is set to pump RMB 10 billion in fresh capital into the business through the purchase of new shares in its Chinese entity, according to an announcement.

“As China approaches its 75th anniversary, NIO China has once again received support from shareholders for increased capital. Four years ago, Anhui and Hefei rescued NIO from the intensive care unit,” William Li, NIO’s founder, chairman, and chief executive, said on Sunday in a public post on WeChat, China’s ubiquitous messaging app (our translation). “NIO has transformed from a small seedling into a little tree capable of withstanding some storms. As this little tree grows into a big tree, and eventually into a forest, Hefei and Anhui continue to nurture and cultivate it.”

Hefei Jianheng is a subsidiary of state-owned Hefei City Construction and Investment Holding (Group) Co., Ltd., while Anhui Provincial Emerging Industry Investment is fully owned by the regional bureau of the State-owned Assets Supervision and Administration Commission of the State Council. CS Capital is largely controlled by the State Development and Investment Corporation (SDIC), public records show. The new investment demonstrates the strategic investors’ strong recognition of NIO’s industry leadership, as well as firm support for the high-quality development of the EV industry, the company said in the announcement.

Upon completion of the deal, expected by the end of this year, NIO’s stake in its Chinese entity will be diluted to 88.3% from 92.1% as of last year, with the three investors and others holding the other 11.7%. The deal comes four years after the Chinese EV maker raised RMB 7 billion from the three investors, among others, offering the cash-strapped company a crucial lifeline, TechNode reported.

NIO delivered 128,100 vehicles from January to August, a 35.8% growth from a year earlier, and launched the first model under the mainstream sub-brand Onvo on Sept.19.

Chinese automakers are escalating their battle with Tesla for a bigger share in the country’s electric vehicle market. As SAIC and Changan said on Thursday, they have benchmarked their new sports utility vehicles against the US automaker’s Model Y crossover.

Changan’s premium EV brand Avatr launched (in Chinese) its first model with both full battery electric and extended-range hybrid (EREV) options in a move to expand its lineup and improve sales against the backdrop of slowing demand for pure EVs. The EREV version of the Avatr 07 has a starting price of RMB 219,900 ($31,358) and a 38 kilowatt-hour (kWh) battery pack that can charge from 10% to 80% in 15 minutes. Meanwhile, the entry-level, all-electric variant costs RMB 10,000 higher and travels 650 kilometers (404 miles) on a full charge.

Avatr, jointly developed by state-owned Changan, battery maker CATL, and Huawei, offers Huawei’s Advanced Driving System (ADS) and the HarmonyOS, the tech giant’s alternative to Google’s Android operating system, as standard features on the mid-size SUV, as it has done with previous models. The EV maker, a major investor in Huawei’s automotive business unit, delivered only about 36,400 vehicles in the first eight months of this year with two models on offer, the large SUV Avatr 11 and the 12 sedan.

Also on Thursday, IM Motors introduced a redesigned LS6 all-electric crossover, which the SAIC-controlled luxury EV maker said was the first model in its class to feature a four-wheel, steer-by-wire system that produces more exact steering ratios than a traditional mechanical steering system. This technology, something Tesla has been keen on, offers enhanced comfort and driving dynamics. All the LS6 variants feature an advanced driver assistance system (ADAS) that enables functions such as lane switching on city streets without relying on high-definition maps, similar to Tesla’s Full Self-Driving software (FSD).

The cheapest LS6 now costs RMB 216,900, representing a 6% cut from its predecessor, while the driving range has been boosted by 12% to 625 km. The top-end, dual-motor five-seater travels 750 km on a single charge and can sprint from 0 to 100 km/m (62 mph) in 3.5 seconds, with a sticker price of RMB 279,900. IM Motors, a partner to Volkswagen’s Audi brand, has four models on sale and delivered 34,719 vehicles from January to August.

READ MORE: Huawei’s answer to the Tesla Model Y is coming

Huawei is coming after the Tesla Model Y with its second EV model under the Luxeed brand in a partnership with Chinese automaker Chery, featuring its advanced driver assistance system (ADAS), a longer driving range, and a roomier interior, all at a similar price. 

The entry-level Luxeed R7 travels 667 kilometers (415 miles) on a single charge, powered by an 82 kilowatt-hour (kWh) battery pack from Chinese supplier CALB at a price tag of RMB 259,800 ($37,022), which is RMB 9,900 more than Tesla’s Model Y. It drives autonomously on Chinese expressways using the basic version of Huawei’s Advanced Driving System (ADS) without a lidar unit for remote sensing.

The higher-end versions of the compact crossover have a maximum driving range of 802 km and can navigate Chinese urban roads, for a cost of between RMB 299,800 and RMB 339,800. Customers pay RMB 10,000 on top to access the more premium Huawei ADS 3.0 software. By comparison, Tesla sells the top-end Model Y at a sticker price of RMB 348,000 and is looking to roll out its so-called “Full Self-Driving” software in the country in the first quarter of 2025, TechNode reported.

The five-seater vehicle is said to have more head and leg room than the Model Y and a boot capacity of 837 liters which rises to 2,130 liters with the rear seats folded. Still, it faces strong competition not only from the US automaker but also from local rivals, including NIO’s sub-brand Onvo and Geely-controlled Zeekr which launched similar offerings for less money last week. 

Huawei and Chery delivered only 18,091 units of the Luxeed S7 sedan from January to August, compared with more than 254,045 Aito-branded EVs sold by Huawei and partner Seres. Tesla shipped 354,693 Model Y vehicles from its Shanghai Gigafactory over the same period, according to figures released by the China Passenger Car Association, and sales of the world’s top-selling EV model totaled 1.22 million units last year, said market research firm JATO Dynamics.

READ MORE: Huawei, Chery introduce second joint model following setback

China’s Zeekr on Sept. 20 unveiled the 7X, its first family sports utility vehicle with off-road capabilities and enhanced safety features, with a cheaper price tag than Tesla’s Model Y letting it compete against the world’s top-selling model in its home market.

Zeekr said more than 58,000 customers gave refundable deposits to reserve a place in the production line queue following the car’s debut on Aug. 30. The New York-listed electric vehicle maker is ready to deliver at least 3,000 units in the remaining days of September by ramping up manufacturing rates as demand grows, vice president Jason Lin said in an interview with TechNode.

Why it matters: Geely’s stand-alone EV brand has a tough task ahead to ensure the Zeekr 7X is successful in the highly competitive mainstream market. At least four new models from Chinese car brands, including Zeekr, NIO’s Onvo, and Dongfeng’s Voyah, are testing themselves against the benchmark in the class – the Tesla Model Y.

Details: The Zeekr 7X comes in three variants with a number of creature comforts on offer, including heated front seats with massage functions and large, automatic sun blinds on the rear-side windows and car roof.

• All the variants also boast high-tech specs such as NVIDIA chips and a lidar unit for automated driving, a 36.21-inch augmented reality head-up display for navigation, and an 800-volt electrical system that can charge the battery from 10% to 80% in 10.5 minutes.
• The entry-level 7X travels 605 kilometers (376 miles) on a single charge and goes from 0 to 100 km/h (62 mph) in 5.8 seconds at a sticker price of RMB 229,900 ($32,632). The dual-motor version costs RMB 269,900, has a 705 km-plus driving range, and is able to reach 100 km/h in as little as 3.8 seconds.
• Zeekr said the five-seater is great fun to drive off-road, as the standard version has 197 millimeters (7.8 inches) of ground clearance, while its air suspension can raise it another 33 mm for maximum clearance. In the case of an emergency submerging, a car driver can break one of the car’s windows with the press of a hidden button.
• With its raised ground clearance and a high roofline, the compact SUV goes for a traditional SUV shape, which the automaker said gives passengers ample interior headroom. It features an LED strip that can display customized lighting sequences with animation on the front hood, like its sibling, the 007 sedan.

Context: Designed to provide sufficient space and a gutsy performance catering to family occupants, the 7X will expand Zeekr’s portfolio into the Chinese mainstream SUV segment with a price range between RMB 200,000 and 300,000. The EV penetration rate surpassed 46% in this price segment last year, according to figures compiled by Chinese brokerage Guolian Securities.

• Zeekr delivered 121,540 vehicles across four models from January to August, including the 001 shooting brake and the 009 van, representing an 81% growth annually. It aims to deliver 230,000 EVs this year. Tesla shipped 354,693 Model Y vehicles from its Shanghai Gigafactory over the same period, including an undisclosed number for export, according to figures released by the China Passenger Car Association.

NIO on Thursday announced its foray into the Chinese ultra-competitive mainstream vehicle segment with the launch of the first model under its family-oriented lineup Onvo, featuring class-leading utility at nearly half the price of Tesla’s Model Y by leveraging its unique battery leasing program.

The cheapest Onvo L60 crossover costs only RMB 149,500 ($21,154) under the NIO’s Battery-as-a-Service (BaaS) leasing program, which allows customers to buy the EV without ownership of the battery pack, versus RMB 206,900 including the pack. Priced at RMB 100,400 cheaper than a China-made Tesla Model Y, the car aims to be a meaningful competitor not only to the world’s top-selling model, but also to popular gas-powered vehicles such as Volkswagen’s Tiguan L and the Toyota RAV4.

The management is witnessing “a surge” in order intake following the launch, as dozens of millions of Chinese netizens watched the livestream, William Li, founder, chairman, and chief executive, told reporters in the eastern Chinese city of Hefei on Friday (our translation). More than 60% of the customers choosing the Onvo L60 consider battery-swapping technology, part of NIO’s broader BaaS strategy, as the most desirable attribute, according to Li.

BaaS becomes the key

Boasting significant ownership cost savings and fast battery swapping, the Onvo L60 is the first serious contender from NIO to challenge the Tesla Model Y, and could be different from the previous Chinese SUVs trying to win over families from the global EV crown.

Stuffed with an autonomous driving stack of 30 sensors, Qualcomm’s latest processor for infotainment applications, and attractive extras such as a huge, 52-liter car refrigerator, the affordable, functional compact sports utility vehicle offers more than RMB 100,000 worth of specifications than the Model Y. That’s according to Ai Tiecheng, president of the Onvo brand, speaking at the launch event on Thursday.

Moreover, the management expects NIO’s battery swap service, with each time taking around three minutes from an ever-expanding power infrastructure network, to mitigate the range anxiety from Chinese consumers and even remove the real obstacle of insufficient chargers away from EV driving. Onvo owners can replace their empty battery packs for a charged one in over 1,000 NIO battery swap stations nationwide by December, and more than 2,500 such facilities will be available by the end of next year, said Ai.

The standard range version of the L60 went on sale on Thursday with the impressive starting price plus a leasing fee of RMB 599 per month for the use of a 60 kilowatt-hour (kWh) battery pack that offers a 555 kilometer (345 miles) driving range. The long-range version costs the same amount with a monthly rental fee of RMB 899, claiming a driving range of 730 km with an 85 kWh battery pack, versus RMB 235,900 including the pack. A typical Onvo owner would pay an additional RMB 100-200 each month in electricity costs, according to Ai’s estimates.

“Overall it costs you roughly a tank of gas per month,” Ai added (our translation). NIO said the total energy consumption of the car is 12.1 kWh per 100 km, compared with the 12.5 kWh achieved by the Model Y.

A turning point

The success of the L60 is of vital importance to whether or not 10-year-old, loss-making NIO would become a stronger and profitable player in a bruising battle where even some of the bigger rivals are already feeling the heat. Global auto giants from Detroit’s big three to Japan’s leaders have been hurt in China, and NIO is joining an expanding group of local players in bringing their better-equipped EVs at relatively affordable prices into the market.

Against the backdrop of a slowing economy, Onvo’s first model was precisely developed to meet the real demands of Chinese families who take space, safety, comfort, and affordability in the first place, rather than performance features like extra torque or horsepower, according to NIO.

NIO said the five-seater crossover could comfortably accommodate passengers in a carefully designed cabin, providing larger headroom and legroom across both rows than the Tesla Model Y. Owners could also access popular high-tech features such as an AI voice assistant from an in-house developed operating system, as well as perform autonomous driving functions in more than 700 Chinese cities and 2,700 counties, powered by advanced chips and AI algorithms.

Li said the company is now ready for a production ramp-up with parts suppliers, with a timeline of October to make 5,000 units of the car and increase the monthly output to 16,000 in January. Another 20,000-unit milestone could follow next March, Li added, again promising a “decent” gross margin for the model. NIO’s CEO earlier this month had briefed investors about the outlook of delivering 20,000 Onvo EVs sometime next year and setting a 15% margin goal for the Onvo brand in the long term. 

Having not had a distinct hit product in recent years, NIO and peer Xpeng Motors are showing signs of making a turnaround with their multi-brand strategies.

READ MORE: NIO CEO details thinking on first Onvo EV, battery swap alliance

BYD in a recent regulatory filing is seen to be planning a 35.6 million square feet global research and development center in the southern Chinese city of Shenzhen, where the auto giant is headquartered, as part of the company’s latest push to drive tech innovation.

The facility is to be located about eight kilometers (five miles) north of its headquarters in the city’s Pingshan district, covering an area of 3.3 million square meters (35.6 million square feet). It will comprise nine buildings and include parking space for 20,000 cars and 8,054 non-motorized vehicles, according to a filing published by the Shenzhen Municipal Planning and Natural Resources Bureau on Sept. 4.

The disclosure was revealed a year after China’s top electric vehicle maker announced the construction of its global R&D center, which will cost RMB 20 billion ($2.8 billion) and house 60,000 engineers, the city government said in a statement last June. The center will also include more than 50 research labs for emerging technologies such as nanoscale photonic physics and the development of high polymer materials.

BYD has been ramping up its R&D efforts to beef up its technology offerings over recent years and has pledged to invest RMB 100 billion in vehicle automation technologies over the long term. It expanded its software engineering team by more than 4,000 employees last May, according to senior vice president Stella Li, and over 80% of the 31,800 fresh graduates recruited last year have worked on R&D projects, TechNode reported.

The company announced on Friday that it now has the largest R&D team in the industry, as nearly 110,000 out of its approximately 900,000 employees are scientists and engineers, Li Yunfei, a general manager for branding and public relations, said on microblogging platform Weibo. Year-to-date sales of its passenger EVs, including all-electrics and plug-in hybrids, grew 29.4% year-on-year to 2.3 million units as of August.

READ MORE: BYD begins building a $2.9 billion industrial facility in Shenzhen

Huawei and Chinese automaker Chery on Tuesday began taking orders for the second model under their premium electric vehicle brand Luxeed, priced between RMB 268,000 and RMB 348,000 ($37,654 and $48,894) and featuring what an executive called the world’s most advanced driver assistance system. 

The Luxeed R7 five-seater sports utility vehicle has a sloping, coupe-style roofline, making it the most aerodynamic production car in the SUV segment, and boasts a roomier interior space than that of the Tesla Model S, according to the companies.

“We have conducted comprehensive evaluations from multiple aspects and found that Huawei ADS is the most powerful and safest intelligent driving system, bar none,” Richard Yu, chairman of the board of directors of Huawei’s Intelligent Automotive Solution business unit, said at a press event (our translation). Yu previously said Huawei’s employees narrowly avoided several incidents where a Tesla almost crashed into stationary objects such as trucks during a recent test drive in the US and Canada, TechNode reported.

The smartphone maker said drivers of ADS-enabled EVs traveled over 200 million km (124 million miles) in August, while its autonomous emerging braking feature has prevented more than 560,000 collisions for users as of Monday. By comparison, Tesla FSD users surpassed 1.3 billion cumulative miles in three years as of March this year.

The entry-level R7 has a driving range of 667 kilometers (415 miles) on a single charge and is capable of handling on-ramp to off-ramp driving and lane changing autonomously on national highways without the assistance of expensive lidar units. The higher-end versions of the R7 crossover travel 802 km at most per charge and feature the third version of Huawei’s Advanced Driving System (ADS), which the tech giant claimed allows cars to carry out most driving functions automatically from garage to garage nationwide.

The two companies expect the second model to help expand their product portfolio and drive sales for the new brand, following the lackluster sales performance of the S7 sedan, which reported deliveries of only 15,608 units from January to July. An earlier price cut did little to lift sales after customers complained about delivery delays and rivals such as Xiaomi and Zeekr rolled out their competitive offerings.

Meanwhile, Huawei, with another of its manufacturing partners Seres, has also introduced (in Chinese) a five-seat variant of their M9 full-size SUV priced between RMB 469,800 and RMB 569,800. Huawei said the three-row, six-passenger SUV has secured more than 130,000 reservations with non-refundable deposits since its launch in December and has been the top-selling model in the price segment of more than RMB 500,000 in China in the past five months.

Note: The article was first published on Automobility Ltd written by Bill Russo, Benjamin Fan, and Lorenzo Song.

Opening Comments from Bill Russo:

In early 2009, shortly after resigning from my position as head of Chrysler’s business in North East Asia, I founded an Asia-based consultancy called Synergistics Limited. It was my way of staying close to the market where I had invested 5 years of my career, and which that same year had become the world’s largest automotive market measured by both sales and production. At that time, it had become quite apparent that China had emerged as the front line in the battle for dominance of the 21st century automotive industry.

To gather my thoughts on where things were likely headed, I wrote an article in 2009 titled The Path to Globalization of China’s Automotive Industry where I predicted the emergence of Chinese brands as global players, and described a plausible path for this to occur. China surpassed Japan in 2023 to become the world’s largest exporter of vehicles, and surpassing this milestone represents an appropriate time to revisit this topic.

Where We Stand in 2024

• China has emerged as a transformative force in the global auto industry, having been the world’s largest market for production and sales of automobiles since 2009
• New Energy Vehicles now represent more than one-third of all vehicles sold in China, and Chinese companies have 80% of this segment.
• Over 60% of new energy vehicles and 70% of EV batteries are made in China
• Chinese brands now have 63% share of domestic passenger vehicle sales, up 27% since 2020.
• A recent slowdown in domestic sales has forced automakers in China to prioritize exports in order to improve the utilization of their installed capacities. As a result, 20% of the vehicles produced in China are exported and it is the largest car export nation in the world.
• With the world’s largest population, mobility demand in China is served by an increasingly diverse set of solution providers, including internet-backed Smart EV players, the equivalent of which do not exist outside of China.
• With the world’s largest digital economy, new players are emerging on the Chinese competitive landscape that view the car as a smart device. This has a direct impact on the product configuration with cars incorporating internet-era features to provide rich digital experiences.
• Facing rising geopolitical tensions and trade barriers, leading Chinese brands will likely accelerate the move from made-in-China exports to globalizing their production and supply footprint.
  

The Center of Gravity in the Global Auto Industry Moves East

While internal combustion engine (ICE) powered automobiles were invented in Germany in the mid-1880s, mass commercialization of automobiles emerged a few decades later in the early 20th century United States. Henry Ford, Alfred Sloan and Walter P. Chrysler led the Big 3 US automakers from an initially fragmented startup landscape. By 1950, the United States produced over three quarters of all the cars in the world, and Detroit was the epicenter of the global automotive industry (see Figure 1).

After World War II, Germany and Japan emerged as automobile production hubs, initially to serve their domestic markets. However, momentum decidedly shifted over to East Asia in the latter part of the 20th century as oil supply shocks rocked the global economy. As a result, consumer preferences around the world shifted toward makers of small, affordable and more fuel-efficient cars produced by Japanese and later Korean automakers.

Toyota and its lean production system with emphasis on quality, continuous improvement and supply chain management posed an existential challenge to the historical dominance of the US automakers. By 1990, Japan surpassed the United States to become the world’s largest car producing nation.

Over the next decade the US temporarily regained its position as the world’s largest car producing nation as German, Japanese and Korean automakers shifted from an export-oriented model to a more globalized production and supply footprint.

In the 21st century, China became the growth engine for the world’s automakers, contributing nearly all of the growth in automotive industry production and sales volumes since 2000.  Global carmakers flocked to China to sell their products to a large and growing population of consumers, while simultaneously leveraging scale and cost advantages to increase their unit margins. Today, nearly one-third of all cars produced in the world are made in China.

However, global new car sales demand has not kept pace with the growth in production capacity. Global sales of new vehicles peaked in 2017 at 96.1 million units (See Figure 2). Sales in China in 2017 also peaked at ~30 million units, representing just over 30% of the world’s demand for new vehicles. 

Peak Sales and the Rise of New Energy Vehicles

The China automobile market has changed dramatically since 2017, with new car sales declining ~2% on a compound annual basis (see Figure 3). Over this period, demand has also shifted in favor of New Energy Vehicles, which have risen by ~48% on a compound annual basis. Clearly, there has been a dramatic reversal of growth along with a shift in consumer preference.

Domestic sales of ICE powered vehicles have fallen by nearly 11 million units while sales of New Energy Vehicles have risen by 7.5 million units over this period (see Figure 4). Faced with this sudden domestic sales slowdown and shift in consumer preference, carmakers are turning to exports as a way to recapture growth. Exports have risen from 1.1 to 4.9 million units over this period. More that three-quarters of these exports are the pure gasoline powered vehicles that are no longer the first choice preference of Chinese consumers.

Three Waves of Automobility Disruption

China’s emergence as the leading global automobile market is not just a story of growth and scale leading to eventual globalization. While this pattern has happened in the past with German, Japanese and Korean carmakers, mobility problems are solved in a different way in China and often involves a different landscape of solution providers.In the late 20th century, Japanese and later the Korean carmakers gained relevance by building cars more efficiently with improved quality control and efficient supply chain management. Led by developments in China, the global industry now is experiencing a more fundamental shift, where the industry business model is being transformed by technology.

While electrification is perhaps the most clear discontinuity when viewed through the lens of the traditional industry, there is a far more transformative force being exerted by China’s internet economy as it enters into the business of serving mobility demand.We are at the early stage of mobility revolution sparked by entrance of internet and communications technology (ICT) players in the mobility sector. The internet population in China reached nearly a billion users by the end of 2020, providing a huge market for services-oriented demand aggregation. Virtually all of China’s population is served by mobile internet platforms that provide services that involve people or goods movement – and the internet economy is actively investing to optimize the economics of services that invoke some form of mobility.

Entrepreneurial private enterprises have emerged from the digital economy to invest in mobility innovation. As a result, the information and internet technology revolution that started in the late 20th century is now acting as an accelerating force for mobility innovation. The creation and commercialization of the consumer-oriented internet has transformed devices we interact with daily into service-oriented, software-defined platforms.

Digital platform players including China’s internet giants (Baidu, Alibaba and Tencent) and smart device makers (Huawei and Xiaomi) are investing heavily to create smart solutions that unlock new recurring revenue streams linked to mobility, energy and other online and offline services.

China’s digital economy is setting the pace for an entirely new services-centric business model where “new game” commercial opportunities are created. This “new game” is highly embedded in the digital ecosystem and will change the car from a device monetized primarily when sold to a device monetized in multiple ways over its productive life cycle. New Game players often emerge from digital ecosystems and have experience monetizing other software-defined smart devices, and are highly efficient aggregators of services that are accessed through smart devices.

The disruptive forces that are emanating from China and its automotive industry are not merely driving a shift in propulsion technology. Public sector support combined with private sector entrepreneurship and the massive scale of internet economy are disrupting the traditional automotive industry and reshaping the sector in three waves (see Figure 5). The three waves of “automobility” disruption are enabled by technology and are making mobility solutions more affordable and accessible.

The 3 waves of this “Automobility Revolution”form the underlying thesis of our company since we were founded in 2017.  This thesis has proven to be an accurate prediction of how the business model is transformed by technology – which is manifesting far faster in China than elsewhere.

We live in an era where big data is used to provide personalized services that are often accessed through a smart device, powered by the mobile internet. These smart device technologies are now being incorporated into the devices that transport people and goods, which will revolutionize the business of how these mobility devices are monetized.  This began in with app-based on-demand mobility solutions, which scaled rapidly in China in the Automobility 1.0 era.

Mobility services provide access to daily life needs and conveniences, linking us between the places we live, work and play. Multi-modal traffic systems, parking infrastructure, charging stations, public services have all become available through on-demand platforms, bringing investments from the internet giants and device players.

China’s auto sector has fully embraced the “Smart EV” or “Intelligent Connected Vehicle (ICV)” in the Automobility 2.0 era. As a result, we are witnessing a rapid acceleration of the commercialization of new energy vehicle (NEV) propulsion technology and advanced driver assistance systems (ADAS), making mobility safer, more economical and partially freeing the driver from the mundane task of actuating the vehicle.

This will lead to the Automobility 3.0 autonomous mobility on demand (AMOD) era, where people (robo-taxi) and goods (robo-delivery) movements are automated. Of course, driver-actuated mobility will co-exist with such devices, but the overall economic advantages of smart, autonomous vehicles will spark large-scale commercial deployment.

With its large and commercially aggressive digital economy, China is effectively transforming the traditional product-centric automotive industry business into a services-centric Internet of Mobility (IoM) business model.

When the vehicle is conceptualized as a smart device, it collects information on the users, the vehicle, and its surroundings. All the data generated from the vehicle and users can be uploaded to the cloud for analytics to better provide data-enabled services to users in vehicles (see Figure 6).

By configuring vehicles to be smart and interconnected, China is leading the way toward integrating Smart EVs into broader ecosystems, such as energy management. This integration not only serves as a model for global markets but also underscores the potential for Smart EVs to play a crucial role in the sustainable management of urban energy systems. This development is further described in our article “From Smart EV to Smart Grid:  Building the Internet of Energy Ecosystem”.

How IoM Impacts Product Configurations: Smart EV/ICV Case Examples

This “Internet of Mobility” revolution is happening faster in China and at an unprecedented scale, guided by supportive government policies and backed by investments from the world’s largest digital economy.

With the rise of the mobile internet, smart devices have become a de-facto way for the more than 1 billion internet users in China to conveniently access services where mobility is required – these include ride hailing, e-commerce, and food delivery (see Figure 7).

As key stakeholders in the mobility value chain, internet companies exert a transformative force on the traditional automotive value chain. Internet-backed mobility players place user-centric mobility services – not just product hardware sales and service – at the center of their value chain (see Figure 8), while prioritizing the monetization of services that can be delivered through their app-enabled digital ecosystems.

This places higher emphasis on configuring the vehicle with internet-era features which optimize the ability for an Intelligent Connected Vehicle (ICV) to aggregate vehicle and user data in order to unlock new recurring revenue streams (see Figure 9).

Backed by the world’s largest digital economy, Chinese car makers are redefining premium as vehicles designed to deliver upgraded in-cabin user centric experiences, often leveraging internet-era features and technology. By doing this, they are able to generate recurring after sales revenues linked to their digital ecosystem. Several of China’s digital natives are also building the operating systems for the Intelligent Connected Vehicle (ICV). Examples include Huawei’s Harmony OS, Xiaomi’s MiOS, Alibaba’s AliOS, etc.

Consequently, features that unlock unique digital experience for all occupants – have become essential among Chinese consumers. While still important, driving experience is no longer the main purchase criteria. Brands that are late to recognize the importance of digital experience are left with a much weaker market position compared with a few years ago.

Figure 10 provides examples of how several internet-backed Smart EV players are influencing product configurations, and in the process are able to command pricing power based on their ability to deliver a differentiated in-cabin digital experience.

Figure 11 provides an example of how legacy automakers like BYD and its family of brands can also embrace this trend, incorporating unique in-cabin designs that provide their customers a differentiated experience of mobility.

What Happens in China WILL NOT Stay in China

Unlike Las Vegas, what happens in China will not stay in China. At least not as it pertains to the Future of Mobility. In fact, Made-in-China is already going global in a big way.

China’s domestic automotive market peaked in 2017, in part resulting from the diversity of mobility solutions that now compete with new car sales. This includes growth sales of previously owned vehicles that offer an affordable alternative to purchasing a new car. In addition, the wide embrace of on-demand mobility solutions offers an affordable alternative to car ownership for urban commuters.

Although there has been a small domestic sales recovery since 2020, we do not expect a big expansion of demand for new cars in the coming years. Rapid growth in NEV demand since 2020 has placed considerable pressure on companies producing gasoline powered vehicles, exposing a severe capacity overhang in China.

As a result, local and foreign carmakers in China are faced with a choice:  find markets outside of China to buy these vehicles or close factories that are no longer needed to serve the domestic market. Most carmakers have chosen to aggressively expand exports since 2020 (see Figure 12).

As noted earlier, more than three-quarters of these exports are pure gasoline powered vehicles that are no longer preferred by Chinese consumers. While Chinese consumers have shifted in their buying preferences toward Smart EV/ICV configurations, the same cannot be said for consumers in the rest of the world, where gasoline powered vehicles with limited digital content still prevail. This provides an opportunity to reallocate these capacities to the global markets.

Chinese companies will now encounter the risks that highlighted in the 2009 edition of The Path to Globalization of China’s Automotive Industry. However, the world of 2024 has been transformed by the mobile internet, and Chinese companies are far more evolved and capable players in this new “Internet of Mobility” game. 

The “Two Worlds” Scenario

Going forward, we see the auto industry moving toward a “Two Worlds” scenario by 2030 (see Figure 13). Carmakers from developed (W2) regions like US, EU, Japan and Korea remain committed to their traditional product, technology and business model preferences and only change incrementally.

However, another world (W1) has emerged, led by China. In this world, mobility problems are solved with shared, connected, electric and intelligent solutions. These solutions are delivered affordably by leveraging efficient and highly scaled supply chains.

We believe Emerging Markets (W3) in regions like Southeast Asia, Central and South Asia, Middle East, Africa and Latin America will gravitate toward affordable solutions that leading Chinese carmakers can offer. The rapid growth in demand for Chinese cars in W3 regions offers evidence that this is already happening. 

There is strong evidence that Chinese carmakers can gain acceptance in the W2 regions as well. However, protectionist tariffs have been erected in the US and EU, forcing Chinese carmakers to expand beyond “Made-in-China” even faster.

The Path to Globalization – 2024 Edition

Faced with a slowing domestic market and overcapacity, Chinese carmakers are going global rapidly by leveraging exports. In 2024 through July, about 1 of every 5 Made-in-China cars were exported to many destinations (see Figure 14).

While exporting vehicles is a way to get started in the global markets, it is not the most efficient business model. Tariff and trade barriers place significant additional costs on top, forcing companies to consider regionalizing their production and eventually their supply chains in order to navigate these challenges.

As regional demand expands, the business model evolves to toward knock-down (KD) assembly of parts sourced from the home country. As volume expands further, fully functional assembly of parts sourced in the regional markets eventually supplants the centralized Made-in-China export model. Ultimately global companies act locally in putting a “glocalized” hybrid ecosystem together (see Figure 15). This path is similar to what other global automakers like Volkswagen, Toyota, Hyundai and others have achieved.

Building robust regional supply chains and forming partnerships with distributors will become essential as companies seek to establish their footprint in the overseas markets.

Several Chinese carmakers (led by Chery, Great Wall, Geely and SAIC) have been investing to build capacities in overseas market even before the rise of China’s New Energy Vehicles (see Figure 16).

Recently BYD, the number 1 EV maker in China, has made a significant shift to regionalize their production in Thailand, Hungary, Turkey, Brazil and Mexico.

While tariff protections are a means of slowing the export of Made-in-China cars, they also encourage the carmakers to move more quickly to globalize their production and supply footprint.

Closing Comments from Bill Russo:

My 2009 paper was a thought experiment on what it would take for Chinese carmakers to emerge on the global stage.

In 2024, China makes nearly one third of all cars in the world, nearly two thirds of all electric vehicles, and 70 percent of EV batteries. The globalization of Chinese carmakers is a fact and it is a game-changer on many levels.

With a domestic market that is not providing an opportunity for growth,  automakers in China have prioritized exports in order to improve the utilization of their installed capacities. As a result, 20% of the vehicles produced in China are exported and it has quickly become the largest car export nation in the world.

At the same time, demand for New Energy Vehicles has expanded rapidly and now represents more than one-third of all vehicles sold in China, and Chinese companies have ~80% of this segment.

The unique capability for Chinese carmakers to offer affordable technology-enabled solutions has resulted in a complete realignment of the competitive landscape, where Chinese brands now have 63% share of domestic passenger vehicle sales, up 27% since 2020.

With the world’s largest digital economy, new players are emerging on the Chinese competitive landscape that view the car as a smart device. This has a direct impact on the product configuration with cars incorporating internet-era features to provide rich digital experiences.

Facing rising geopolitical tensions and trade barriers, leading Chinese brands will likely pivot from Made-in-China exports to globalizing their production and supply footprint.

Global automakers are now faced with the challenge of how to cope with the rise of Chinese companies both in China as well as in the markets around the world. We believe that Chinese companies may struggle in their efforts to go global, but several will ultimately prevail to become global leaders.

The time to act is now for global carmakers, suppliers, and dealers to leverage their global presence and capabilities by engaging with the leaders emerging from China via M&A, strategic partnership, joint R&D, and joint ventures.

Going global together with the new players emerging from China may be the best way forward. The alternative of retreating from China cannot prevent the Chinese from going global on their own.

NIO shares rose more than 14% on Thursday after the Chinese electric vehicle maker reported record revenue of RMB 17.5 billion ($2.4 billion) in the second quarter that ended June 30, beating estimates, according to a Bloomberg survey. Its quarterly adjusted net loss shrunk 16.7% to RMB 4.54 billion from a year earlier, and the margin per vehicle sale improved to 12.2% from 6.2% a year earlier and 9.2% a quarter ago, better than analysts’ expectation thanks to cost reduction efforts. NIO’s management expects vehicle margin to grow over the rest of the year as as much as 15% in the fourth quarter, as the company aims for a higher monthly delivery target of between 30,000 and 40,000 units of its namesake luxury brand.

Meanwhile, the first model under its mass market brand, Onvo 60, is set to go on sale in September with monthly deliveries expected to exceed 20,000 units some time next year, chief executive William Li told investors during an earnings call. NIO in May began taking reservations for the compact crossover with a pre-sale price tag of RMB 219,900, cheaper by RMB 30,000 than the entry-level Tesla Model Y. NIO will have three brands in the price segment of RMB 140,000 to RMB 800,000 next year, Li added, as its entry-level lineup, codenamed Firefly, is anticipated to debut at the end of this year.

Chinese manufacturer Changan Automobile said on Tuesday it had opened a new European office in Germany, facilitating the company’s entry into the world’s third largest regional market where peers such as BYD and Chery are also forging ahead.

Why it matters: The move is part of Changan’s ongoing efforts to sell vehicles overseas and improve its financial performance as cutthroat competition in the home market weighs on its margins.

• Changan last week reported (in Chinese) a 5.9% fall in net profit of around RMB 1.2 billion ($160 million) attributable to a deduction in non-recurring profits or losses for the first half of this year.
• Gross margins for overseas business sat at a decent 26.91% while that number for domestic car sales was 10.1%, generating an overall gross margin for the period of 13.8%, down 2.5% from a year prior.

Details: Changan Automobile Deutschland, Changan’s Munich-registered subsidiary, will cover market research, product engineering, testing or homologation work, as well as sales and customer services, the company said in an announcement (in Chinese).

• The automaker also said on Wednesday that its first regional plant for electric vehicle manufacturing in Southeast Asia will start operations in Thailand in the first quarter of next year. The 8.8 billion Thai Baht ($241.7 million) facility will have an initial capacity of 100,000 vehicles annually.
• Changan, a manufacturing partner of Ford and Japan’s Mazda in China, added it is considering setting up production facilities in Europe, as well as Central and South America, without revealing further details. Its vehicle exports grew 67.6% annually to 228,607 units from January to July.
• China’s fourth largest automaker by sales volume said (in Chinese) last March it planned to introduce five EV models in Europe in 2024, including the Avatr 11, a luxury sports utility vehicle, as well as the more affordable Deepal S7 crossover. Avatr and Deepal-branded cars feature Huawei’s in-car technology at home.

Context: In addition to the two-decade car production partnerships with Ford and Mazda in China since the beginning of this century, state-owned Changan has been working closely with Chinese tech giant Huawei for assisted driving and infotainment over the past few years. The two companies last month reached a RMB 11.5 billion deal for Changan to take a 10% stake in Huawei’s automotive business unit.

• More Chinese automakers are making forays into the European market. BYD said on August 30 that it expects to close the acquisition of its German distributor Hedin Electric Mobility in the fourth quarter of this year, according to Reuters. Land Rover’s partner Chery in April reached a joint venture deal with Spain’s EV Motors to produce cars at a former Nissan plant in Barcelona later this year, China Daily reported.

READ MORE: Chinese carmakers to become dominant globally despite tariffs – AlixPartners 

Chinese electric vehicle makers BYD, Leapmotor, and Geely-owned brand Galaxy delivered record-breaking numbers in August, as demand began to pick up partly due to government stimulus measures, according to company statements issued on Sunday. Meanwhile, sales of Huawei-backed EV brands dropped sharply.

Why it matters: The figures come after many Chinese automakers have launched new and redesigned models, greatly increasing their store traffic and boosting sales, despite summer being typically a low season for car demand in China.

• Beijing’s new subsidies for consumers to trade in their old, less eco-friendly cars for new and greener ones is another driving factor, said the China Passenger Car Association (CPCA) in a post (in Chinese).
• The industry group expected sales of China’s new energy vehicles (NEVs), including all-electrics and plug-in hybrids, to improve by 36.6% year-on-year and 11.6% month-on-month to 980,000 units in August.

Details: Stellantis-backed Leapmotor in August surpassed the threshold of 30,000 units sold for the first time since its inception, as sales of its C16 sports utility vehicle continue to gain traction. More than 8,000 units of the affordable six-seater SUV, which went on sale on June 28 at a starting price of RMB 155,800 ($21,937), were handed over to customers last month.

• Geely’s mainstream EV lineup Galaxy also set a new delivery record, generating 26,510 unit sales in August, which represented a 58.7% increase from a month earlier. The strong growth was partly driven by the launch of the E5 all-electric compact crossover, featuring an in-car operating system called Flyme Auto, which is priced between RMB 109,800 and RMB 145,800 until the end of September.
• Meanwhile, sales of Huawei’s Harmony Intelligent Mobility Alliance (HIMA) dropped sharply partly because Seres, a manufacturing partner of Huawei, was reportedly refining manufacturing lines before launching upcoming models. Seres, as well as Chery, together delivered 33,699 EVs featuring Huawei’s in-car technology in August, down 25% from a month earlier and far fewer than rival Li Auto.
• Notably, Volkswagen-backed Xpeng Motors recorded its highest monthly deliveries this year, signaling a likely recovery after nearly a year of lackluster sales. The company said it delivered 14,036 units last month and secured more than 30,000 reservations with non-refundable RMB 5,000 deposits for the MONA M03 sedan in the 48 hours after its unveiling on July 27.
• BYD clocked its highest-ever sales of 370,854 passenger EVs in August with 35.3% year-on-year growth. Last month, the EV giant rolled out several new and updated models to defend its dominant position, including a facelift of its Seagull small SUV, priced from RMB 69,800, and a RMB 339,800 luxury grand tourer, the Denza Z9 GT. It also unveiled the first multi-purpose vehicle under the Dynasty lineup, the Xia, on August 30.

Context: China’s central government announced on August 16 that subsidies for trade-ins of NEVs and internal combustion engine cars have doubled or more to RMB 20,000 and RMB 15,000, respectively, a significant ramp-up compared with the previous rules issued in April.

• More than 680,000 applicants have submitted their filings for the cash incentives as of August 22 with more than half filed over the past month, according to a spokesperson from the Ministry of Commerce (in Chinese).

READ MORE: BYD, Li Auto, Leapmotor post record monthly sales, putting pressure on rivals

​US-listed shares of Xpeng Motors climbed 6.5% after the Chinese electric vehicle maker received more than 10,000 non-refundable orders for the first model under its new budget brand MONA in the first hour after it was unveiled on Tuesday. 

The company’s cheapest model, featuring an assisted driving system similar to Tesla’s Full Self-Driving (FSD) software at a price that’s half that of the popular Model 3, is expected to capture market share from top-selling offerings including the BYD Qin and Nissan’s Sylphy.

Camera-based vision: Xpeng eliminated laser sensor units from the MONA M03 in a move to accelerate the adoption of a camera-only approach to vehicle autonomy. Lidar is more often used to capture three-dimensional information for autonomous navigation on more luxurious Chinese EV models priced mostly from RMB 200,000 ($28,060) and above. 

• Instead, the entry-level M03, with a price tag of RMB 119,800 ($16,808), integrates 20 or so more affordable sensors, including a dozen ultrasonic sensors and seven exterior cameras, to enable safety-based driver assistance functions such as lane keeping assist, which enables the EV to follow the preceding vehicle. Xpeng’s Xpilot system would also maneuver the car in and out of challenging situations such as dead-end roads.
• The top-end version of the MONA M03, priced at RMB 155,800 ($21,859), will be able to function by itself on all Chinese roadways using the same hardware stack as well as more complex algorithms next spring when delivery is set to begin. This makes the car the only model available to the market that offers advanced driver assistance capabilities within the RMB 200,000 price range, said chief executive He Xiaopeng. 
• Xpeng also provided more details about its plan to make EVs with highly autonomous capabilities as part of the launch. The XNGP advanced driver assistance system (ADAS), an FSD-style technology, should require drivers to take over the wheel and steer manually less than once per 100 kilometers (62 miles) by the end of next year. The company added its cars could be completely driverless in low-speed traffic scenarios in 2026. 

READ MORE: Chinese companies take on Tesla’s Full Self-Driving with non-lidar approach, end-to-end AI 

Aiming for the youth market: Xpeng on Tuesday reported a better performance than some rivals’ offerings in terms of order intake for the MONA M03, saying the car racked up more than 10,000 pre-orders with non-refundable deposits of RMB 5,000 in roughly the first hour after it was released. 

• Positioned to be “the first car for China’s young generation,” the all-electric compact sedan boasts a large interior space, efficient energy consumption, and yet a relatively simple interior in order to attract the country’s tech-savvy but budget-conscious customers, such as fresh graduates.
• Measuring 4.8 meters in length and spanning a 2,815-millimeter-long wheelbase, the car was designed based on aerodynamic principles with sleek coupe-style body lines. This contributes to a drag coefficient of 0.194 and energy consumption of 11.5 kilowatt-hours per 100 kilometers (7.15 kWh per mile). 
• The single-motor M03 offers a decent range of up to 620 km (385 miles) on a single charge, powered by an affordable lithium iron phosphate (LFP) battery pack from BYD, and can accelerate from 0 to 100 km/h (62 mph) in 7.4 seconds. It also gives an additional 200 km of range after 15 minutes of charge. 
• Still, the car’s well-built but simple interior features may leave some drivers wanting more. An M03 buyer would have to pay an additional RMB 599 to equip their car with a conventional dashboard screen as an add-on component, for example. Xpeng stated that the car would function properly with a 15.6-inch centre screen. 

Context: Xpeng is expecting a strong sales recovery with the launch of the MONA M03 at a lower-than-expected price tag, as CEO He in April said he hoped that the car would sell better than the Xiaomi SU7 in the second half of this year, Reuters reported. The smartphone maker has been delivering more than 10,000 units per month of the $30,000 sports sedan since June. 

• He also anticipated annual sales of the car could reach 100,000 units when Xpeng revealed last year that it would acquire the EV business of ride-hailing giant Didi, including the MONA project, which stands for “Made of New AI.” He added on Tuesday that the two companies spent RMB 4 billion on the project over four years. 
• The gross margin of the M03 could be at a low single-digit level initially, however, as the Volkswagen-backed EV maker ramps up production and looks to keep its price as low as possible, Jefferies analysts wrote in a note on Aug. 20. 
• BYD’s Qin Plus was the top-selling model in the price segment of between RMB 120,000 and RMB 180,000 in China over the past six months with roughly 154,000 units sold, figures compiled by Chinese auto service platform Dongchedi showed.

Chinese action role-playing game (RPG) Black Myth: Wukong has sent shockwaves through the global gaming community and the impact is spreading to the automotive industry, as a Geely-linked firm is testing out new in-car gaming experience with the hit title, TechNode has learned.

Why it matters: Geely’s move shows how software-enabled advanced functionality, from watching video streams on the dashboard screen to letting the car change lanes autonomously, is becoming a decisive factor for vehicle buying in the world’s biggest auto market. Bringing China’s first AAA game to its cars could be a new way for Volvo’s parent to stimulate demand among younger drivers

Details: Ecarx, a Chinese auto tech startup backed by Geely’s chairman Li Shufu, has managed to deliver 2K resolution (2,560 x 1,440 pixels) at nearly 60 frames per second (FPS) when it tested the Black Myth: Wukong on its next-generation digital cockpit computing platform Makalu. That’s according to people familiar with the matter who spoke to 36Kr (in Chinese) on Tuesday.

• The instrument panel, the central information screen, as well as a head-up display (HUD) unit that projects traffic information onto the windshield, were functional while the game was streamed, according to the report. A company spokesperson confirmed to TechNode on Friday that the test is ongoing to improve the gaming performance further. 
• Ecarx announced last March that it had become the second auto firm worldwide to bring in-car entertainment experience with AMD’s laptop graphic chips. The Makalu computing platform consists of AMD’s Ryzen V2000 processors paired with the AMD Radeon RX 6000-series GPUs, providing up to 10.1 teraflops of computing power, more powerful than Qualcomm’s latest-generation Snapdragon 8295 chips.
• For comparison, Tesla has also pursued the offering of in-car games as chief executive Elon Musk reportedly claimed in 2020 that owners would be able to play the adventure title The Witcher 3 in its vehicles. AMD said in 2021 that its Ryzen computers and RDNA2 GPUs are powering the infotainment systems in the new Model S and Model X vehicles. Sony also integrates SoCs (System on Chip) from the US chipmaker into its PlayStation 5 consoles.
• The Makalu platform allows game developers to adapt their games to in-car systems by using Unreal Engine, a real-time, three-dimensional graphics creation software from game company Epic Games, which has been used by China’s Game Science for the production of Black Myth: Wukong. Vehicle occupants could therefore play triple-A high-definition video games via Ecarx’s system, the company said on its website. 
• Geely confirmed that the Lynk & Co Z10 large sedan will be the first model to feature a digital dashboard that integrates Ecarx’s latest computing platform. The first all-electric model under the Geely and Volvo Car joint brand will be launched on Sept. 5 following reservations opening on August 15 at a pre-sale price of RMB 215,800 ($30,234). 

READ MORE: Geely’s Lynk & Co 08 to use in-house car software from Meizu for the first time

Context: Global automakers such as Volkswagen and Mercedes-Benz have been working on mobile technology and artificial intelligence to shape the future of immersive in-car experiences. Meanwhile, NIO and Ji Yue, a Chinese EV brand owned by tech giant Baidu, have enabled users to play the hit racing game Asphalt in their latest models equipped with a Qualcomm semiconductor. 

• Black Myth: Wukong is China’s most successful PC-end game to date after selling around 4.5 million copies across various gaming platforms by far. Inspired by the Chinese literary classic Journey to the West, the action game hosted more than 2.2 million users online concurrently just hours after it was launched on Tuesday, TechNode reported. 

Chinese tech giant Huawei’s automotive business unit has been valued at around RMB 115 billion ($16 billion), after it struck a deal to sell a 10% stake to Changan Automobile for RMB 11.5 billion, the two companies announced on Tuesday.

Why it matters: Changan shares fell by 4.3% on Tuesday as the deal will see it own a smaller than expected stake in Huawei’s car unit. Huawei will retain its control of the business and pursue a diversified ownership structure to deepen its links with multiple automakers.

Details: Changan issued a statement (in Chinese) on Monday evening saying that its subsidiary Avatr was set to sign a deal with Huawei the next day to take a 10% stake in Shenzhen Yinwang Intelligent Technology Co., Ltd. (also called Newcool) for about RMB 11.5 billion. Avatr will nominate a director to sit on the company’s seven-person board.

• The signing ceremony, which also took place on Tuesday morning, was attended by Eric Xu, rotating chairman of Huawei, and Richard Yu, chairman of the board of directors of Huawei’s Intelligent Automotive Solution (IAS) business unit, as well as Changan’s president Zhu Huarong, according to an image posted by Avatr on microblogging platform Weibo.
• The size of the deal was significantly smaller than expected– Changan had revealed plans to acquire a stake of up to 40% stake in the joint venture in November. Meanwhile, Seres, another manufacturing partner of Huawei, said (in Chinese) on July 28 that it has been in talks with the smartphone maker to buy parts of the company.
• Huawei is also in early-stage talks with state-owned automaker FAW to sell a minor stake in its auto business, although no significant progress has yet been made. Peers Dongfeng Motor, BAIC, and JAC are among the potential investors in the business as well, with these firms all having developed or about to launch new electric vehicles that feature Huawei’s assisted driving technology.
• Huawei in 2020 co-established Avatr with Changan and Chinese battery maker CATL by providing technological know-how without direct investment in the luxury electric vehicle brand. Changan and CATL are the largest shareholders in Avatr with stakes of roughly 41% and 15%, respectively.

Context: Huawei expanded its consumer electronics business into the booming Chinese EV industry with the establishment of its IAS business unit in mid-2019, just as the US banned the supply of semiconductors and operating systems to the Chinese tech giant. It began selling EVs for partners via its retail network in early 2021 and has stressed repeatedly it has no intention to build vehicles itself, but instead aims to help automakers make better cars.

• Huawei has since faced pushback from some traditional Chinese automakers amid concerns that they could lose out on customers if the company makes its own cars. Some traditional automakers have also looked to retain more ownership of in-car technologies through partnerships with smaller suppliers.
• The situation improved last year when the redesigned Aito M7 crossover and premium M9 sports utility vehicle produced by Seres became hits. Legacy automakers have also been pressured by a ferocious price war and have struggled with their own autonomous vehicle efforts.
• Huawei estimated that around 500,000 cars equipped with its technology will be on the roads by year-end, Reuters reported in April, saying it expected its car business to break even this year compared with the RMB 6 billion losses it recorded in 2023. It is also partnering with global majors including Toyota and Audi.

READ MORE: Huawei creates separate car division, open to Changan and other outside investors

Audi’s new A5 sedan and all-electric Q6 e-tron crossover will be the company’s first models to use Huawei’s advanced driver assistance system (ADAS), enabling the cars to change lanes and overtake autonomously in Chinese cities, local media has reported.

Why it matters: The news marks the latest development in a six-year collaboration between Audi and Huawei. The companies announced in mid-2018 that they had signed an agreement to develop a level 4 autonomous driving system that could take complete control of a vehicle without human intervention in Chinese urban traffic environments.

• Audi had been planning to incorporate Huawei’s autonomous driving technologies in future China-made models scheduled for launch in 2025 and had been asked to buy small stakes in Huawei’s intelligent vehicle software and components firm, Reuters reported in December.

Details: The new A5 sedan, the first model that utilizes Audi’s last new internal-combustion architecture called Premium Platform Combustion (PPC), is expected to make its China debut at this year’s Guangzhou Auto Show in the capital of Guangdong province in November. That’s according to people familiar with the matter who spoke to Chinese media outlet iYiou.

• Sources added that the hatchback-style sedan, which replaces the A4 model in the German firm’s vehicle lineup, will also incorporate Huawei components such as electronic control units, and is intended to be launched at the Auto Shanghai Show 2025 next April. The A5 will be manufactured by Audi and FAW Group, one of its Chinese partners.
• Meanwhile, there has been speculation that the Q6 e-tron, Audi’s first car to use Volkswagen’s advanced premium platform electric (PPE) platform, will also use Huawei’s ADAS. Meanwhile, Audi is working with Chinese self-driving car startup Momenta on automated driving for a separate new series which has been under development with SAIC, the German firm’s other local manufacturing partner, the report said.

Context: Volkswagen’s Audi is not the only international car major open to teaming up with Huawei. Toyota has reportedly agreed to buy Huawei’s autonomous driving stack for its China-made electric vehicles, while a growing number of Chinese car manufacturers are expanding their collaborations with the tech giant. Huawei has estimated that around 500,000 cars equipped with its tech will be on the roads by year-end, Reuters reported.

• Huawei is gaining traction thanks to growing customer demand for intelligent driving functionalities in the world’s largest auto market. One company executive said last week that the latest Advanced Driving System (ADS) offers Chinese users better safety in a point-to-point autonomous experience than Tesla’s Full Self-Driving (FSD) system, as TechNode reported.
• Audi reported sales of more than 320,000 luxury cars in China for the first half of this year, falling slightly by 1.9% from the previous year and lower than the total sales of BMW and Mercedes-Benz. The German luxury carmaker has been planning a series of measures to defend its market share as domestic rivals such as Li Auto and NIO are on the rise, including buying EV technologies from SAIC and designing a new logo for future vehicles, reported Reuters.

China’s CATL on Aug 10 opened its first ever bricks-and-mortar store, with an enormous site in Chengdu showcasing nearly 100 electric vehicle models from dozens of automakers, in a move intended to beef up its brand image as a leading EV battery maker.

Why it matters: Entitled NING Space, the store is the latest brand-building initiative by the world’s largest battery maker by volume, which not only wants its automobile clients to be familiar with its products but hopes to influence end customers’ preferences, as smaller competitors chase market share by cutting prices.

Details: CATL’s first major physical location accounts for approximately 13,800 square meters (148,542 square feet) of Chengdu, the capital of China’s populous southwestern province of Sichuan.

• The facility has nearly 100 EV models on display, including top-sellers such as the Tesla Model 3, Li Auto’s L7, and the Aito M7, all powered by CATL’s lithium-ion batteries.
• It does not serve as a sales location but focuses on brand building and customer education. As Vice President Li Ping emphasized to participants at the site’s opening ceremony, CATL does not make or sell cars, Caixin reported (in Chinese).
• CATL said the NING Space will play an educational role, with its employees there to provide customers with tailored recommendations and to hold regular marketing events to tell users the EV story from a battery-maker’s perspective.
• Meanwhile, the battery giant is establishing an independent after-sales service network to provide personal buyers with maintenance and repairs for EV batteries. It boasts 112 such service centers nationwide, versus more than 600 business-to-business locations.

Context: CATL on July 26 reported mixed results for the first half of this year while its net profit jumped 10.4% from a year earlier to RMB 22.9 billion ($3.2 billion). Yet revenue dropped 11.9% year-on-year to RMB 167 billion over the same period, which the company attributed to a significant drop in the cost of raw materials needed to produce EVs.

• The battery supplier, headquartered in the eastern Chinese city of Ningde, remains the world’s top player in the industry, recording 137.7 gigawatt-hours (GWh) worth of batteries and securing a market share of 37.8% from January to June, according to figures published by South Korean market research agency SNE Research.
• The company has been launching advertising campaigns and attending marketing events over the past year to share its founder’s vision for green energy and showcase its signature products such as the Shenxing battery.
  

Correction: An earlier version of the article miscalculated the floor area of CATL’s first store which is 13,800 square meters (148,542 square feet), rather than 13,800 square kilometers (5,328 square miles) as mentioned.

Huawei on Tuesday released the latest version of its advanced driver assistance system (ADAS), saying  it would enable vehicles to carry out most driving functions automatically from garage to garage while delivering a better safety performance than Tesla’s most advanced Full Self-Driving (FSD) system.

The Chinese technology giant also launched the Stelato S9, the first model under its new luxury brand with manufacturing partner BAIC, at a lower-than-expected price range of RMB 399,800 to RMB 449,800 ($55,664-$62,625). The five-meter-long full-size luxury sedan is targeted at consumers of premium offerings such as the Mercedes-Benz S-Class and BMW’s 7 Series.

Huawei’s self-driving approach: Huawei’s latest Advanced Driving System (ADS) now allows cars to navigate complex urban environments nationwide automatically, with features such as lane switching, said Richard Yu, chairman of the board of directors of Huawei’s Intelligent Automotive Solution business unit, at a press conference in Beijing. Yu added that the ADAS will enable drivers to pass toll gates on Chinese expressways and at public parking lots without manual engagement. 

• In a demonstration video, Huawei boasts of a point-to-point autonomous experience with no human input at all, as the Stelato S9 navigates from one garage to another, autonomously piloting itself on Chinese city streets, and through a series of roundabouts and intersections. The female driver in the video is shown drinking a coffee and applying make-up behind the wheel as the car drives into and out of the garages.
• Huawei said it is transitioning to an “end-to-end” autonomous driving method, defined by Tesla’s Elon Musk as a state whereby each functionality of the ADAS is carried out by a single gigantic neural network rather than by predefined, explicitly coded rules. However, Huawei’s slides showed that the company uses separate neural networks for multiple tasks such as visual perception and path planning, in a move similar to that of rivals Li Auto and Xpeng.
• Yu said users would see an improvement in decision-making speed and more human-like behavior from the ADS 3.0 version, as well as a more agile automatic emergency braking feature in a joint effort with the company’s unnamed German supplier. Huawei claimed the system would even apply brakes automatically when a collision was imminent with a lead or rear vehicle, as well as if the system detects that drivers intend to jam the brakes but mistakenly slam on the accelerator.
• In addition, Yu spoke publicly about Tesla’s FSD after his employer tested the rival’s system in multiple cities in the US and Canada, saying the smartphone maker has a better strategy for dealing with rare or complex road scenarios, known as corner cases. “Tesla has made big progress with its FSD, but it has to raise the lower limit of the system’s performance as we encountered several incidents where a Tesla almost crashed into stationary objects such as trucks,” Yu added (our translation).

Stelato’s first model: Huawei on Tuesday stepped up its offensive against international luxury carmakers as the first Stelato model went on sale at a starting price of RMB 398,000, roughly RMB 50,000 lower than the pre-sale price and below market expectations. Yu said the S9 executive sedan was “fully ahead of” rivals’ offerings, such as the Mercedes-Benz S450L and Maybach S480, with a more efficient interior space, improved aerodynamic properties, a longer driving range, and faster acceleration.

• The first full-size luxury sedan under Huawei’s Harmony Intelligent Mobility Alliance (HIMA), a joint EV effort between Huawei and its multiple manufacturing partners, is powered by a 100 kilowatt-hour (kWh) battery pack for a driving range of up to 816 kilometers (507 miles). The battery, jointly made by CATL and Huawei, also adds 200 km on a five minute charge, when the car is used with an 800-volt capable fast charger.
• The Stelato S9 boasts a faster acceleration to 100km/h (62 mph) than existing offerings – in 3.9 seconds – as well as a drag coefficient (Cd) of 0.193, said to be the lowest among production sedans in its segment. It also integrates a lidar unit to measure and map the surrounding environment, in addition to cameras and radar, which the tech giant believes could provide extra input to its ADAS system, compared with Tesla’s pure-vision approach.
• Delivery is scheduled to begin immediately on Wednesday, demonstrating BAIC’s pledge to ”go all-in“ in its partnership with Huawei and treat the new model as its “top priority,” as chairman Zhang Jianyong told the conference. A major partner of Mercedes-Benz in China, BAIC recently established a new plant capable of making 120,000 EVs annually with Huawei and plans to expand that capacity to 300,000 EVs, Zhang confirmed on Tuesday.

READ MORE: Chinese companies take on Tesla’s Full Self-Driving with non-lidar approach, end-to-end AI

Chinese electric vehicle makers BYD and Li Auto set new records for deliveries in July, usually a low season for auto sales, following the strong momentum built in the previous month and likely extending their lead over rivals as competition in China’s EV sector remains intense.

Why it matters: The numbers come against a stormy backdrop with a growing number of Chinese automakers taking aim at each other in the press, as a cutthroat price war has been running for more than a year and a half, deepening losses of most players.

• Li Auto was put in the dock of public opinion recently for publishing weekly sales figures including those of its major rivals such as Huawei-backed Aito, Geely-affiliated Zeekr, and Xiaomi, pushing most of the rest of the industry to complain. On July 30, Ma Lin, an assistant vice president of brand and communication at NIO, quoted China’s top leadership on social media and called on Li Auto founder Li Xiang to stop the “low-level competitive behavior” that has gone on since last April (our translation).
• On the same day, Xpeng chief executive He Xiaopeng openly criticized some rivals competing over sales volumes on a weekly basis rather than leading technologies such as end-to-end neural networks, without mentioning Li Auto by name. Victor Yang, a senior vice president at Geely, also publicly endorsed their opinions on the Chinese microblogging platform Weibo. The comments came immediately after China’s top decision-making body the Politburo pledged to prevent “the vicious competition of involution” in domestic industries, Caixin reported.
• Top Chinese auto business leaders overall appear split on the issue of competition. At this year’s China Auto Chongqing Summit in June, BYD chairman Wang Chuanfu said he advocated for businesses to embrace the competitive spirit and strive for excellence, while other counterparts, such GAC’s Zeng Qinghong and Geely’s Eric Li, said disorderly competition could result in inferior quality and shrinking profits. Richard Yu, chairman of Huawei’s Intelligent Automotive Solution business unit, playfully called BYD “the king of Juan,” which in Chinese means the top player amid fierce market competition.

Details: BYD announced on Thursday (in Chinese) that it sold 340,799 EVs in July, the company’s best-ever monthly result this year and just 244 units fewer than its all-time high in December. Still, the Chinese EV giant saw a lackluster performance in its premium lineups. Fangchengbao’s sales plunged 31.3% to 1,842 units from a month earlier, while Yangwang’s sales of 439 units remained flat compared to June.

• Li Auto posted its best-ever monthly result, delivering 51,000 plug-in hybrid and fully electric vehicles in July, bringing its total delivery count for the year to almost 240,000 units. This was attributed to the strong sales of the L6, its most affordable crossover, which accounted for roughly 40% of its deliveries last month. The $34,500 extended-range hybrid crossover travels up to 1,390 kilometers (864 miles) on a full charge and tank.
• Stellantis-backed Leapmotor surpassed the threshold of 20,000 units for the second month in a row, as sales of its C16 sports utility vehicle gained momentum. The company has positioned the vehicle as a cheaper alternative to Li Auto’s L9 with a similar appearance, range, and practicality. The Hong Kong-listed EV startup said on July 22 it had more than 10,000 non-refundable orders for the six-seater crossover at a starting price of RMB 155,800 ($21,610).
• Meanwhile, sales of Geely, Great Wall Motor, NIO, and Huawei-backed EV makers were down slightly. NIO delivered 20,498 units in July, only 711 less than a month earlier, and passed the 20,000 unit milestone for a third consecutive month, though the company has been providing fewer cash incentives to buyers since July 22.
• Huawei’s Harmony Intelligent Mobility Alliance (HIMA), which for now includes Aito and Luxeed brands only, delivered 44,090 units last month, representing a 4% decline from June, in the face of competition from players such as Li Auto. The new energy vehicle (NEV) sales of Geely and Great Wall Motor, which include all-electrics and plug-in hybrids, decreased 10.5% and 7.5% month-on-month in July, respectively.
• Xiaomi, Xpeng Motors, and CATL-backed Hozon Auto each delivered more than 10,000 units last month. China’s smartphone giant is aiming for an annual delivery of 120,000 units of its first model, an all-electric sports sedan with styling similar to the Porsche Taycan and priced at less than $30,000. Xpeng’s July deliveries increased 4% from June and the company expects to improve the performance of its assisted driving technology later this year.

Context: China’s sales of new energy passenger vehicles increased 31% year-on-year but declined 5% month-on-month to roughly 722,000 units from July 1-28, according to figures released by the China Passenger Car Association. Increased promotions boosted sales in the April-June quarter, including some advance buying from customers looking to nab deep discounts, said the industry group.

NIO on July 26 gave updates on some of its most important technological developments, including the world’s first five-nanometer chip for automated driving, its in-house developed operating system for vehicles, and a voice assistant powered by its large language model.

Why it matters: NIO’s fullest disclosure yet of its technological roadmap reflects how the Chinese electric vehicle maker spends its research and development money, and how it has made a strategic bet on artificial intelligence, hoping to redesign all aspects of its vehicles including self-driving and the so-called digital cockpit.

Details: Speaking at the firm’s annual Tech Day event in Shanghai, NIO founder and chief executive William Li unveiled new details of what he called the world’s first five-nanometer (5nm) processor for autonomous driving, said to offer cameras with top-notch image signal processing (ISP) functions.

• The Shenji NX9031 system on chip (SoC) delivers high pixel throughputs of 6.25 Gigapixels per second, which NIO said makes it capable of capturing pictures with higher quality resolution in minimally lit environments, compared with flagship offerings from leading chipmakers.
• Li confirmed that the company had completed the tape-out for its self-designed autonomous driving semiconductor, which marks the end of the design phase and the beginning of production, without revealing which company has been contracted to produce it. 
• Meanwhile, NIO is on track to release its advanced driver assistance system, the Navigate on Pilot Plus (NOP+) 2.0, in the second half of the year. The Shanghai-headquartered EV maker is one of the Chinese players looking to harness the power of AI to provide cars with point-to-point navigation on Chinese highways, city streets, and parking spaces in a race led by Tesla.
• NIO also announced the launch of its proprietary operating system, the Sky OS, with which the company said it would have central control of all vehicle domains, allowing it to provide more advanced user experiences. An alternative to the open-sourced Linux OS and Blackberry’s QNX, the Sky OS forms the basis of the entire car all the way from vehicle control through to intelligent driving and infotainment, NIO said.
• This will enable a NIO vehicle to have a used battery pack exchanged for a new one fully automatically at one of the company’s nationwide recharging facilities, allowing the user to leave the car to get a coffee, according to vice president Wang Qiyan.
• The Chinese EV maker will also release its Banyan 3.0 in-car user interface through over-the-air updates in late August, featuring an enhanced version of its NOMI conversational assistant, powered by generative AI large language models (LLMs), for more human-like voice interactions. NIO owners will be able to request a chauffeur to drive them via voice commands, the company said.

Context: Only a few global chip powerhouses, such as Qualcomm and Ambarella, have announced the production of their chips using a 5nm process node with manufacturing partners such as Samsung. Tesla reportedly plans to produce its next-generation full self-driving (FSD) computer on 4/5nm processes with TSMC.

• NIO previously implied that its sophisticated chip could handle more than 1,000 trillion operations per second (TOPS), comparable to the combined total of four NVIDIA DRIVE Orin chips on 7nm, and is scheduled for mass delivery with the company’s ET9 executive sedan in early 2025.
• NIO’s research and development expenditures grew 23.9% annually to RMB 13.4 billion ($1.89 billion) last year. CEO Li told the event that the company has more than 11,000 R&D personnel, adding that its years-long efforts on in-house chip development will be “of great significance” to the industry of self-driving cars (our translation).

READ MORE: Chinese EV makers Nio, Xpeng, and Li Auto expand bets on self-produced chips: report

China- and US-based self-driving car startups Pony.ai and WeRide are ready for initial public offerings in the US, multiple media outlets have reported. The IPOs, which the firms have been eyeing for over two years, could happen as early as within the next two months.

Why it matters: Autonomous vehicle (AV) startups are generally facing pressure to lower their valuation targets as public stock markets have rapidly decelerated their interest in the space over the past few years.

• A group of 14 self-driving tech companies have seen their combined valuation decline more than 80% since their public debuts, according to an analysis by Crunchbase in 2022. Chinese car tech firm iMotion and lidar maker Robosense have lost roughly 75% and 90% in stock market valuation in the six months since their listings in Hong Kong.
• The potential listings of PonyAV.ai and WeRide, two of the highest-valued AV startups in China, will set the tone for many other companies trying to go public with their future-shaping technology, even as it takes longer than expected to become widely available.

Details: Fremont- and Guangzhou-based Pony.ai will go public as early as September, as some institutional investors have committed to purchasing shares in the looming IPO, financial media outlet Jiemian reported on Tuesday, without giving further details (in Chinese). WeRide is planning to sell its shares publicly in the US by the end of August, according to IFR, a Reuters publication.

• WeRide, with its China headquarters in the southern city of Guangzhou, last August received approval for an overseas listing from the China Securities Regulatory Commission, which requires applicants to complete the share sale within 12 months of the date of filing. Pony.ai gained a similar regulatory greenlight in April, Bloomberg reported. Pony.ai and WeRide declined to comment when contacted by TechNode on Thursday.

Context: Pony.ai reportedly suspended a public listing plan in New York at a target valuation of $12 billion in mid-2021 due to regulatory uncertainties. The Toyota-backed company said early the next year that it was valued at $8.5 billion after closing its first round of Series D financing, TechCrunch reported.

• WeRide, backed by the Renault-Nissan-Mitsubishi Alliance, filed confidentially for a US IPO aimed at raising as much as $500 million, Bloomberg reported last March. The company was valued at about $5.1 billion in a November 2022 fundraising round, according to its official website.
• Some other Chinese self-driving technology companies, including Horizon Robotics, Momenta, and Black Sesame, are rushing to sell shares publicly either in the US or Hong Kong as early investors are eager to earn money after incubating the companies for years, TechNode has learned.

Chinese electric vehicle maker Zeekr on July 19 introduced a new iteration of its 009 multi-purpose vehicle (MPV), including a new variant that significantly lowers the starting price of the luxury minivan and aims to capture a growing customer base of affluent Chinese families.

The refreshed 009 is the latest example of how Chinese automakers are attempting to build their luxury credentials and change the perception of premium cars both domestically and globally. The Geely-affiliated company expects to set “a new benchmark” for MPVs after the Toyota Alphard, it said. The revamped 009 boasts improved performance and range, as well as a number of intriguing features with Chinese characteristics, such as a series of in-car guided meditations.

“Chinese middle- to upper-class customers are replacing their large SUVs [sports utility vehicles] with MPVs that are becoming easier to maneuver and steer,” Jason Lin, a Zeekr vice president, said in an interview with TechNode (our translation). Like peers Xpeng Motors and Li Auto, New York-listed Zeekr sees big growth potential for the booming segment thanks to innovations in vehicle capabilities.

China’s MPV sales grew 16% to roughly 1.09 million last year and accounted for 5% of total passenger car sales, figures from the China Passenger Car Association (CPCA) showed. Jefferies forecast the segment to grow 20% year-on-year to 1.3 million units this year, of which 32% could be electric, up by 10% from last year. The Zeekr 009 competes with other all-electrics including the Xpeng X9 and Li Auto’s Mega, more popular plug-in hybrid models such as the Denza D9, and the gas-powered Toyota Alphard and General Motors’ GL8 Century.

An expanded lineup

The redesigned 009 comes to market with more variants in the hope of meeting a diverse range of customer needs, as both six- and seven-seat configurations are now available in different drivetrain and battery options with a price range of RMB 439,000-469,000 ($60,363-$64,488). The six-seat, dual-motor versions help to distance the revamped 009 from its predecessors, offering the fastest acceleration to 100km/h (62 mph) among MPVs – in 3.9 seconds – and a charging speed from 10% to 80% in as little as 11.5 minutes, making it suited for business travel.

And yet, Zeekr expects the new single-motor, seven-seat variants, with a center aisle to facilitate easy entry and exit from the van’s rear, to extend its reach to cover wealthy Chinese families, especially multi-generational households, at a more affordable price tag. Around 55% of existing 009 sales come from business clients, although private owners could ultimately provide a larger market, according to Lin.

While CATL’s Qilin battery enables the same charging speed as the higher-end variants, the new entry-level 009 has a longer driving range of 740 kilometers (460 miles) between charges. That range could be further improved to 900 km with a larger battery pack to ease consumer anxiety over charging infrastructure at an additional cost of RMB 50,000, although it takes 30 minutes for the battery to charge from 10% to 80%. It has a slower sprint time of 0 to 100 km/h in 7.9 seconds compared with its siblings, but is still comparable to the Toyota Alphard, which costs RMB 890,000 in China.

Chinese-oriented features

Although the remodeled Zeekr 009 claims to present a prestigious option for Chinese families using a range of high-quality interior materials and top-notch components, the company is also pushing hard to offer customized features with local characteristics to differentiate its vehicles from competitors. For instance, it offers a special chill mode with the car’s seats, lights, and music tailored to create an in-car environment for guided meditation, allowing owners to take a basic course with a series of video classes.

Other special modes include “Baby Sleeping”, for when younger family members take a nap, which automatically adjusts the air-conditioning and lights and turns down the volume of voice prompts. Some of the more traditional, upscale features that come standard with the car are air suspension that eliminates bumps for superior handling and ride quality, as well as Qualcomm’s latest-gen Snapdragon 8295 chips that enable the infotainment system with silky smooth transitions and fast responsiveness.

The all-new 009, set to be delivered on Monday, comes less than two years after the initial launch of Zeekr’s second model and follows an update in January, when two 2024 versions went on sale at a starting price of RMB 500,000. Zeekr is also selling the right-hand drive version of the luxury van in Hong Kong at HK$ 755,000 ($96,716) and aiming for delivery in the city in the fourth quarter of this year. The company launched a special Grand edition, targeting competition with the Rolls-Royce Cullinan in April.

Autotech startup Nullmax said on Tuesday that its latest generation of autonomous driving hardware and software package, allowing cars to navigate complex urban environments autonomously with features such as lane changing, will cost users as little as “several thousand RMB.” 

Why it matters: Shanghai and Fremont-based Nullmax is among the few players in the self-driving vehicle space claiming that cars will be able to function by themselves in urban scenarios without maps and lidar. Instead, the company said artificial intelligence models can be used to enable cars to navigate from points A to B.

• This makes its system even more cost-competitive on the Chinese market compared with Tesla’s Full Self-Driving (FSD) software, chief executive Xu Lei told reporters in Shanghai. Tesla has reportedly partnered with Baidu to leverage the latter’s lane-level navigation and standard definition mapping services, as part of its push to localize its most advanced driver-assistance software (ADAS) in the country.

Details: Xu told a press conference that his company is advocating a “pure vision” and “end-to-end” approach, as Tesla has been doing and many are following its lead, which involves deep neural networks, using cameras only to perform autonomous driving functions (our translation).

• The car could complete the highway on-ramp to off-ramp maneuver and drive through a construction zone in Chinese urban areas with affordable hardware of 7-11 cameras and a computing platform that can handle roughly 100 trillion operations per second (or TOPS), according to Nullmax.
• Xu expects some car models equipped with the technology to come to market in 2025, without saying more. Nullmax, with roughly 300 scientists and engineers, has been developing more safety-based ADAS functions for domestic automakers SAIC, and Chery, among others, TechNode has learned.
• Cars powered by Nullmax’s tech have traveled a combined 10 million kilometers (6.2 million miles). Xu added more actual driving data is required to provide cars with point-to-point navigation on city streets, while the company is training the ADAS system via simulation with AI-generated data.

Context: Chinese EV startups led by NIO, Xpeng Motors, and Li Auto have been ramping up efforts to transition from “rule-based” designs to an “end-to-end” autonomous driving method. Meanwhile, traditional car manufacturers are tapping into the power of AI by working with tech giants such as Huawei and NVIDIA, as well as startup unicorns like Horizon Robotics and Momenta.

• “What we see in the future is that the (AI-defined) AV stack will become an end-to-end model and will be trained in the cloud with massive data. More importantly, it will be validated in the cloud with simulation capabilities as well,” said Wu Xinzhou, NVIDIA’s vice president of automotive at its annual developer conference GTC in March.
• The US chipmaker in late 2021 released a system called “Omniverse Replicator” to facilitate the training of autonomous vehicles in the virtual world, Reuters reported. Chinese major EV makers, including BYD and NIO, are building their ADAS upon its DRIVE Orin computers, each of which offers 254 TOPS of performance.
• Nullmax was co-founded in 2016 by Xu Lei and Justin Song, both of whom spent time at Tesla. Xu worked on Tesla’s Autopilot computer vision team in 2015 and 2016, after leaving a senior engineering role at Qualcomm, while Song was responsible for engineering the Tesla Autopilot and car infotainment system from 2012 to 2015, according to their LinkedIn profiles.

READ MORE: Former Tesla engineer shares thoughts on end-to-end autonomous driving at WAIC 2024

Editor’s note: ‘Landing AI’ is a series of special reports focusing on the field of Artificial Intelligence curated by TechNode. By investigating the development of AI landing in China and the behind-the-scenes stories of the industry, we’re going to dive deeper into everything that’s possible under the new wave of AI.

The Chinese government on July 12 announced it had given Xiaomi a production license to independently assemble electric vehicles, meaning the smartphone maker has cleared the official hurdles required to scale up its production independently, without needing its traditional car manufacturer ally BAIC.

Why it matters: The green light from Chinese regulators will pave the way for a smooth production ramp-up for Xiaomi, which has raised its delivery target to 120,000 from 72,000 units for this year and hopes to reach a wider customer group with upcoming models.

Details: Xiaomi is now on the list of “all-electric passenger car manufacturers,” according to the registration filings released for public review by China’s Ministry of Industry and Information Technology (MIIT) on July 12 (our translation).

• Xiaomi also updated the filing for registration of its first consumer car, the SU7, to the country’s top industry regulator, with the model carrying the “Xiaomi” name on its rear, rather than “Beijing Xiaomi” as previously shown, the photos revealed by MIIT show.
• The popular sedan has always been manufactured at Xiaomi’s factory in the Beijing Economic and Technological Development Zone, but its production application had earlier been filed in the name of a subsidiary of state-owned automaker BAIC, TechNode reported.
• The company had been waiting for final approval from MIIT after getting the nod from China’s state planner to manufacture EVs, Reuters first reported last August, while reportedly looking for a partner to produce its second model. Its Beijing plant can turn out 150,000 cars a year.

Context: Xiaomi reached the 10,000-unit milestone in June, its third delivery month, bringing the year-to-date delivery volume of its answer to Tesla’s Model 3 to nearly 26,000 units.

• President Lu Weibing told investors in May that the company is aiming to deliver 120,000 cars this year. This is far higher than the firm’s original target of 72,000 units revealed by chief executive Lei Jun at Xiaomi’s annual investor day in April, CNBC reported.
• Priced from RMB 215,900 ($29,881) with styling similar to the Porsche Taycan, the all-electric Xiaomi SU7 has become a success in China, securing 88,898 pre-orders in the 24 hours following its launch on March 28. The company has since been under pressure to ensure timely delivery.
• The tech giant is also rushing to introduce its second car, an all-electric sports utility vehicle, in the first half of next year, while a third model is said (in Chinese) to be an extended-range hybrid (EREV) targeting Chinese families, and is scheduled for release in 2026.

READ MORE: “China’s Apple” Xiaomi takes aim at Tesla with debut EV launch, as millions watch online

Chinese automakers will over time become a dominant force worldwide despite the US and Europe imposing extra duties on their electric vehicles, consultants AlixPartners said on Wednesday, highlighting that China’s vehicle makers are on track to grab over 30% of the global market by 2030.

Chinese brands’ market share in Europe is unlikely to reach the previously anticipated percentage of 15% by 2030, as forecasted a year ago, instead doubling from 6% to 12%, but stronger growth is expected in other regions. Chinese brands could claim market shares 31% and 28% in Southeast Asia and Latin America respectively by the end of the decade, up from the 19% in each estimated last year, figures from the consultancy’s annual Global Automotive Outlook showed.

Many Chinese auto majors have pivoted their focus to overseas markets beyond the EU in recent months, taking advantage of fewer regulatory barriers in, for example, Southeast Asia and the Middle East. Geely subsidiary Zeekr plans to expand its footprint from 25 to more than 50 global markets by the end of this year, despite retaining “very big ambitions” for Europe, executives told investors last month. Great Wall Motor is shutting down its European headquarters in Munich, Germany, but says it still has plans to set up a factory in the region.

“Chinese automakers will definitely lose some competitive edge in EVs as they move to implement localized manufacturing and sales operations in Europe,” Stephen Dyer, a co-leader for AlixPartners’s Greater China business and head of its Asia automotive practice, told reporters on Wednesday in Shanghai. “However, they still have cost advantages over foreign competitors thanks to a shortened vehicle development time, a much lower labor cost, along with an intense corporate culture,” Dyer added, speaking in Mandarin Chinese (our translation).

An employee from a Chinese EV maker works as many as 140 hours in a month when a new car is launched, compared with only 20 hours worked by a counterpart at a global auto major, AlixPartners told clients in its latest outlook. Meanwhile, the average vehicle development time for a Chinese EV model has been cut in half to 20 months compared with legacy brands, mainly by reducing the number of physical tests and sending out software updates to fix problems.

The European Union’s additional tariffs on Chinese-made EVs are forcing Chinese majors to set up their own assembly operations on the continent. BYD on July 4 opened its first overseas passenger car factory in Thailand while planning to invest $1 billion in another one in Turkey and to establish a $30 million battery plant in Hungary. Chery in April reached a joint venture deal with Spain’s EV Motors to produce cars at a former Nissan plant in Barcelona later this year, Reuters reported. At least 12 new regional plants are being planned by Chinese car manufacturers, Dyer said.

“What we see is we’ve had a brand premium that is comparable to or even slightly more than global automakers in some overseas markets, such as Southeast Asia,” Wang Hui, a vice president of Changan Automobile, told this year’s China Auto Forum in Shanghai on Friday (our translation). The state-controlled automaker last October announced plans to build a $241.7 million plant in Rayong, Thailand, aiming to commence operations later this year with a capacity of 100,000 EVs annually. 

Wang added that Chinese firms should take a long-term mindset of “being humble and cautious” while making efforts to increase tax revenue and boost job growth for the local economies in where they operate.

READ MORE: EU anti-subsidy EV probe: What Chinese automakers have done in Europe and what’s next

A former Tesla engineer, now head of autonomous driving at China’s Chery, on July 4 shared her outlook on Chinese automakers’ future capacity to scale autonomous driving technology, as Tesla leads the way with its mass data and sophisticated artificial intelligence models.

Domestic companies are roughly 1.5 to 2 years behind Tesla in developing “end-to-end neural network” technology for autonomous driving. The recent release of Tesla’s Full Self-Driving (FSD) software v12 marked “a great leap forward” in applicability and user experience (our translation) according to Gu Junli, chief executive of Chery-affiliated ZDrive.ai, and a former senior staff machine learning engineer at Tesla, speaking at this year’s World Artificial Intelligence Conference (WAIC) in Shanghai.

Gu said she expects Chinese players to partially replace modules of advanced driver assistance systems (ADAS) with data-driven, rather than rule-based, neural networks by 2025. This shift comes as car companies ramp up efforts to collect fresh, multiformat data to improve models with more computing power. However, there would not be a single large neural net, where the core capability of Tesla’s latest software is built, for production cars until 2026-2027 in China, Gu added. Tesla in April announced its FSD users had traveled a cumulative 1.2 billion miles.

Recent figures from the community-run FSD Community tracker show Tesla’s remarkable progress in refining its autonomous driving features. The latest FSD v12.3.6 version can drive 372 miles (599 kilometers) between critical disengagements, compared with just a few miles it reportedly achieved two years ago, according to crowdsourced data released by the website in May. Tesla chief executive Elon Musk later forecasted on X “a major improvement in MPI (miles per intervention)” with the release of the FSD v12.5 in late June.

“This means the system has met the requirements for most users on normal daily commutes,” said Gu.

Several Chinese early movers are working to achieve a partial end-to-end pipeline for enabling their advanced driving features, hoping to gradually transition to fully end-to-end algorithms. On July 5, Li Auto revealed details about what it called “China’s first single one model” behind its Navigation on ADAS (NOA) functions. The Chinese electric vehicle startup claimed this model would use raw sensor input to generate vehicle motion plans. However, unlike Tesla’s solution of “basically photons in and controls out,” as described by Musk, it still relies on pre-defined, explicitly coded rules to produce control actions as output.

Meanwhile, other peers, such as Xpeng Motors and Huawei, have been taking partial end-to-end approaches, using separate neural networks for multiple tasks such as perception, planning, and action, while many are still struggling to improve results. According to a recent survey compiled by China’s Gaogong Industry Institute, Chinese users typically take the controls at least 1-2 times per 100 kilometers (62 miles) as their cars’ ADAS functions do not react appropriately in urban scenarios. Tesla may find issues in localizing its ADAS software due to China’s complicated traffic conditions, said Xpeng’s head of autonomous driving, TechNode reported.

Gu mentioned Chery’s plan to launch the advanced city NOA function for some premium models in the first quarter of next year, while its single deep learning network could go live in 2026. The Chinese auto major, which sold nearly 1.9 million cars last year, plans to integrate Level 2 ADAS systems into as many as 500,000 new cars sold this year, including 150,000 units for overseas markets. Based in the eastern Chinese city of Wuhu, Chery had a relatively late start in autonomous driving, with ZDrive.ai being set up early last year.  

Despite Tesla’s leading position with its training wheels finally taken off, Gu envisioned that Chinese companies would contribute to a wider and more personalized adoption of self-driving technology worldwide. State-owned Chery in April reached a joint venture deal with Spain’s EV Motors to produce cars at a former Nissan plant in Barcelona later this year, Reuters reported. Meanwhile, customers from some overseas markets could access Xpeng’s XNGP ADAS capabilities as early as next year, president Brian Gu told investors during an earnings call in May.

READ MORE: Chinese companies take on Tesla’s Full Self-Driving with non-lidar approach, end-to-end AI

Chinese carmakers Geely, NIO, and Huawei-backed Aito on Monday reported record deliveries of electric vehicles for June as the country’s EV segment recovery gathers momentum. Meanwhile, Huawei and Li Auto are emerging as the leaders among the newer players, despite BYD and Tesla still enjoying a near-duopoly position in the world’s largest EV market.

Why it matters: The rally, which contrasts with overall flat sales in the market, comes amid a temporary cooling-off period for the industry-wide price war on electric autos in the country. It also reflects companies’ sprints to make deliveries by the end of the first half of 2024. A new wave of consolidation and some reshuffling is also speeding up within the sector, with fewer smaller players staying in the game and some legacy giants falling behind.

Details: Li Auto topped the ranking among young EV makers by delivering 47,774 cars to customers in June, up 36.4% from a month earlier, as sales of its most affordable extended-range hybrid crossover the L6 started to ramp up after its April launch. Chief executive Li Xiang also attributed the sales recovery to improved efficiency, as the company restructured its sales and delivery teams recently following a failed launch of its first all-electric model, the Mega, in March.

• Huawei continues to put pressure on Li Auto despite delivering 1,633 fewer vehicles than the Nasdaq-listed EV startup in June. The Chinese technology giant said its Harmony Intelligent Mobility Alliance (HIMA), which for now includes Aito and Luxeed brands only, delivered 194,207 vehicles from January to June, which is more than the 188,981 units posted by Li Auto. Huawei will launch a new premium brand called Stelato with partner BAIC next month after it began taking orders for the first model, the S9, on May 31.
• Among traditional competitors, Geely set a new record for EV sales of 65,959 units in June. In particular, deliveries of its mainstream luxury brand Zeekr surpassed the threshold of 20,000 units for the first time since its inception. Geely management on Tuesday announced it was raising this year’s sales goal by 5% to 2 million units, while Zeekr’s annual outlook of selling 230,000 units remains on track. Lynk & Co sold 24,439 cars last month, 62% of which were EVs, a record high percentage for the Geely-Volvo joint brand.
• Changan’s EV sales rose 61% year-on-year and 14.7% month-on-month last month to roughly ​​64,000 units, of which 16,659 were Deepal-branded EVs. The automaker said it received more than 15,000 refundable orders for its first off-road sports utility vehicle, the Deepal G318, priced from RMB 175,900 ($24,186), five days after it was launched on June 13. Chery’s EV sales surged 181.5% to 180,947 units during the first half of this year, thanks to strong overseas demand for its budget cars, such as the QQ Ice Cream and Little Ant.
• Both NIO and Leapmotor reached the 20,000-unit milestone in June. NIO has sustained the growth momentum that it’s seen since April and is demonstrating the potential to deliver 30,000 cars a month once its first mainstream car goes on sale in September. Leapmotor reached the milestone for the first time last month, as the Hong Kong-listed firm now positions itself as a cheaper alternative to Li Auto. Smartphone giant Xiaomi handed over more than 10,000 SU7 sedans to customers in its third delivery month.
• Meanwhile, Tesla is feeling the heat. Sales of its China-made vehicles declined 10.5% year-on-year to 426,623 units during the first half of this year, including exports, according to figures released by the China Passenger Car Association (CPCA). The US automaker said on Tuesday it delivered 443,956 vehicles in the three months to June 30, a smaller-than-expected 5% drop from a year earlier and up 14.8% from the previous quarter, sending shares up more than 10%, Reuters reported.

Context: China’s retail passenger EV sales volume is expected to reach 864,000 units in June, representing a 30% growth from the same month last year and a 6% rise from May, while overall car sales declined 8% year-on-year, the CPCA estimated on Wednesday.

READ MORE: China’s EV sales recovery picks up pace in May, helped by promotions

As Tesla’s most advanced driver assistance software (ADAS) is becoming an immediate threat due to its impending arrival in China, major Chinese electric vehicle makers and auto tech companies are hurrying to pivot their strategies towards a more pragmatic yet challenging approach to developing similar offerings. Although Tesla’s rivals have for years been looking to cut out expensive components and master the newest artificial intelligence models, the game seems to be different this time.

Both NIO and Xpeng Motors are now embracing the so-called computer vision approach, championed by Tesla, hoping their upcoming models will achieve human-like downtown driving in cities via the use of fitted cameras and radar, rather than more expensive laser sensor units. Sinpro.ai, a supplier to NIO of ultra-high-resolution four-dimensional (4D) imaging radar, said it is prepared for delivery later this year with an annual capacity of 800,000 units. Tesla has reportedly replaced radar sensors on some models after years of attempting to remove them.

“It will be a difficult task for Tesla’s Full Self-Driving (FSD) software to deal with scenarios in China where it is common that a large number of electric scooters are usually ahead in the same lane with motor vehicles,” Li Liyun, vice president of autonomous driving at Xpeng, wrote on June 27 on Chinese Twitter-like microblogging platform Weibo. Xpeng is planning to remove lidar from its upcoming sedan, scheduled for launch later this year, local media has reported.

Xpeng and NIO are also following Tesla’s suit by transitioning to an “end-to-end” autonomous driving method after using modular-based neural networks that are heavily reliant on explicit coding. Meanwhile, more traditional automakers are turning to domestic tech companies for help, such as Huawei and DJI, to catch up with the latest AI trend. Despite big challenges pressuring the industry, some early movers have the potential to compete with the US pioneer, Liu Guanghao, partner at Shanghai-based venture capital firm Befor Capital, told TechNode.

READ MORE: China opens door wider to Tesla as local giants disrupt the EV sector with AI-defined vehicles

Vision-based approach

A break from previous strategies of using expensive chips and sensors to enable ADAS capabilities, the latest approach centers on reducing the cost of components in hopes of making more room for further price cuts. Many now have their eyes on the use of radar, ditched by Tesla in 2021 due to limitations in identifying stationary objects with low image resolution, as some parts makers now said it is coming close to lidar in terms of performance – but at a lower price tag.

“There is more overlap between lidar and our sixth-generation radar systems as we significantly improve the resolution,” Juergen Brandl, Head of Market China, Business Area Autonomous Mobility at Continental Group, told TechNode. “Radar could soon see through [objects] but lidar has some problems with the distance especially in difficult situations like fog and rain.” The German firm’s newest front-facing radar boasts a detection distance of 280 and 140 meters (174 and 87 miles) for vehicles and slow-walking pedestrians, respectively.

Advanced radar solutions like this also create three-dimensional point cloud datasets like lidars, helping automakers and developers move towards fully end-to-end models with raw data collection from multiple sensors to train their self-driving systems. “We can play a big role in the development of Level 2 plus ADAS systems in China,” Brandl said, adding that the company’s product is below the price of a lidar unit with “very good“ output in terms of point cloud data.

Some disagree however, saying the technology is still at an early stage. Production of Continental’s latest-gen radar started early this year and the company began delivering the world’s first 4D radar in 2021, which detects an object’s vertical information in addition to distance, direction, and relative velocity, generating more dense point clouds than a contentional radar. Meanwhile, major Chinese lidar makers have consistently enhanced the performance of their products and lowered the prices to just over RMB 1,000 ($137.6) per unit in recent years.

The key is whether 3D/4D radar could prove to be a more “cost competitive” option compared with lidar, said Liu. “I believe both [radar and lidar] have their special advantages and disadvantages,” Brandl said. ”I think time or the market will tell whether we need both of them or one solution only.”

Either way, prospects for early players are bright. Momenta, a self-driving car company backed by General Motors and Toyota, expects the bill of materials, or total cost of components, for the City NOA (Navigation on ADAS) function to be slashed to RMB 4,000-5,000 from the current RMB 7,000-10,000 in the next two years. The intent is to survive an unprecedented price war in China that has been ongoing for more than a year.

End-to-end AI

Chinese carmakers used to brag about their coverage of cities where their assisted driving software is said to enable cars to handle on-ramp to off-ramp driving, automatic highway lane changing, and congested streets. However, many are now pivoting their focus to provide a more human-like driving experience and a full end-to-end AI model is now seen as key to winning the battle.

Described by Tesla chief executive Elon Musk as “basically photons in and controls out,” such end-to-end neural networks play an integral role in a vehicle’s decision-making process, taking raw sensor data as input and producing control actions as output. This contrasts with the conventional approaches that see each functionality, from perception to planning and action, developed individually using rule-based designs, which are often inadequate  in addressing the vast number of scenarios that occur on the road, a team of researchers said in a recent report.

The result is that people still feel their cars pilot themselves inhumanly even when kitted out with some of the most cutting-edge ADAS on the market, partly because human driving behavior tends to be consistent rather than discrete. It is very difficult for the current AV (autonomous vehicle) stack to make coherent, long-term decisions, said Wu Xinzhou, Nvidia’s vice president of automotive at its annual developer conference GTC in March.

Recent surveys have shown automakers that customers are generally dissatisfied with existing ADAS functions. Nearly half of respondents take the controls 1-2 times per 100 kilometers (62 miles) as the city NOA functions do not react appropriately, while others make more frequent interventions, according to a recent survey compiled by China’s Gaogong Industry Institute. “When the driver has to interfere pretty often, then you cannot say this is autonomous driving,” said Brandl.

Xpeng is aiming for less than one intervention per 1,000 kilometers in major traffic areas in China, CEO He Xiaopeng announced early this year, without giving a timeframe. This was followed by a new software update for its XNGP ADAS in May enhanced by the first end-to-end AI model for production vehicles in China, according to the EV maker. NIO reshuffled its autonomous driving department recently, rolling up its perception as well as planning and control teams into a single group with a focus on new AI models, Chinese media outlet LatePost reported on June 19.

It requires huge amounts of data, for example, millions of video clips, to train AI systems, as well as deep pockets and access to AI chips. Musk told investors in April that his company will increase the number of Nvidia’s flagship AI processors it uses from 35,000 to 85,000 by the end of this year. He wrote in a post on X earlier that month that the investment in training computers, gigantic data pipelines, and video storage will be well over $10 billion cumulatively this year.

Such major investment and effort is not something all companies can handle however. “It would be so hard for most traditional automakers to do this by themselves. The best way is to pick a supplier,” Liu said.

The entry of Tesla’s FSD into China may feel like a new challenge therefore, but it may also coincide with a new era of partnerships around self-driving technologies.

China’s Great Wall Motor is poised for its big entry into Southeast Asia, as the automaker said on Monday it would begin manufacturing its cars in Malaysia and Indonesia as early as July, in addition to its planned entry into Vietnam, local media reported.

Why it matters: The news comes as Malaysia surpassed Thailand to become the second biggest car market in the region after Indonesia in the first three months of this year, according to sales figures released by industry groups and compiled by Nikkei. This makes it another attractive market for Chinese car manufacturers given its growing economy and large population.

• Total vehicle sales increased 5% year-on-year to 202,245 units in Malaysia from January to March, in part driven by the government’s economic stimulus package, figures from the Malaysian Automotive Association show. Meanwhile, Thailand’s car sales, including internal combustion engine cars and EVs, fell 24.6% to 163,756 units from a year earlier, partly because of tightening rules around car loans, said the Federation of Thai Industries.

Details: Great Wall Motor will start operating a pure assembly plant with Malaysia’s EP Manufacturing in Malacca in July at the earliest, Cheng Jinkui, president of the company’s ASEAN operations, told the Business Times.

• The two companies said in January they would commence assembly of two of Great Wall Motor’s popular Haval models – the Haval H6, a five-seater sports utility vehicle, and the Haval Jolion, a compact crossover. The cars will be made from “completely-knocked-down (CKD)” kits comprising major parts with the goal of producing 20,000 units a year by 2028.
• Another CKD facility in Indonesia is also set to come into production in July or August, while the Chinese automaker is aiming for local assembly in Vietnam in 2025, according to Cheng. Great Wall Motor said last June that it was exporting the Haval H6 hybrid EVs to Vietnam from Thailand, where it operates a car plant it acquired from General Motors in September 2020.

Context: Chinese automakers are ramping up their investments in emerging EV markets overseas, especially in regions such as Southeast Asia, the Middle East, and Latin America, at a time when competition remains intense at home and the US and Europe are imposing punitive tariffs on China-made EV imports.

• Geely and Malaysian automaker DRB Hicom last year reached a $10 billion deal that will transform the country’s Tanjung Malim area into an “automotive high-tech valley” with an annual production capacity of 500,000 vehicles by 2035, China Daily reported. Sales of Geely-backed local automaker Proton more than doubled to roughly 154,000 units last year, while Smart, a brand co-owned by Geely and Mercedes Benz, began exporting cars to Malaysia last year.
• Indonesia said four Chinese automakers, namely Chery, Neta, General Motors’ China joint venture Wuling, and Dongfeng’s Sokon, have agreed to expand their global manufacturing footprints to the country. The deals were announced when Indonesian Industry Minister Agus Gumiwang Kartasasmita visited Beijing earlier this month, Caixin Global reported. Neta, also known as Hozon Auto, shipped 16,458 EVs overseas from January to May, more than a third of its total deliveries.
• China recorded exports of roughly 519,000 new energy vehicles, mainly all-electrics and plug-in hybrids, for the first five months of this year, representing a 13.7% growth from last year, according to figures from the China Association of Automobile Manufacturers (CAAM). BYD and Tesla were the largest exporters, with shipments of more than 130,000 units. Great Wall Motor exported 9,646 units but said last month it would shut down its European headquarters in Munich, Germany.

Chinese automaker Dongfeng Motor will introduce the first global model from its premium electric vehicle brand Voyah as early as the third quarter of this year, in what will be a direct challenge to Tesla’s best-selling crossover the Model Y, local media has reported.

The 100% electric compact sports utility vehicle (SUV) will feature Huawei’s vision-based approach to automated driving functions on urban streets. It will also be produced in a joint plant set up with Nissan, as fierce competition has put downward pressure on the Japanese firm, a regulatory filing has shown.

Why it matters: Stellantis and Nissan’s Chinese manufacturing partner expects the model to appeal to young families and drive sales in the country’s already crowded mainstream luxury EV segment, company sources told National Business Daily (in Chinese) on Tuesday.

Details: Sources added only full-electric variants will be on offer for the Zhiyin (知音), which loosely translates as “bosom buddies” in Chinese. This is in line with a filing that was published last month by China’s top industry regulator, which shows the car has six variants with battery options using two types of cathodes – more energy-dense nickel cobalt manganese (NCM) and cheaper lithium iron phosphate (LFP).

• The five-seater SUV measures 4.7 meters in length and 1.6 meters in height with a wheelbase of 2.9 meters, according to the registration filings released by China’s Ministry of Industry and Information Technology (MIIT). This is roughly the same size as the Tesla Model Y and smaller than the first model under the Voyah brand, the Free SUV.
• The all-wheel drive version will have a dual electric motor setup with both motors providing a power output of 160 kW, while other variants will be offered with either a 215 kW or 230 kW electric motor. All the variants have no lidar components, which are normally packaged on the car roof or near the bumpers to help the vehicle sense and interpret its surroundings.
• This means the new car will utilize the so-called “pure vision” approach, a strategy championed by Tesla, relying on cameras and artificial intelligence, rather than the more visible but more expensive laser sensor units, to achieve automated driving. Voyah announced in April at this year’s Beijing Auto Show its first global model would feature Huawei’s intelligent driving software and operating system HarmonyOS.
• Dongfeng will manufacture the car at its latest joint plant with Nissan, which opened last year in the central Chinese city of Wuhan with an annual capacity of 300,000 units. Nissan has been making several electric models including the Ariya with Dongfeng at this plant to date, although it sold less than 2,000 units of its second EV-only model in the country over the past six months, figures compiled by auto service platform Dongchedi showed.

Context: Nissan’s China joint venture with state-owned Dongfeng reported sales of 723,139 cars in the country last year, representing a 21.5% plunge from a year ago. The companies last November announced plans to export vehicles from China in 2025. The Japanese carmaker was also reportedly considering a 30% cut of its annual car output in China, along with peer Honda.

• Dongfeng’s Voyah in January announced a collaboration with Huawei to develop smart EVs. The brand has three models on sale and delivered 24,869 EVs, including all-electrics and plug-in hybrids, from January to May. The automaker’s off-road vehicle lineup Mengshi also works with Huawei.

The European Union announced on Wednesday it has taken a case-by-case approach to deciding how much tariffs could increase on Chinese electric vehicles. In a move that surprised many industry professionals, the preliminary duties set to hit Chinese EV imports will rise from the general 10% basis on all of them to between 27% and 48%, with SAIC and those deemed incompliant with EU standards facing the hardest hit. The tariff hikes are relatively moderate for the likes of BYD and Geely, which have either committed to growing deep roots within the EU or have already done so in the past.

Broadly speaking, the additional duties are still in line with what many analysts had expected, despite the possibility of a massive but temporary plunge in China’s EV exports to Europe. Chinese battery EVs are priced in general around 80-100% higher in Europe than in their domestic market, creating room for price adjustments, said Jefferies analysts led by Johnson Wan. There could be very limited benefit for major European players, as the high-volume EV segment would remain intensely competitive with subdued margins, said Patrick Hummel, Head of European Autos Research at UBS.

Although Bernstein analysts expect the provisional tariffs to be a serious turn-off to smaller Chinese brands, prompting them to focus on other export markets, bigger Chinese players are likely to step up their localization efforts. Paul Gong, UBS’s head of China Autos Research, also wrote in a note to clients, “Localization of production may become an increasingly appealing option over longer run compared to direct shipping from China for exporters to take shelter from trade conflicts and geopolitical tensions.”

Below, we take a look at what the key Chinese players have been doing in Europe and their respective prospects in a continent home to some of the world’s most important automakers.

BYD

China’s top EV maker is widely considered the least affected by the newly announced tariffs, with the strength to still break even on an import model thanks to its significant cost advantage versus peers. BYD’s EVs would still be priced lower than the similar models launched by European rivals, even if the company raises prices by 17.4% to fully pass on the additional tariff to customers, although the measure could effectively prevent its dominance in destination markets.

The leading Chinese player would also have a 25% cost advantage over European counterparts even after localizing the production of its popular sedan in the region, according to UBS’s previous findings. Set to be the first major Chinese automaker with a production base in Europe, BYD expects its Hungary plant to begin operation before 2026, with an annual capacity of 150,000 units. Although exports to Europe only account for a single digit percentage of its total sales, it aims to “be in a leading position” in the regional market by 2030.

SAIC

China’s biggest car manufacturer got relatively unfavorable treatment, and analysts expect the measures will significantly curb its competitiveness in Europe. The European Commission will impose tariffs of nearly 50% on EVs from the Chinese state-owned automaker, along with those deemed to be the least compliant with the nine-month anti-subsidy investigation announced last September. The company, which owns the iconic MG brand of British origin, said earlier it had “fully cooperated” with the investigation and hinted that the EU regulators misused their investigative powers in order to view sensitive business information related to its supply chain.

SAIC responded on Thursday by saying, “As SAIC MG’s sales in Europe continue to grow, we are planning to introduce China’s new energy vehicle (NEV) technologies and green factories to the continent” (our translation). The firm also called for more cooperation between China and the EU. China’s top car exporter to Europe, with shipments of nearly 243,000 units to the region last year, revealed plans last July to build a manufacturing facility plant on the continent.

Geely, Chery, and Dongfeng

Volvo parent Geely was among the three Chinese companies selected for further scrutiny and saw a relatively moderate tariff increase of 20%, another individually calculated duty rate. The impact is likely to be very marginal to China’s third biggest car exporter, thanks to its ownership of Volvo and the currently limited scale of its own brands in the region. Geely’s EV brand Zeekr said on Tuesday it is looking to establish a presence in six to eight European countries by year-end.

Chery, as well as its state-controlled peers such as Dongfeng and Chang’an, faces an extra 21% charge in a category for those cooperating with the probe but not sampled. Jaguar Land Rover’s Chinese manufacturing partner in April reached a joint venture deal with Spain’s EV Motors to produce cars at a former Nissan plant in Barcelona later this year, Reuters reported previously. Meanwhile, Dongfeng’s Voyah brand, previously planning to enter Germany, France, and Italy, has for now been selling EVs mainly in Nordic countries.

NIO, Xpeng Motors, and Leapmotor

Like their bigger peers, Chinese EV makers NIO, Xpeng Motors, and Leapmotor are also set for extra charges of 21%. NIO, which currently sells four models from more than €60,000 ($64,361) in Europe, higher than most domestic competitors, said on Wednesday its commitment to the regional market remains unwavering and it will continue to explore new opportunities within the EU despite protectionism.

The company is still looking to introduce its lower-priced vehicles, including an upcoming third brand codenamed Firefly, in Europe, but the plan is now being adjusted based on the current situation. Delivery of the first model, a well-designed boutique car, will begin in the first half of 2025 in China at a price cheaper than the BMW Mini, CEO William Li recently told investors during an earnings call.

Zhejiang-based Leapmotor, which has Stellantis as its largest shareholder, is also making pivots. Chief executive Carlos Tavares said on Thursday the European auto giant will shift the output of some Leapmotor products to Europe due to the tariff hikes, having reportedly explored the potential of building EVs jointly in Italy. A similar scenario could unfold for Xpeng Motors and its European ally Volkswagen. President Brian Gu last September revealed plans to enter Germany, Britain, and France, with Italy also being included earlier this year.

Li Auto is on track to offer its new level 3 automated driving system within the next 12 months, which would enable hands-free, eyes-off driving under certain conditions, as it transitions towards “end-to-end neural network” architecture, according to chief executive Li Xiang.

Why it matters: The comments mark an increase in competition between Tesla and Chinese automakers over the adoption of autonomous driving. The US automaker is reportedly looking to roll out the latest version of its “Full Self-driving-Driving” software in China, its second-largest market.

• The news also comes as Li Auto started calling back some former staff late last month having previously dismissed roughly 30% of its 1,100-person Autonomous Driving Group in a setback to the company’s launch of its first battery electric model, the Mega. 
• Most employees rehired by the electric vehicle maker work on the NOA (Navigation on ADAS — advanced driver assistance system) function for urban driving scenarios. Vice President Lang Xianpeng on June 7 promised surviving employees from his team that the layoff was now over, sources familiar with the matter told the 21st Century Business Herald (in Chinese).

READ MORE: China opens door wider to Tesla as local giants disrupt the EV sector with AI-defined vehicles

Details: Li Auto will roll out a new version of its NOA software in the third quarter of 2024. This version still requires the driver to be in full control but will not rely on a high-definition map. The company announced that it will launch its city NOA function to users in 100 major Chinese cities in November.

• This will be followed by a wide release of its Level 3 autonomous driving system later this year, or in early 2025, Li told the audience at the China Auto Chongqing Summit on June 8, according to short videos posted on the social media platform WeChat.
• Li said the company has been working on an end-to-end artificial intelligence approach since late 2023. The approach is using video clips from real driving situations as well as machine learning algorithms to handle the vehicles’ control. It is also exploring Visual-Language Models (VLMs), which could better learn patterns and correlate between visual data and natural language than existing offerings.
• Li Auto’s L3 conditional autonomous system will use both approaches, Li said, allowing the human driver not to monitor the vehicle constantly but to be ready to take control, according to the definitions set by the Society of Automotive Engineers (SAE). It could further evolve to a level 4 highly autonomous driving system over the next three years, Li added, without elaborating further.

Context: Automakers in China, including Li Auto, have either been applying for mapping licenses or working with map services in order to collect large amounts of highly detailed geographical data, which helps autonomous vehicles (AVs) make better decisions when performing driving tasks. However, many of them, such as Huawei and Xpeng Motors, are now looking for alternatives due to cost and complexity reasons.

• It is unknown whether Li Auto will take legal responsibility for its upcoming level 3 technology. Last year, Mercedes-Benz became the first automaker allowed to sell cars with its L3 Drive Pilot system in California and Nevada, Reuters reported. China is pushing for similar regulatory initiatives with assistance from automakers including BYD, SAIC, and NIO.
• Li Auto has been working on layoffs since May to cut 18% of the company’s workforce, which stood at roughly 5,600 as of last year, while that percentage for the Autonomous Driving Group was more than 30%, according to the 21st Century report. President Ma Donghui told investors in November the company planned to have 2,000 employees for AVs by the end of 2024. 

READ MORE: Li Auto accelerates assisted driving tech competition amid launch of first battery EV

China’s major southern city of Guangzhou unveiled its action plan on May 31 to boost the development of the so-called “low-altitude economy,” vowing to become China’s first city to commercialize aircraft for passenger transport in low-altitude airspace over the next three years, and it is not alone. Nearly 30 Chinese major city and provincial governments have brought similar initiatives into their work plans for this year as of writing, according to public records.

Chinese regional authorities are responding to Beijing’s call to establish a number of strategic emerging industries as some traditional economic pillars of the country are in recession. Beijing also wants to replicate its success story of electric vehicles from land to sky, as part of its ambition to become a global leader in technological innovations. Among various aircraft from drones to traditional helicopters, flying cars are likely to be a bright spot, and southern China could offer what it takes for that to happen, industry experts said.

What is a low-altitude economy?

Although there is no official definition of what constitutes a “low-altitude economy,” it usually refers to various businesses centered around civil-manned and unmanned aerial vehicles below 3,000 meters in altitude, including manufacturing, flight operations, and services for agriculture, logistics, and tourism.

The idea was first mooted by China’s State Council with an outline for establishing “a national comprehensive transportation network” back in February 2021 and was later listed as one of the strategic emerging industries at the central economic work conference in December.

Compared with China’s traditional general aviation sector, which includes military and commercial flights, a low-altitude economy is characterized by the elements of vertical take-off and landing, green energies, and intelligent piloting, said Burt Guo, CEO of Aerofugia Technology, a subsidiary of Geely.

“EVs in the air”

Electric vertical takeoff and landing aircraft (eVTOL), also known as flying cars, are considered the most promising application, garnering particular attention from investors and entrepreneurs, due to their potential for both passenger and cargo delivery at a presumably lower cost than helicopters. That is not the only reason, though. China is looking to leverage the capabilities that already exist within its EV industry, from supply chain to charging infrastructure, bringing the global competition for emerging technologies from the ground into the air.

“So is it almost like EVs in the air?” “Yes, you get the point,” Guo said when asked by Zheng Junfeng, an anchor of Chinese state television news services CGTN, at the recent BEYOND EXPO 2024 tech event last month in Macao. Guo added that eVTOL could share around 70%-80% of the materials and components with EVs, with the rest being sourced from the suppliers for traditional aircraft, while there is always room for collaboration with its parent company in fields such as manufacturing and charging.

“It’s kind of an ecosystem for new energy transportation,” Guo said. Geely led a €50 million ($55 million) funding round into Volocopter in 2019 and the German air taxi startup set up a joint venture with Aerofugia two years later.

It also represents a more cost-effective solution for urban transportation compared with subways and bypasses. Each parking garage and building rooftop in the city could be “ideal” for flying vehicles to park and refuel, according to Jian Dan, executive vice general manager of Civil Aviation Investment Fund, led by the parent of Beijing International Airport Co Ltd (our translation). “It is totally different from helicopters,” Guo echoed, saying the landing space would be “considerably smaller” than what a traditional helicopter uses.

Although consulting firm McKinsey in 2020 estimated it would cost $200,000-$400,000 to build a takeoff and landing area along with two spots for parking or vehicle maintenance, Jian believed the smallest location of such kind could be as cheap as “several thousand RMB.” Guo said a flying car would cost 30% of a helicopter, even as the technology is still in the early stages, and in the end, the cost of a trip by eVTOL could plunge to roughly two to three times that of a taxi.

Still a distant future

Although the industry is growing at a faster pace, it could take at least three to five years before flying vehicles get commercialized, mainly because most players are still navigating technological challenges and regulatory hurdles, experts said. The International Air Transport Association (IATA) expects 5% carbon emission reductions globally by 2030 through the use of sustainable aviation fuels, innovative new propulsion technologies, and other efficiency improvements.

Electric planes are definitely the future of aviation, but the technology is not ready yet, and the battery is one of the key issues, Zhou Lisha, CEO of Chinese battery startup Montavista, told the audience at the BEYOND EXPO 2024. “Companies have to prove every inch of their aircraft is safe, and one of the tests is to make sure the batteries won’t catch fire, because you can’t stop or pull to the side of the road when something goes wrong,” said Zhou.

For that reason, governments are implementing highly stringent rules and safety standards for electric and autonomous aircraft. China has set a goal for businesses to mass produce lithium-ion batteries that meet aviation safety standards with an energy density of 400 watt-hours per kilogram (Wh/kg), as part of a development plan through 2035 released by four top government bodies late last year. For comparison, CATL’s latest Qilin battery reportedly has an energy density of 255 Wh/kg.

Operating air taxis in low-altitude urban airspace may also encounter many conflicts with high-rise buildings within a volatile electromagnetic environment. There has to be new telecommunication infrastructure facilities and a new air traffic control system to support the operation of those unmanned aircraft, according to Jian. “It is definitely not feasible for those machines to communicate with air traffic control via radio,” Jian said at this year’s BEYOND EXPO.

Guangdong: a major staging ground

The Chinese government is jumping in to offer some help. Guangzhou said it will keep “close connections” with eVTOL makers and provide “necessary assistance” to them, when it comes to issues related to research and development, and airworthiness certification, among others. The capital city of southern Guangdong province also plans to build at least five eVTOL airport terminals, known as vertiports, as well as 100 takeoff and landing spots by 2027.

Headquartered in Guangzhou, US-listed Ehang said in October it received an airworthiness “type certificate” from the Civil Aviation Administration of China, CNBC reported, while Xpeng AeroHT, an affiliate of local EV maker Xpeng Motors, followed suit by submitting its application in March. AutoFlight, another Shanghai-based startup, reportedly hit a milestone early this year when its five-seater Prosperity aircraft completed a low-altitude flight between the southern cities of Shenzhen and Zhuhai in the Guangdong province.

Guo expects the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) to be the first region in the country where its flying vehicles will be available. “If you take a taxi from here (Macao) to Shenzhen it takes one to two hours. That will be only around 15 minutes if you use a flying vehicle,” Guo said.

READ MORE: Beyond Expo | Self-flying cars are closer to being realized than self-driving cars: Geely executive

Major Chinese automakers reported higher electric vehicle sales for May than in April, boosted by new government subsidies and the continued use of discounts to lure cost-conscious shoppers. Notably, NIO and Geely’s Zeekr were among the top-performing companies in the market, reporting their best-ever monthly deliveries.

Why it matters: The latest sales figures marked a swift turnaround for Chinese auto majors as they have been mostly grappling with weak consumer sentiment and intensifying competition in recent months.

• Demand was mainly boosted by China’s new subsidies encouraging consumers to trade in their old, less eco-friendly vehicles for new more energy-efficient ones. Meanwhile, several regional trade events have garnered more consumer attention than usual and boosted the appetite for new models, such as the recent Beijing Auto Show, wrote the China Passenger Car Association (CPCA) on May 29.

Details: Both NIO and Zeekr witnessed triple-digit growth year-on-year in May, with monthly deliveries reaching a record high.

• NIO said on June 1 that it surpassed the 20,000 vehicle sales limit last month for the second time since its inception, with its delivery numbers up 31.5% from April. The growth was driven by additional cash rebates totaling RMB 1 billion ($138 million), offered by the company in the name of car trade-ins since April 1, as well as a more than 25% price cut on its battery leasing program in March.
• Zeekr’s May deliveries reached 18,616, up 16% in a month, thanks to strong demand for its redesigned 001 shooting brake, of which sales surpassed 10,000 units for two months since delivery began on March 1. The Geely affiliate on May 10 became the fourth Chinese EV maker to go public in the US. Sales at its parent company also picked up momentum to 58,673 units over the month.
• Meanwhile, Li Auto saw its best-ever monthly sales this year in May, buoyed by a recent price reduction of up to RMB 30,000 on its existing vehicle lineup and the strong demand for the L6, which went on sale in mid-April. The company said the L6 accounted for more than 15,000 units out of its total deliveries in May and that it expected the number to surpass 20,000 units in June.
• Sales of Huawei-backed EVs took a slight hit in May while the Chinese tech giant was busy launching the redesigned versions of its existing Aito cars with partner Seres. Huawei’s Harmony Intelligent Mobility Alliance (HIMA), which currently consists of Aito and Luxeed series models, reported combined deliveries of 30,578 units last month, up 3.2% from April, with no breakdown.
• State-owned manufacturers Chery and GAC’s Aion also reported strong May sales, as both companies introduced big discounts in a move to respond to Beijing’s call to boost consumption. Chery on May 9 began selling the Sterra ET crossover at a competitive starting price of RMB 189,800.
• Xiaomi reported a 22.3% improvement in deliveries from April and aims to deliver more than 10,000 units starting in June.

Context: Retail sales of new energy passenger vehicles, which include all-electrics and plug-in hybrids, increased 27% year-on-year and 2% month-on-month to roughly 574,000 units during May 1-26 in China, when passenger car sales fell slightly to 1.2 million units, the CPCA figures showed.

• BYD, by far the dominant player in the market, on May 4 began offering subsidies of up to RMB 8,000 to consumers trading in their old cars. The auto giant on May 28 rolled out two new models with a driving range of 2,100 kilometers (1,305 miles), enabled by its latest plug-in hybrid technology.

BYD on Tuesday unveiled its latest-generation plug-in hybrid platform DM-i 5.0. The company said the technology gives its newest models a driving range of 2,100 kilometers (1,305 miles) at a starting price of only RMB 99,800 ($13,772), an advance that will likely accelerate China’s transition from fossil fuels to green vehicles.

Why it matters: The launch comes after figures from the China Passenger Car Association (CPCA) show that new energy vehicles (NEVs), most of which are battery electric vehicles (BEVs) and plug-in hybrids, represented more than half of China’s personal vehicle market in the first half of April.

• The surpassing of the 50% mark in vehicle registrations in China came for the first time in the week of May 13-19 in a historic moment. The milestone means that NEVs are now mainstream in the country, BYD Chairman Wang Chuanfu claimed on Tuesday, citing official figures (our translation).

Details: BYD said its fifth-gen dual-mode (DM) hybrid technology features an integrated system that covers all aspects of thermal and energy management, comprising cooling modules for front-end body parts, batteries, and in-car infotainment software.

• China’s biggest EV manufacturer also announced a breakthrough among production vehicles for their gasoline engines worldwide, as its new PHEVs can potentially convert 46.06% of the thermal energy they produce during combustion into mechanical energy, indicating a more efficient performance than rivals’ offerings.
• The company said it has also managed to reduce the excessive energy consumed in extreme weather conditions and achieved fuel consumption of 2.9L/100 km with an empty battery on the new platform. This gives its Qin L and Seal 06 compact sedans a driving range of 2,100 km on a full tank and full charge.
• The Qin L sedan, first unveiled at this year’s Beijing Auto Show, measures 4.8 meters in length and spans a 2,790-millimeter-long wheelbase. It comes as a mid-range offering between the Qin Plus and the more premium Han under the Dynasty family that accounted for nearly half of BYD’s sales last year.
• The Qin L has a similar-sized sibling, the Seal 06 DM-I, which is characterized by a more sleek and sporty design to attract younger customers. Both models have five variants respectively, providing an all-electric driving range between 80 km and 120 km and are priced between RMB 99,800 and RMB 139,800.

Context: A growing number of automakers in China are pivoting their efforts to develop PHEV models, as BEVs remain on a slow growth trajectory. Sales of PHEVs, which include extended-range hybrids (EREVs) in China, surged 64.2% year-on-year in April, compared with the 12.1% growth rate achieved by BEVs, CPCA figures showed.

• A week earlier, Chery launched the Fulwin T9, a plug-in hybrid crossover with a similar price range to BYD’s Song Plus, while Dongfeng unveiled its latest answer to the popular crossover, the Aeolus L7, with an estimated 1,500 km of driving range.
• Geely and Changan sell PHEVs under their Galaxy and Deepal lineups, respectively, while international majors from Volkswagen to Toyota are reportedly accelerating their steps to introduce such offerings in China.

READ MORE: Chinese officials reaffirm commitment to EV ambitions and promise raft of support measures amid industry doubts

China’s Gotion High-tech on May 17 unveiled a Tesla-like yet cheaper cylindrical battery as well as a more common prismatic battery with ultra-fast charging among its latest products.

Additionally, the Volkswagen-invested battery maker announced its participation in the global race to make all-solid-state batteries, as China looks to catch up with rivals in producing an alternative battery success story. Speaking to reporters during its annual technology conference, Gotion’s management stated that the company would continue its global expansion despite uncertain geopolitical conditions.

New batteries

Gotion is aiming to begin mass production of its new larger-format 4695 cylindrical battery – which is 46 millimeters in diameter and 95 millimeters in length – in the fourth quarter of this year. Shipment will then begin first to overseas markets, said Cheng Qian, president of the firm’s Asia-Pacific business unit.

The nickel cobalt manganese (NCM) battery cell targets producers of luxury vehicle models that look to provide their owners with an unbeatable driving range and charging speed. It has an energy density of 285 watt-hours per kilogram (Wh/kg), charges from 10% to 70% in nine minutes, and maintains at least 70% capacity for 2,500 cycles at room temperature, said Gotion. 

A vertical integration strategy is behind the battery’s cost advantage over rivals, according to Gotion. The Chinese battery maker has reduced dependency on external sources for raw materials including for its cathodes and anodes, ensuring relatively stable production in eastern China’s Anhui province. It also handled 300,000 tons of old batteries last year in an effort to make the most of recyclable metals including nickel and cobalt.

Gotion also announced it has begun making at scale its so-called “G-Current” battery, which could provide a 5C charge rate and allow it to recharge from a low state of charge to 80% in less than 10 minutes. The prismatic rectangular batteries will be available to customers for various battery chemistries including NCM and cheaper lithium iron phosphate (LFP). 

The G-Current is expected to meet surging demand for ultra-fast charging in the Chinese market, not just for battery-powered EV owners but for those driving plug-in hybrids. At least “several” gigawatt hours (GWh) of the capacity will come into force later this year for batteries supplied to clients with their PHEV models, Cao Yong, vice president of Gotion’s Engineering R&D Institute, told reporters (our translation).

The company also gave updates about an LFP product containing manganese. It plans to supply two international clients as early as the third quarter of this year with the product, with more than a dozen carmakers testing the LFP. A 140 kilowatt-hour (kWh) battery pack, first unveiled to the public last year, could power an EV for more than 1,000 kilometers (621 miles) on a single charge.

All-solid-state battery 

Gotion is hoping to start trial production of all-solid-state batteries by 2027 and is aiming for volume production by 2030, it was revealed, with the company publicly sharing its progress in the key emerging technology for the first time. The prototype battery cell has 30 Amp-Hours (Ah) of capacity and an energy density of 350 Wh/kg. The pack is set to reach 280 Wh/kg at a systemic level, giving it a driving range of 1,000 kilometers (621 miles) on a single charge. 

Like its Japanese rivals, China’s fifth largest EV battery maker by shipment is matching sulfide-based solid electrolytes, which theoretically gives the battery a high ionic conductivity, with silicon-based anodes, a non-toxic and promising active material, according to Pan Ruijun, a technical lead at Gotion. The company said the 3000-charge battery maintains thermal stability at 200°C above operating temperature.

Pan expects Chinese companies to shape the future of solid-state batteries globally, not only because the government is ramping up support for their development, but also because China is a major source of key raw materials. Japan is by far the leading force in this innovation, with Toyota aiming for deployment as early as 2027. Chinese auto and battery majors such as GAC are playing catch up. 

Overseas expansion

Gotion management also defended the company’s strategic supply of the American market, saying tariffs on Chinese battery imports would have little impact on the company’s US business operations. 

The Chinese battery maker plans local battery production, geared towards energy storage (one of its major exports to the US), in 2026, said Chen Ruilin, vice president of international business. The Biden Administration has said it would increase the tariff rate for Chinese non-EV lithium-ion batteries from 7.5% to 25% in 2026. Gotion’s raw material factory in Michigan is set to begin operation by the end of this year, and it is aiming for volume production of battery cells at a $2 billion plant in Illinois by the middle of 2025, according to Chen. 

Gotion, headquartered in the eastern city of Hefei, has ambitiously proposed a plan to have 100 GWh of capacity in each of its major overseas markets, namely the Americas, Europe and Africa, and the Asia-Pacific region, by 2030. It already makes batteries in Thailand, as well as at one of its European factories. The Illinois plant is expected to begin production this year, according to the state governor’s office.

The first electric vehicle model of NIO’s lower-priced, family-oriented sub-brand Onvo finally made its debut in Shanghai on Wednesday, the International Day of Families, after three years of development. The coupe-style sports utility vehicle was surrounded at its unveiling by not only hundreds of journalists but also Chinese parents who took their children to the event, and who the company hopes will form the very first owners of the long-anticipated car.

The Chinese EV maker on Wednesday began taking reservations for the Onvo L60 at a pre-sale price tag of RMB 219,900 ($30,471), cheaper by RMB 30,000 than the entry-level Tesla Model Y but with a longer driving range and a roomier interior space, among other advantages. The SUV, scheduled for launch in September, is expected to be priced at under RMB 200,000, and come with NIO’s Battery-as-a-Service (BaaS) program, in which customers buy a car and pay for a battery rental service, similar to the company’s scheme for NIO branded cars.

Confident in the strong competitiveness of its offering and a large customer base in China, NIO management said it has “high expectations” for Onvo, which is short for “on voyage” in English. Its Chinese name Ledao translates as “path to happiness.” Speaking to reporters after the debut on Thursday, William Li, founder, chairman, and chief executive of NIO, shared additional details about NIO’s ongoing partnerships for battery swapping with some of China’s most established car manufacturers, including Geely, Changan, and GAC. 

First Onvo EV

NIO’s first mainstream crossover, with a similar shape to its more premium siblings, competes with Tesla’s Model Y, the world’s top-selling electric SUV, from nearly every perspective. The entry-level L60 comes with a driving range of 555 kilometers (345 miles), a bit longer than that of the rear-wheel-drive Model Y (554 km), while the other two variants travel more than 730 km and 1,000 km on a single charge, respectively. 

The company also said that the L60’s outstanding wind resistance, measured by a drag coefficient of 0.229, increases its effective range, while a 900-volt electrical system reduces energy loss to heat, giving it a longer range. The total energy consumption of the car is 12.1 kilowatt-hours (kWh) per 100 kilometers, compared with the 12.5 kWh achieved by the Model Y, according to NIO. 

Li said that NIO will make a “pretty decent” gross margin from the L60, by focusing on core values that matter to Chinese families, rather than producing a vehicle with a dazzling array of unnecessary specs, a move that keeps the car’s overall costs under control. Cost savings also come from NIO and Onvo sharing research and development costs, among other synergies.

The Onvo L60 embraces the vision-based approach advocated by Tesla, which uses cameras and artificial intelligence and gets rid of lidar sensors for autonomous driving. It also uses a smaller and more affordable lithium iron phosphate (LFP) battery pack from BYD, according to Reuters.

Battery swaps

NIO also provided details about its extensive power infrastructure network, which is claimed to be the largest of its kind in China with more than 2,415 battery swapping stations as of Wednesday. It has long been a loss-making effort for the company but is now emerging as an attractive option for charging availability and cost reduction for a growing list of Chinese auto giants. 

Onvo owners will only be able to use the company’s newer swap stations (the third- and fourth-generation ones) and will share the facilities with NIO’s partners. Each of the newer swap stations, which can hold more than 20 battery packs of different sizes, can offer more than 400 swaps per day, with each pack being used roughly up to 20 times. Li mentioned the company’s plan to charge partners a service fee of roughly RMB 20-30 per swap. NIO itself completed nearly 70,000 battery swaps per day as of May 8. 

Meanwhile, NIO owners can “refuel” their vehicles at any swap shop, giving them more charging availability and a premium user experience. The company said it is on track to build 1,000 battery swap facilities on its own this year and expand the network for NIO and Onvo from the 2,316 stations available as of the end of last year, while its partners are also set to provide additional resources. 

Li added that he envisaged there being six to seven EV battery sizes at most over the long term, with partners set to use batteries of the same kind as Onvo. NIO currently uses batteries in four sizes with an energy density ranging from 70 to 150 kWh.

READ MORE: Drive I/O | Big bets on battery swaps

Chinese electric vehicle giant BYD will finally roll out its first electric pickup truck, named the Shark, in Mexico on Tuesday, marking its entry into the growing segment and firing the starting gun on a new race with established rivals from Ford to Tesla on the global stage.

The Shark is set to be a high-end offering and is the latest model in the company’s expanding Ocean family of EVs, which target younger and tech-savvy consumers compared with its Dynasty family. It also shares the company’s latest EV platform with the Bao 5, a luxury off-road sports utility vehicle under its Formula Leopard marque, or Fangchengbao in Chinese pinyin. Holding a dominant position in the home market, BYD is ramping up efforts to pursue global opportunities, and the launch of the Shark will be the latest attempt by a Chinese automaker to push upmarket and create a global brand.

With the BYD Shark framed by some as a serious threat to the Ford F-150 Lightning, below are some of the most important details about the pickup ahead of its official launch at 10:30 a.m. (UTC -6) today.

#1 The Shark will share the latest DMO (dual-mode off-road) plug-in hybrid EV platform with the dual-motor Bao 5 SUV, which uses a 1.5/2.0-liter high-performance petrol engine and delivers a combined output of more than 500 kW. BYD will also likely use high-quality materials and modern equipment in the truck to provide a high-spec cabin similar to that of its sibling, featuring the likes of advanced LED displays for infotainment and a large-sized head-up display unit to provide real-time information to drivers. 

#2 It also seems inevitable that a range of BYD’s in-house technologies will be incorporated into this strategically important model, including “blade batteries,” which boast improved thermal stability and strong resistance to collisions, as well as the DiSus, an electric-powered body control suspension system. In addition to featuring an adjustable suspension system powered by artificial intelligence algorithms, the Shark will also be able to power other vehicles as well as electronic devices with its bidirectional charging capability, which could be a useful and attractive function for camping expeditions. 

#3 Both PHEV and all-electric Sharks are expected to be available to global consumers, in line with BYD’s other international offerings. The PHEV will likely have a driving range of 1,200 kilometers (746 miles) on a full charge and full tank of gas and could be charged from 30% to 80% in just a few minutes, if the performance of the Bao 5 is repeated for the pickup, as seems likely. It may also provide low energy consumption similar to the Bao 5 which reports an impressive fuel consumption of 7.8L/100 km.

#4 The BYD Shark will probably focus on the overseas markets for the foreseeable future, as there have been restrictions on commercial vehicles including pickups in China. Some local governments have prohibited pickup trucks from being driven in their downtown areas, including Beijing, Hangzhou, and Chengdu. Nevertheless, the new model will be produced at BYD’s Chinese plants, at least for now. The company is looking for a location in Mexico to build a factory, BYD Americas chief executive Stella Li told Reuters early this year.

#5 BYD’s first pickup truck will compete against the Ford F-150 Lightning, the Tesla Cybertruck, as well as the Great Wall P series, at an expected price tag of around RMB 300,000 ($41,460). Rival Great Wall Motor was the top-selling brand of pickup truck in China in 2023, posting sales of 143,851 units globally and accounting for roughly half of the domestic market in the category last year. Ford reported a 6.8% growth in the US in the first quarter of 2024, thanks to strong demand for its pickup trucks.

An increasing number of automakers are looking to make their vehicles compatible with the battery swapping standard NIO is pushing for in China, as GAC Group said on Wednesday it will partner with NIO to expand swapping infrastructure for electric vehicles across the country. 

Why it matters: The collaboration highlights increasing efforts by carmakers, along with various stakeholders such as battery suppliers and energy firms, to tackle the issue of range anxiety – fear of an EV running out of power – which has hindered greater EV adoption. The move is also expected to allow NIO to cut expenses further as it opens the money-losing power network to other automakers. 

• GAC and NIO have a collaborative history that dates back several years. They set up a joint venture for EV manufacturing in April 2018 with a registered capital of RMB 2.5 billion ($350 million), although the following few years brought lackluster sales results for their joint brand Hycan. NIO completely retreated from the JV in the summer of 2022.

Details: According to a Wednesday release, the two automakers plan to develop a standardized battery module that would facilitate the roll-out of swap station-compatible passenger EVs from both sides. 

• They also expect to establish scale advantage by creating an extensive, unified power infrastructure network, as well as capture more value from repurposing used EV batteries throughout their lifespans. 
• Although a detailed timeline has not yet been released, owners of both brands’ vehicles will be able to use their own apps to access and pay for charging at a fast charger from either company by the end of this month. 
• ”With this as a starting point, we hope to build more battery swap stations with which our GAC Aion users will have a better swapping experience,” said Feng Xingya, president of GAC Group. 

Context: Guangzhou-headquartered GAC is the latest Chinese automaker to announce that its EV owners will have access to NIO’s nationwide infrastructure network, following deals with Changan, Geely, JAC, and Chery, as well as the company’s link-ups with state-owned utilities Wenergy Group and China’s Southern Power Grid. 

• State-owned manufacturer GAC, a manufacturing partner of Toyota and Honda in China, said it operated a network of roughly 1,000 battery refueling facilities nationwide as of December, of which dozens were swap stations. It has sold an undisclosed amount of Hyper-branded EVs with swappable batteries. 
• NIO operates 2,413 battery swap facilities as of Wednesday, already the country’s biggest network of its kind, and 3,828 charging outlets mostly for non-NIO cars. The company’s upcoming brand Onvo, with plans for an official debut on May 15, will share its latest-gen battery swap stations with those partners. 
• Battery heavyweight CATL and ride-hailer Didi are also jointly building battery swap stations in a move to answer Beijing’s call to further increase EV penetration, especially in lower-tier Chinese cities and the country’s rural areas. International carmakers are reportedly embracing Tesla’s EV charging system or forging their own alliances meanwhile.

READ MORE:  Drive I/O | Big bets on battery swap

Sales of Chinese electric vehicle makers Li Auto and Huawei-backed Aito dropped sharply in April as rivals Zeekr and NIO managed to post major improvements, in the latest indication of how competition in the country could be impacted by price cuts and new model launches. 

Why it matters: The latest sales figures in April showed the world’s largest EV market is slowly recovering from a sales slump due to an economic downturn and inclement weather early this year. Some potential EV buyers are still waiting on the sidelines for possible stimulus measures and for new cars shown at this year’s Beijing Auto Show to make it to market, experts say. 

READ MORE: Global carmakers take on Chinese giants in EV showdown at Beijing Auto Show 2024

Details: GAC’s Aion, Li Auto, and Huawei-backed Aito – which are among the biggest Chinese EV makers – all reported double-digit declines in EV deliveries in April from a month earlier. Huawei saw sales of Aito-branded EVs fall 21% last month, with monthly deliveries of the redesigned M7 falling to 10,896 units from its peak of nearly 30,000 units. Aion and Li Auto delivered 28,113 and 25,787 EVs in April, 13.6% and 11% fewer than a month earlier, respectively. 

• All three EV makers have launched new cars and ushered in steep price cuts for their existing models in order to maintain demand throughout 2024. Huawei said on Monday it had secured 11,000 reservations with non-refundable deposits for the Aito and Luxeed lineups over the recent five-day Labor Day holiday, while there were more than 41,000 pre-orders for Li Auto’s L6 range-extended hybrids between April 18 and May 5. GAC is currently putting the redesigned versions of its Aion V and Hyper HT battery crossovers on display in its showrooms nationwide. 
• In the meantime, Zeekr achieved record deliveries of 16,089 vehicles in April, up 24% month-on-month and 99% from a year earlier, mostly driven by a strong performance for its revamped 001 shooting brakes. NIO also saw sales hitting 15,620 vehicles, up from 11,866 a month earlier, as the company’s multiple sales pushes started to pay off. The EV startup has been offering a RMB 10,000 ($1,386) price reduction for those who trade in their old, gas-powered vehicles for a NIO car since the beginning of April. 
• While bringing attention to its rivals such as Zeekr and NIO for their similar offerings, Xiaomi posted impressive April sales to officially start its career as an electric car maker. The smartphone giant handed over 7,058 SU7 battery sedans to customers in its first delivery month and secured nearly 89,000 reservations with non-refundable deposits as of April 30. Chief executive Lei Jun expects the company to achieve an annual delivery target of 100,000 cars this year, with its production ramp-up already underway at its Beijing factory. 
• Xpeng Motors saw a slight recovery in April sales, delivering nearly 2,000 units of its first multi-purpose vehicle and bringing the total deliveries of the RMB 359,800 van to almost 10,000 units in the four months since its launch. The Volkswagen-backed EV maker has been under pressure from larger rivals, and declined to give detailed figures for the rest of its models. Sales of its G9, G6, and P7 models dipped to less than 1,700 units in March, figures compiled by Chinese auto service platform Dongchedi showed.

Context: China’s new energy vehicle sales in April are expected to be on par with March at roughly 720,000 units, partly because wait-and-see sentiment has grown among Chinese customers, the China Passenger Car Association said in an April 25 post.

READ MORE: ​ Explainer: How a new round of price cuts are reshaping China’s EV market ​

Tesla claimed on its Chinese app on Monday that it would be rolling out its full self-driving (FSD) system “very soon” rather than the previously stated “a bit later” (our translation). The development comes as the US automaker reportedly received tentative approval from Chinese authorities to deploy its advanced driver assistance systems (ADAS) in the world’s most competitive electric vehicle market following a surprise visit to Beijing by chief executive Elon Musk. 

Local customers have expressed mixed views about the potentially game-changing technology finally coming to their country, although many Tesla owners and loyal fans welcomed the long-overdue launch on social media. The technology may not yet work well in Chinese urban driving scenarios, despite costing RMB 64,000 ($8,838); most competitors such as Xiaomi promise to offer similar functions free of charge, Li Yang, a Model 3 owner in Shanghai, told TechNode on Tuesday.

Major Chinese EV players Huawei and Xpeng Motors, who specialize in autonomous driving, have responded in a relaxed way to what is seen by many as a major win for their US rival. 

“We are confident that Huawei’s intelligent driving system is the best in the world,” Richard Yu, Chief Executive of Huawei’s Consumer Business Group, said at a press event last week as the company introduced the redesigned Aito M5 crossover. Aware of Tesla’s release last month of the no-longer-in-beta FSD software, Yu said the company has closely studied its competitor’s technology by taking test rides in San Francisco, among other US cities. 

A long-awaited battle: Experts told TechNode that the US and China have been in a neck-and-neck race to develop “end-to-end neural network” technology, seen by experts as the biggest difference between Tesla’s FSD v12 software and earlier versions.

• Tesla chief executive Elon Musk stated publicly in November that its most updated, end-to-end FSD uses machine learning rather than rules crafted by programmers to absorb driving behaviors from large datasets. The approach reduces the carmaker’s reliance on coding, expensive sensors, and high-precision maps for exact road information.
• “It is more of a 1,000 flowers blooming type of situation here in China, while the US market is guarded by a sole player,” Paul Gong, head of China autos research at UBS, told reporters on Monday in Beijing, referencing a Chinese idiom. Both the US and China are at the forefront of the technological trend, followed by Europe and the rest of Asia, Gong added.
• Although Tesla has huge amounts of data, Chinese firms have the potential to quickly catch up by ramping up their test fleets, according to Song Chaozhong, CEO of Chinese self-driving car startup eCHIEV. Song cautioned that real, “human-like” autonomous cars are still far away, despite the technology likely being a positive driver for vehicle sales. 

A booming segment: Analysts expect Tesla’s imminent launch of the FSD software in China to not only help restore Beijing’s image among foreign investors in general, but also help China extend its lead in the adoption of driver-assist technologies worldwide, and enhance its reputation as a rising powerhouse of next generation cars. 

• China has become a source of innovative engineering for global automakers, as they are now leveraging the capabilities of Chinese companies to design global vehicle offerings, Gong said when asked his view of this year’s Beijing Auto Show. He added China’s push to open its industries to greater foreign investment and competition has been “underestimated.”
• Tech-literate Chinese EV makers are poised for explosive growth thanks to growing interest from Chinese consumers in intelligent driving features, as Elon Musk earlier predicted a “ChatGPT moment” was coming for his company. Huawei on April 24 estimated that more than 500,000 cars on Chinese roads will feature its advanced driving system by year-end. 
• Xpeng is scheduled to launch its affordable brand MONA in June with the first model expected to feature an autonomous driving system without the integration of lidar and aiming for annual sales of 100,000 units. Global shipments of vehicles with ADAS features, known as Level 2 plus autonomy, could more than double to 4.5 million units this year, with China leading the game, research firm Canalys wrote in December.

Context: Tesla’s China breakthrough comes after US Secretary of State Anthony Blinken on April 25 called on China to provide a level playing field for American businesses during his second visit to China in less than a year, Reuters reported. 

• The US automaker has reached a deal with Baidu to localize its driver assistance solution with map and geographical information from the Chinese tech giant, according to Bloomberg.

Global carmakers from Volkswagen to Toyota are introducing new models at the Beijing Auto Show 2024 with the help of Chinese tech companies in an effort to defend market share amid a major shift to electric vehicles led by local car giants. 

The biannual trade event, which on Thursday witnessed a return to pre-pandemic attendance levels after a brief pause in 2022, also represents another landmark moment for the Chinese EV sector where domestic players are once again on the offensive with an array of new models. A similar event in Shanghai a year ago reportedly prompted the industry’s legacy players to either increase their efforts or rethink their brands in order to adapt to the changes.

Below, TechNode provides a summary of some of the biggest releases from both international and Chinese automakers, including BYD, GAC, Geely, Honda, Toyota, and Volkswagen. There are also some notable updates from younger players such as Xiaomi, NIO, and Xpeng, which might give a clue as to where the most competitive EV market in the world is heading. 

BYD

China’s biggest EV maker on Thursday unveiled a higher-end variant of its Qin vehicle, the top-selling compact sedan in the country last year. The new car is scheduled for launch in the second quarter with an expected price tag of RMB 120,000 ($16,560). The Qin L measures 4.8 meters in length and spans a 2,790-millimeter-long wheelbase, placing it between the Qin Plus and the Han in terms of size. It features the company’s next-generation plug-in hybrid platform DM-i 5.0, which could suggest an improvement in range and fuel efficiency. The company also introduced the Seal 06, a plug-in hybrid EV under the Ocean lineup which is about the same size as the Qin L but loaded with more stylish design language to attract younger customers. 

GAC

Aion, the third best-selling EV brand in China last year after BYD and Tesla, showcased its first global model, replete with modern technologies and angular styling, as its state-owned parent beefs up its strategy to woo customers worldwide. GAC said its all-new Aion V, scheduled for launch in July, will maintain a driving range of over 750 kilometers (466 miles) even when the mercury dips to -30 degrees Celsius, and offers a large interior space comparable to the likes of the BMW X5. The all-electric sports utility vehicle, which incorporates traditional Chinese dragons into its design, can navigate varied urban environments worldwide with features such as lane switching by utilizing advanced artificial intelligence algorithms to process sensor data instead of high-precision maps, the company said.

Geely

Volvo’s parent showed its ambition to become a disruptive force in the global automotive industry with the debut of what it described as the world’s first production model with two sliding doors and front swivel seats. Geely has taken a radical approach to how EVs are put together, giving the 4.7 meter-long Zeekr Mix an extended wheelbase of three meters achieved through a more compact electric motor, shorter front overhangs, and repositioning of the air conditioning system, among other components. This, along with the front seats that can rotate 270 degrees, would allow kids to play or families to dine together in a 1.5 square meter interior flat space. The five-seater multi-purpose vehicle, offering a 1.5 meter width opening area for passengers, targets three-generation Chinese families, especially those with elders and pregnant mothers.

Honda

Japan’s Honda on Thursday began selling its second all-electric model with time-limited discounts in China in the company’s latest effort to boost sales. The move comes after entrenched rivals such as BYD and Tesla recently rolled out more price cuts amid slowing growth. The e:NP2 SUV has a driving range of 545 km at a price tag of RMB 159,800, providing buyers with a RMB 30,000 reduction compared to its original plan, according to Li Jin, a deputy general manager of Honda’s China joint venture with GAC. Honda also debuted the Ye, a new series of all-electrics with technologies sourced from Huawei and iFlyTek among other Chinese tech firms, as part of its plan to sell only EVs in China by 2035.

Toyota

Toyota said on Thursday it will integrate lidar sensors into its two upcoming models under the “Beyond Zero” (bZ) all-electric series, as the world’s top-selling automaker looks to provide consumers with the same level of assisted driving technology as Huawei and Xiaomi. The bZ3x and the bZ3c compact crossovers will be able to automatically change lanes, and enter and exit Chinese highways when they go on sale within the next 12 months. Toyota also announced it is exploring the uses of generative AI in collaboration with Tencent, as Chinese consumers expect their future vehicles to be more capable and personalized. This follows reports that the Japanese giant is using Huawei components to enable autonomous driving functions on its China-made EVs. 

Volkswagen 

Germany’s biggest carmaker participated in Auto Beijing 2024 with major global debuts including the ID.Code concept – which offers a glimpse into its upcoming, China-specific all-electric lineup ID.UX – as well as the Audi Q6L e-tron, the first production model based on its PPE electric platform. The coupe-styled ID.Code will be equipped for highly autonomous driving and come with a sophisticated AI assistant with contributions from local designers, as Volkswagen plans to introduce the first model under the new series later this year. In addition to partnerships with Xpeng and Horizon Robotics, the automaker confirmed it is working with Chinese tech giants including DJI, as its latest Tiguan L SUV now features an advanced driver assistance system (ADAS) sourced from the drone maker.  

Xiaomi, NIO, and Xpeng

Xiaomi was the center of attention on Thursday when the Chinese smartphone giant said it had secured 75,723 reservations with non-refundable deposits for the SU7, its first EV, with a competitive price range between RMB 215,900 and RMB 299,900. Chief executive Lei Jun expects monthly delivery to exceed 10,000 units in June and the company is set to reach a milestone with 100,000 EV deliveries by this year, which would be a record speed for any Chinese EV brand. The 55-year-old entrepreneur is an icon in the Chinese tech and auto industries, with his visits to rivals’ booths becoming one of the hottest topics at this year’s Beijing Auto show.

Xpeng Motors could take on its major frenemy with the mainstream brand MONA, short for ‘Made of New AI,’ CEO He Xiaopeng told reporters during a press conference. 

Meanwhile, one of NIO‘s new affordable brands, called ONVO, is scheduled for launch in the second quarter of this year. The luxury EV maker on Thursday launched a redesigned version of its ET7 sedan with a starting price of RMB 428,000, which is RMB 20,000 lower than its original version launched three years ago.

READ MORE: Huawei, Xiaomi, and Geely’s new EVs have details leaked on Chinese government site

Chinese electric vehicle brand Zeekr has grabbed the spotlight again after unveiling one of the finest luxury vans Chinese consumers can buy. The company says it is seeking to end the dominance of multinationals in the Chinese market, where dealers charge significant markups for similar offerings.

“This is among our top missions,” said Andy An, chairman of Geely Auto Group and chief executive of Zeekr, at a press event on April 19, calling the status quo “irrational” (our translation). An added that Chinese car brands now offer best-in-class luxury and safety as the market makes a transition to smart EVs. Dubbed “a royal suite” on wheels and a fully-electric answer to the Rolls-Royce Cullinan, the Zeekr 009 Grand costs only a fraction of the models that comprise BMW’s luxury lineup and costs less than the Toyota Alphard, one of its key competitors, at a price tag of only RMB 789,000 ($108,961).

The launch comes as Geely’s EV unit sees strong and continuous demand for its products on its home turf and is set to embark on a major push into global markets. The latest sales figures show that the Zeekr 001 has overtaken Tesla’s Model 3 as the best-selling battery-powered sedan in the Chinese premium car segment, as the company maintains its annual delivery target of 230,000 units for this year.

China’s answer to the Rolls-Royce Cullinan

The Zeekr 009 Grand boasts a combination of sophisticated craftsmanship and cutting-edge technologies and is geared towards the demands of Chinese celebrities and business leaders. Among the mesmerizing features include “curtain” glass that presents as pitch-black in less than two seconds and a single-click mode that deletes users’ travel history and contact data, designed to provide security and privacy. 

Zeekr is also upgrading its “giga-casting” technology, a technical term from Tesla that describes a process to diecast almost all vehicle underbody parts as one to improve car body stiffness. With the two rear seats coupled with die-cast vehicle frames in a C-shape formation, safety tests have concluded that the van’s interior remains intact following a rear-end collision by a 2.3-ton trailer at 50 kilometers per hour (31 mph), according to a video clip presented by the company. 

With only one variant, the 009 Grand has a driving range of 702 kilometers (436 miles) based on City Light Test Cycle (CLTC) standards, despite having more powerful motors than its original version.

The Chinese automaker says its four-seater outperforms the Rolls-Royce Cullinan in on-road performance with the adoption of artificial intelligence algorithms and adaptive dampers and air springs to smooth the ride, technology also embraced by BYD and Huawei. While Chinese carmakers from Li Auto to Great Wall Motor are carving out this increasingly important niche market, Zeekr said its special-edition 009 is winning customers over with its craftsmanship and quality materials, rather than with a more superficial luxurious design. 

Quest for growth amid slower EV uptake

Zeekr is emerging as one of the few Chinese EV makers bucking the trend of turning to plug-in hybrids in the middle of a bumpy transition to new energy vehicles (NEV), while aiming for strong growth despite an overall sluggish EV demand sentiment. The company just delivered more than 4,900 Zeekr 001 shooting brakes in the first two weeks of April, compared with roughly 2,100 units of Tesla’s Model 3 during the same period, according to figures compiled by Sun Shaojun, founder of Chinese consumer behavior research agency CarFans. 

Earlier figures also indicated sustained growth momentum as the revamped 001 pocketed roughly 30,000 non-refundable orders within 30 days of its launch on Feb. 27. BYD, Huawei-backed Aito, and Zeekr outperformed other brands in terms of new orders in the last week of March, Jefferies analysts said in an April 9 note. The companies have benefited from a spillover effect, as Xiaomi’s Porsche-alike sedan becomes a phenomenon, garnering huge attention for the smartphone giant as well as more established rivals. 

An told reporters during an interview that the long-term picture of the ongoing EV transition remains positive, with Zeekr maintaining a delivery target of 230,000 vehicles for 2024, almost double the nearly 119,000 units it achieved last year. It plans to enter dozens of countries in the Middle East, Latin America, and Southeast Asia this year, having started exports to Europe, the Gulf Bay area, and parts of Asia late last year. “In our view, Geely is at full steam for the EV race and overseas expansion with competitive NEV product offerings and an established global footprint,” Jefferies analysts said on March 27.

READ MORE:Interview: Zeekr executives on the 001 FR supercar, autonomous driving, and overseas plans

Chinese automaker GAC Group said on April 12 that it had broken through several obstacles regarding the durability and safety of “all-solid-state” batteries, and expected its future rollout of the technology to offer drivers a range of over 620 miles per charge by 2026. 

GAC, which made the announcement at its annual Tech Day, is among the few Chinese automakers to have offered specific plans in the race to market for next-generation advanced electric vehicle batteries. Toyota’s long-time partner has opted for a solid electrolyte system that sets it apart from the Japanese giant, by far the world’s leading holder of solid-state battery patents, according to Nikkei’s study. 

Why it matters: The development is the latest example of liquid-state lithium-ion pack leader China ramping up efforts to master the technology, as global auto giants expect solid-state batteries to give them an edge over competitors in the EV transition. 

• Global auto majors and battery makers have been adopting three highly promising solid electrolytes in place of a liquid one, a key element that allows the movement of lithium-ions between cathode and anode during charge and discharge cycles. Japanese and Chinese manufacturers primarily focus on sulfides and oxides, respectively, while Western makers are betting on both candidates and paying additional attention to polymers, according to market intelligence provider TrendForce.

Details: GAC claims its batteries offer better safety compared with not only liquid-based batteries but also solid-state alternatives, while achieving an energy density of 400 watt-hours per kilogram (Wh/kg), a roughly 60% rise compared with CATL’s highly advanced Qilin battery. It features a hybrid solid-state electrolyte based on both oxides and sulfides, among other materials. 

• The automaker said it developed a thin interphase film over the solid electrolyte surface, formed by a highly dense composite material in a special design that enhances structural durability and battery mechanics. This largely protects the battery from metal filaments known as “dendrites,” which may penetrate the solid electrolyte and eventually short the battery cell, allowing it to maintain thermal stability at 200°C above operating temperature. 
• GAC is also bringing out solid-state batteries with high-loading silicon anodes, adding that it has largely stopped extreme volume expansion and contraction of the anodes during electrochemical reactions, which harms solid electrolytes and often results in a poor overall battery cycle life. The latest prototype of GAC’s solid-state battery has undergone more than 100 charging cycles, retaining over 60% of its initial energy capacity, according to figures released by the company on April 12. 
• One of the major challenges for the large-scale use of oxide-based batteries is that their production is expensive and has fewer synergies with conventional manufacturing processes, according to an analysis published by Spanish research center CIC EnergiGUNE last May. And yet, the automaker said it can produce 30 Amp-Hour (Ah) battery cells while reducing costs in a push for volume production. GAC’s Hyper EVs are expected to travel more than 1,000 kilometers (621 miles) on a single charge in 2026, thanks to the technology.

Context: Experts say there is little agreement for now on which solid-state battery technologies will win out, and the timeline for their mass production and deployment remains uncertain. TrendForce generally projects that solid-state batteries may enter mass production between 2030 and 2035, with an energy density of 500 Wh/kg, offering a driving range two to three times greater than existing offerings. 

• Some early efforts at the game-changing technology are underway in other parts of the world. Toyota is aiming to market all-solid-state batteries as early as 2027, which could enable a range of 1,200 km and a charging time of just 10 minutes for its EVs, reported Reuters. Samsung SDI is looking at a similar timeline, saying last month that its plan for mass-producing such batteries in 2027 is well on track, while Nissan and BMW are aiming for 2028 and 2030, respectively.
• Several Chinese auto and battery majors, including Changan and CATL, are making semi-solid-state batteries, a more gradual alternative that uses a small amount of fluid or gel electrolyte in addition to a solid-state electrolyte. SAIC said last month that its upcoming EV under the Intelligence in Motion (IM) lineup will feature a semi-solid-state battery pack, with liquid accounting for 10% of the battery’s weight. The IM L6 sedan is scheduled for launch in May. 
• State-owned GAC has operated a plant to produce conventional lithium iron phosphate (LFP) batteries for its Aion-branded EVs in its hone base of Guangzhou since last December, which is expected to have an annual capacity of 36 gigawatt-hours by 2025. It also invests in technologies such as autonomous driving and flying cars, planning to roll out an advanced driving system for city roads using cameras, rather than high-precision maps and lidar sensors, in 2026. 

China’s commerce minister Wang Wentao talked with the heads of major car manufacturers including BYD and Geely on April 7 in Paris, as the companies scramble for solutions to an ongoing probe by the European Commission that could result in substantial tariffs on their imports of electric vehicles into the EU. 

Why it matters: The meeting comes as the EU prepares to publish its findings on whether Chinese automakers have benefited unfairly from state subsidies. Brussels could raise tariffs from the current 10% to at least 25% according to an estimate by European environmental lobby group Transport & Environment (T&E). 

• Chinese automakers have called for government support to push for a reduced tariff hike and to counter increased international political involvement in the industry, sources with knowledge of the matter told financial media outlet Caixin (in Chinese). Representatives of BYD, SAIC, and Geely were said to have accompanied Wang during his trip.

Details: At a roundtable discussion with the business leaders, Wang stressed the importance of Chinese automakers expanding overseas markets “in an orderly fashion” and embracing competition, according to a Twitter post by the China Chamber of Commerce to the EU (CCCEU)

• China also expects its manufacturers to bolster the integrated development of investment and trade, and maintain their commitment to technological innovation, Wang said. He added that claims that China’s EV competitiveness stems from state subsidies and comes with overcapacity issues in China are false and baseless. 
• During the April 7-9 trip, Wang also met with Franck Riester, France’s foreign trade minister, state broadcaster CGTN reported, as well as Renault chief executive Luca de Meo, acting chairman of the European Automobile Manufacturers’ Association. De Meo suggested that Chinese automakers establish their supply chain locally, sources told Reuters.

Context: France has backed the Commission investigation, according to Reuters, and has recently changed subsidy rules in a way that effectively excludes Chinese EV models. 

• China has in return requested French cosmetics giants including L’Oreal and LVMH comply with its data security rules by reporting details related to manufacturing processes and ingredients. It also launched an anti-dumping investigation into EU brandy exports in January. 
• Wang’s trip comes ahead of Chinese President Xi Jinping’s expected visit to Paris and discussions on trade tensions with French counterpart Emmanuel Macron, scheduled for May. This will be Xi’s first trip to Europe in five years, as tensions grow between China and the EU.
• The Commission reportedly carried out visits to BYD, SAIC, and Geely for verification work early this year, followed by the launch of a special custom registration process for China-made EVs, as imports rose by 14% year-on-year since formal investigations began last October. 
• Major Chinese automakers, including BYD, SAIC, and Chery, are also planning to construct their own car factories in Europe while also building vessels for shipments, as they look to capture a significant market share in the region with their affordable EVs.

Major Chinese car manufacturers, including SAIC and BAIC, saw double-digit declines in annual profits as the industry was hurt by slowing growth in new fossil fuel car sales and aggressive price cuts for their electric vehicles amid rising competition from the likes of BYD and Tesla. 

Why it matters: The latest financial results coincide with the rising momentum of plug-in hybrid electric vehicle (PHEV) sales in China. BYD, Geely, and Li Auto, all with a broad PHEV lineup, are among the few that reported both revenue growth and margin improvements, while traditional automakers and battery electric vehicle startups have been put under pressure to sacrifice profits for growth. 

• The figures also signaled potential growing challenges for international carmakers as Chinese EV manufacturers take a stronger position at home. The market share of their joint venture brands with Chinese partners will fall from 40% to 10% over the next three to five years, BYD chairman Wang Chuanfu forecast at an investor meeting on March 27, reported Reuters. 

Details: China’s biggest car manufacturer SAIC reported revenue of RMB 744.7 billion ($102.9 billion) in 2023, an increase of just 0.1% from the same period last year, with net profit declining 12.5% year-over-year. Sales of its joint ventures with Volkswagen and General Motors last year fell 8% and 14.5% to roughly 1.2 million and 1 million units, respectively. 

• BAIC Motor, a Hong Kong-listed unit of BAIC Group, also disappointed investors with a slower pace of revenue growth of just 3.9% in 2023, marking a slowdown from the brisk 8.3% rate notched a year earlier. Mercedes-Benz Group kept China sales flat with its joint venture partner last year, having slashed car prices by as much as a third over the last three months of 2023. 
• Revenue of GAC Group grew at a solid clip last year partly thanks to strong sales of its Aion EVs. However, Toyota and Honda’s main China partner revealed a 45.1% nosedive in net profit to RMB 4.4 billion, which it blamed on an RMB 2.9 billion one-time loss due to charges tied to restructuring, as well as shrinking revenue at its joint venture with Mitsubishi.
• Great Wall Motor’s annual results also offered a mixed picture as it struggles to ramp up EV sales profitably. Revenue grew a more robust 26.1% year-on-year to RMB 173.2 billion, but its profits fell 15.1% to RMB 7 billion. Some of its PHEV models such as Lanshan and Gaoshan fell short of expectations, Bernstein analysts wrote in a March 28 note. 
• Dongfeng Motor Group posted a loss of nearly RMB 4 billion for 2023, compared with a profit of almost RMB 10.3 billion, marking its first annual loss in nearly two decades since going public in Hong Kong in 2005. Sales of its two joint ventures with Nissan plunged 21.5% and 10.2%, while deliveries of its proprietary passenger EVs declined 5.1% to roughly 303,900 units.

Context: Beijing is planning to unveil new measures to boost the performance of FAW, Dongfeng, and Changan, three automakers directly under the leadership of China’s State-owned Assets Supervision and Administration Commission (SASAC), by giving them more leeway and independence in EV operations. Local government-owned businesses, including SAIC, BAIC, and GAC, are also expected to benefit from the policy in the coming months.

READ MORE: Chinese officials reaffirm commitment to EV ambitions and promise raft of support measures amid industry doubts

Major Chinese automakers, including Geely and Changan, have strategically introduced big discounts to their car prices or new variants of existing models despite posting a pickup in March deliveries, in a defensive move after Xiaomi’s first car reached nearly 90,000 pre-orders in just 24 hours. 

Xiaomi’s smash hit: The initial success of Xiaomi’s first EV, rolled out on March 28 with a lower-than-expected price tag, is having a knock-on effect on most other automakers which are being forced to take immediate action in order to hold on to their market shares. 

• The reservation-to-order conversion rate of the electronics brand’s SU7 has currently reached more than 35%, according to Sun Shaojun, founder of consumer behavior research agency CarFans. 
• Around 40% of Xiaomi customers canceled their pre-orders partly due to an expected long waiting time for vehicle delivery, Sun said in a Tuesday post on WeChat. Some were also frustrated by awkward sales-service interactions at overcrowded Xiaomi stores in major cities, Sun added, as the Chinese smartphone giant is gradually expanding its sales network for car retail. 
• Nevertheless, this is equal to a volume of at least 31,000 non-refundable orders in just four days, still an impressive performance for a new entrant and one that sees it surpass the early sales figures of Aito, a rising player launched by Xiaomi’s long-time rival Huawei.

March sales, discounts: Sales of Geely’s new energy vehicles (NEVs) rose 65% year-on-year and 34% month-on-month to 44,791 units in March, of which roughly 13,000 were Zeekr-branded battery EVs, partly driven by the strong sales of its refreshed 001 sports wagons, delivery of which began on March 1. 

• Geely on Monday launched a new rear-drive Zeekr 007 sedan, turning a bundle of add-ons into standard features including a large head-up display unit and heated and ventilated seats, at a price tag that is RMB 6,000 ($829) cheaper than Xiaomi’s SU7. 
• This comes after a similar move by Changan which two days earlier introduced a new entry-level variant of its Avatr 12, lowering the starting price of the premium sedan by 12% to RMB 265,800. Avatr’s deliveries more than doubled to 5,016 units last month. 
• Meanwhile, Huawei-backed Aito, which sells both battery EVs (BEVs) and plug-in hybrid EVs (PHEVs), edged out rival Li Auto for a third month in March with 31,727 deliveries compared to Li Auto’s 28,984, buoyed by strong demand for both the M7 and M9 crossover. 
• Aito claimed the M9 was the top-seller in the RMB 500,000-plus price segment in China last month, a title Li Auto had previously aimed for (and failed to reach) with its Mega van. Still, the EV brand, co-launched by Huawei and Seres, on Monday slashed the starting price of its best-selling five-seater by 8% to RMB 229,800. 
• NIO and Xpeng Motors deliveries also jumped significantly through March, and yet both are either slashing prices or using other promotions to lure customers. NIO’s ET5 and Xpeng’s P7i sedans compete in the same price segment as the Xiaomi SU7. 
• NIO said on Monday it will offer a reduction of RMB 10,000 for those who replaced their gasoline cars with a new EV. Xpeng’s G9 crossover now costs RMB 20,000 cheaper than its original list price, following a more than RMB 10,000 price reduction across its lineups a month earlier. 

READ MORE: Explainer: How a new round of price cuts are reshaping China’s EV market

Context: The March sales figures – which showed a rebound from the annual Chinese New Year holiday slump – also indicated a stronger growth momentum for PHEVs than BEVs with a growing number of carmakers pivoting to more affordable PHEVs as they look to expand NEV sales in China’s vast majority of underdeveloped regions.

• PHEVs accounted for more than half of BYD’s sales and enjoyed a higher growth rate than BEVs over the first three months of this year, according to a regulatory filing posted on Monday (in Chinese). The country’s biggest EV maker was followed by the likes of Geely, Aito, and Li Auto, all preferring a broader product portfolio to purely BEVs.
• Ouyang Minggao, an academic at the Chinese Academy of Science, said last month that PHEVs could grab substantial market share from internal combustion engine cars in the coming years, especially in the entry-level price segment, and expected more widespread adoption of BEVs over the next decade.
• EV adoption in China’s lower-tier cities and rural regions is slower than in the country’s more developed areas. A growing number of EV owners from lower-tier cities said they will go back to conventional automobiles for their next purchase due to a lack of charging infrastructure, according to an annual report by consultancy McKinsey released on March 12. 

READ MORE: Chinese officials reaffirm commitment to EV ambitions and promise raft of support measures amid industry doubts

Hundreds of people flocked to a Xiaomi store in the southern Chinese city of Guangzhou in the late hours of Thursday evening to be among the first to take a look at what many deem to be the electronics brand’s more affordable alternative to a Porsche, as the brand announced a lower than expected starting price for its debut electric vehicle. That’s what TechNode observed during a livestream broadcast by a Chinese electric car blogger on social media app WeChat that attracted more than 200,000 viewers within an hour. 

Xiaomi has already enjoyed a debut win after securing a record 50,000 pre-orders in just a few minutes following its SU7 EV launch event. The official livestream racked up nearly 43 million views on microblogging platform Weibo, underscoring the overwhelming interest among tech-savvy Chinese consumers in the company’s first car. Those making a reservation were asked to pay a RMB 5,000 ($692) deposit as part of the process, with the tech giant expressing its thanks to customers who did so in a brief statement on the microblogging platform Weibo (in Chinese). 

The all-electric sports sedan is selling at a lower than expected starting price of RMB 215,900 ($29,881), roughly $4,100 cheaper than the popular Tesla Model 3, while touting better performance from driving range to acceleration. The dual-motor all-wheel drive version competes with the Porsche Taycan with a top speed of 265 kilometers (165 miles) per hour at a price tag of only RMB 299,900.

Xiaomi’s car launch contrasts markedly with Apple’s surprise retreat from the EV landscape, after the iPhone maker reportedly scrapped its decade-long effort to make a car recently. “We will provide every user, including those with Apple devices, a smart and connected life experience everywhere, creating seamless integration in their homes, cars, and beyond,” Xiaomi chief executive Lei Jun said during the press conference (our translation). 

“A trump card”

Lei, the 55-year-old serial entrepreneur dubbed “China’s Steve Jobs”, tried to lure users away from traditional carmakers during the two-hour event by showcasing how Xiaomi’s ecosystem would provide universal connection and integration between different devices, including phones, cars, and gadgets at home. 

Xiaomi essentially promised potential buyers that their devices would be all tied together with a click, swipe, or a simple voice command. The car’s air conditioning will cool the interior down on a hot summer’s day once the owner tells a home speaker what temperature they want before even leaving the house, according to one example given. In another, the car’s dashboard could become a centralized command station for home accessories which will be activated as the driver approaches home. 

Although rival Huawei has touted similar efforts with its EV partners, Xiaomi claimed last November that more than 655 million devices have been connected to its IoT (Internet of Things) platform, from televisions to fitness bands, making it the biggest network of its kind worldwide. “This is a trump card from Xiaomi,” said Lei when discussing the linking of the brand’s new EV with its IoT network. 

“Better than Tesla”

Meanwhile, Lei mentioned Xiaomi’s plans to be “among the top-tier players” in autonomous driving, a field where Tesla already stands out as a pioneer globally and Huawei is establishing its name at home. The company said its EVs are already capable of traveling more than 300 km on average autonomously on Chinese highways before human drivers take over and will be able to complete most trips by themselves on urban streets across China by August. 

Xiaomi is moving towards two distinct approaches by working on both a camera-based computer vision system and another advanced driver assistance system (ADAS) that relies on more sensors including lidar. The company said it will exclusively employ Nvidia’s cutting-edge chips for both systems and bring the software development completely in-house to ensure timely over-the-air updates across all its car variants. 

“In China, Tesla vehicles will not be as good as the SU7 when it comes to intelligent driving capabilities,” said Lei, adding that customers who placed their orders before the end of this year will get the software free of charge. Tesla currently charges Chinese buyers RMB 64,000 for future access to its full self-driving (FSD) package, despite it remaining unavailable in the country. Still, it is faced with competitors from BYD to Geely which also look to offer customers highly automated features with their premium EVs.

READ MORE: Key takeaways from Xiaomi’s EV pre-launch: A top offering facing a tough test

China’s Zeekr and Xpeng Motors will begin delivering their electric vehicles to Thailand later this year while eyeing expansion to other Southeast Asian countries, as they seek further overseas growth amid slowing opportunities at home.

Why it matters: The news comes after Chinese car brands’ combined market share reportedly swelled by six points to 11% in Thailand in 2023, thanks to growing demand driven by favorable subsidies and tax breaks for EV purchases. 

• Southeast Asia’s largest car producer and exporter, Thailand has also become a strategic location for Chinese automakers wishing to diversify their operations and reduce geopolitical risks, according to researchers from the Global Policy Institute.  
• EVs accounted for around 10% of car sales in Thailand last year, and the government has aimed to increase that percentage to around 30% of its annual production of 2.5 million by 2030, making the country a regional manufacturing hub for EVs. 

Debut in Bangkok: Xpeng named on Monday three major dealer groups to sell and service its EVs for Southeast Asia: Neo Mobility Asia for Thailand, Premium Automobiles for Singapore, and Bermaz Auto for Malaysia. 

• The Volkswagen-backed EV maker announced the partnerships ahead of the opening of a major auto show in Bangkok, with plans to start delivering a right-hand drive version of its G6 crossover in the three countries in the third quarter of 2024. 
• In the meantime, Zeekr has put forward a similar timeline for its compact crossover X and multi-purpose vehicle 009, with plans to open its first store in Bangkok later this year. The company began Thai pre-sales on Monday. 
• The Geely-owned brand said it will expand its retail network with distributors in Chiang Mai, Phuket, and Pattaya by year-end. It has also signed contracts with car dealers in Laos, Myanmar, and the Philippines, Reuters reported on March 12. 

Local production ramp-up: Chinese automakers are making deeper inroads in Thailand by setting up plants in the country, as the Thai authorities required the firms to offset imports with local production at a ratio of 1:2 starting from 2026, in order to qualify for government subsidies. 

• BYD told investors last month that its $491 million car plant will begin operations in Rayong later this year, with an annual output of 150,000 units for both Thailand and the wider Southeast Asia region. The EV giant captured 4% of the country’s auto market with sales in 2023 of about 30,000 EVs. 
• Aion’s first overseas plant is set to begin production in July. The EV maker, an affiliate of China’s GAC Group, said on Jan. 31 (in Chinese) it will invest 2.3 billion baht ($63.2 million) in the project for an annual output of 50,000 units, not long after it started exports to the country in September. 
• Changan also hopes to begin exporting EVs from Thailand to nearby ASEAN countries and beyond next year, as it builds up capacity at a $241.7 million facility with a maximum output of 100,000 vehicles annually in Rayong. Rivals such as SAIC, Great Wall Motor, and Hozon Auto are also making their EVs locally. 

Hong Kong will provide a subsidy of up to HK$ 200 million ($25.6 million) to China’s Hozon Auto, which could alleviate the financial pressure on the electric vehicle startup and facilitate its expansion in overseas markets. 

Why it matters: Hozon Auto is the latest mainland-headquartered company to establish a base in Hong Kong as China hopes to create a high-tech megalopolis in its southern Greater Bay Area to rival California’s Silicon Valley.

• The news comes just months after CATL, the world’s biggest EV battery maker and a backer of Hozon, announced plans to set up a research and development facility in Hong Kong as part of a $128 million investment plan to make the city its international headquarters. 
• Chinese auto tech unicorn Horizon Robotics has recently partnered with Hong Kong Science and Technology Parks Corporation (HKSTP) with plans to expand its local research team and invest a total of HK$ 3 billion in the territory by 2028, according to an announcement published in December. 

Details: In addition to providing a $25.6 million subsidy, the Hong Kong government will also “provide assistance” (our translation) for a $200 million cornerstone investment for Shanghai-based Hozon, the company said on Wednesday in a statement, without giving further details. 

• “Hong Kong serves as a super-connector and super value-adder […] for mainland Chinese companies willing to expand their global presence,” Hong Kong Chief Executive John Lee said on Wednesday at a signing ceremony attended by Hozon chairman Fang Yunzhou, the South China Morning Post reported. 
• Hozon had announced plans in August to locate its global headquarters in the Asian financial hub in a partnership with HKSTP while promising to invest RMB 3.2 billion ($444 million) and hire 600 research staff locally over the next few years. It is also looking into the possibility of operating a production plant in Hong Kong. 

Context: In December, Hozon forged a partnership with local dealership DCH Motors to begin selling Neta-branded EVs in Hong Kong in 2024 and began trial production at its first overseas car plant in Thailand, which has an output of up to 20,000 EVs annually. 

• The company has reportedly hired several major investment banks including Morgan Stanley for an initial public offering in Hong Kong that could raise to $1 billion, a development that took place soon after the firm secured RMB 7 billion in a funding round last summer.
• Hozon delivered roughly 127,500 EVs last year, representing a 16% decline compared with 2022 and around half of its sales target of at least 250,000 units, and has been offering a price cut of between RMB 8,000 and RMB 22,000 on its vehicle lineups since mid-February as competition heats up in the Chinese EV market. 

China will stick to its plan of becoming an electric vehicle powerhouse on the world stage despite recent signs of weakness in the industry, and will fine-tune policies to deal with challenges including slowdowns and overcapacity, government officials said over the weekend. 

EV skepticism: The comments came after a slew of international carmakers, including Volkswagen, Mercedes-Benz, and Ford, moved to either cut production of electric models or delay their electrification goals as global demand growth fell short of their lofty expectations. Meanwhile, 2024 kicked off with a new round of price cuts in the Chinese auto market, putting loss-making EV makers under further pressure. 

• “It is untrue to claim vehicle electrification is a trap set by the West,” Ouyang Minggao, an academician at the Chinese Academy of Science, commented in response to doubts raised in the industry about the affordability and practicality of EVs at an annual forum organized by the EV100 think tank on March 16 (our translation). 
• Ouyang, also a vice chair leading the think tank and a standing committee member of the Chinese People’s Political Consultative Conference (CPPCC), said China‘s pursuit of new energy vehicles (NEVs) came after “great deliberation with due concern for oil security, air pollution, and industrial transformation,” according to a video clip seen by TechNode. 
• China could consider being more open to foreign companies, according to Ouyang, who proposed that the government should remove tariffs on EV imports, which could also help to offset geopolitical tensions. “We missed the opportunity to excel in making fossil-fuel cars, but I am confident about China becoming a powerhouse in the era of NEVs,” Ouyang added.

New measures: China will announce comprehensive measures in the coming days to boost domestic demand, facilitate consolidation in the industry, and broaden mass adoption for battery cars, according to several vice ministers who attended the forum. 

• China will enforce stricter oversight on the requirements pertaining to investments for manufacturing NEVs, curb blind expansion in NEV projects, and release specific guidance and regulation for merger and reorganization activities, said Shan Zhongde, a Deputy Minister of Industry and Information Technology. 
• The Commerce Ministry will look into the possibility of reducing insurance premiums on NEVs to help improve maintenance services and alleviate customers’ concerns, according to Vice Minister Sheng Qiuping. Meanwhile, Beijing will introduce new incentives to encourage buyers to trade in their old vehicles for greener ones, especially NEVs and hybrid vehicles. 
• The central government is also aiming to renovate 50,000 old urban residential communities this year, which will include the installation of public chargers for EVs, said Qin Haixiang, a Deputy Minister of Housing and Urban-Rural Development. The National Energy Administration will concurrently push for the sufficient availability of charging points in the country’s vast majority of rural areas, said director Du Zhongming. 

READ MORE: EV charging problems deepen as Chinese consumer confidence wavers: McKinsey

Rising PHEV usage: China expects the rising adoption of plug-in hybrid vehicles (PHEV) to offset the slowing growth of battery EVs in the short to medium term. BYD reported sales of roughly 1.57 and 1.44 million BEVs and PHEVs respectively last year, prompting a growing number of Chinese carmakers to follow suit in producing more of the battery EV alternatives. 

• Ouyang described the dual strategy of making both PHEVs and BEVs as “a wise move.” He expects PHEVs to grab significant market share from internal combustion engine cars in the coming years, especially in the price segment between RMB 70,000 and RMB 100,000 ($9,724 and $13,891), while envisioning a more widespread adoption of BEVs over the next decade.
• Sales of BEV and PHEVs in China rose 11.7% and 72.8% respectively in the first two months of this year, according to figures from the China Association of Auto Manufacturers (CAAM). Overall NEV sales increased 29.4% to 1.2 million over the period, and the industry group expects growth to further slow down to 21.1% in 2024 from last year, when the market grew by 37.9%. 

READ MORE: Chinese EV makers’ February sales hit by holiday, cold snaps

Details of new electric vehicle models from Chinese auto and tech majors including Huawei, Xiaomi, and Geely have been leaked online via an official regulatory process. Some are expected to make their debut at the upcoming Beijing Motor Show next month, positioned to compete with models from dominant rivals such as BYD and Tesla, and potentially stirring up a new price war in the world’s biggest auto market.

The companies expect the upcoming models, now making a splash online, to become bestselling or otherwise strategically important cars for their brands. Below are highlights from the registration filings released for public review by China’s Ministry of Industry and Information Technology (MIIT) on Tuesday, giving critical details of the models ahead of their official launches. 

Stelato S9

The S9 will be the first model under the new premium Stelato brand launched in partnership between Huawei and China’s BAIC and the largest sedan model of all Huawei-enabled EVs to date. The car measures 5.1 meters in length and 1.5 meters in height with a wheelbase of nearly 3.1 meters, offering passengers a spacious and comfortable interior in an effort to draw in affluent Chinese consumers. 

The all-electric executive sedan will be available in single and dual-motor variants producing 308 and 524 horsepower respectively, and will include innovative elements such as a camera-based digital rear-view mirror system as an optional add-on, according to the filings. Analysts expect the car to be launched in June for between RMB 300,000 and RMB 500,000 ($41,730-$69,550). Shares in partner BAIC Bluepark surged 32% on the mainland Chinese stock market on the news over the week. 

Zeekr Mix

China’s Geely is raising its bet on the small but growing segment of multi-purpose vehicles with its upcoming roll-out of the Zeek Mix, an all-electric five-seater van, after the launch of its larger and more business-oriented Zeekr 009 nearly two years ago. The pictures published by MIIT show a mid-size MPV with a rounded exterior and low center of gravity as well as an optionalLIDAR unit mounted on the car’s roof for automated driving. 

It is slightly shorter than the Zeekr 007 sedan at nearly 4.7 meters in length, likely making it easier to maneuver and attractive to parents, while offering a larger interior with a 3,008-millimeter-long wheelbase. The single-motor car has a 422-horsepower electric powertrain – higher than the plug-in hybrid Denza D9 from BYD, currently a top-seller in the market, but less powerful than bigger offerings such as the Xpeng X9 and the Li Auto Mega. 

Xiaomi SU7

Xiaomi on Wednesday received Chinese government approval for a new variant of its first EV, the long-anticipated SU7, equipped with lithium iron phosphate (LFP) batteries sourced from CATL and roughly 110 kilograms heavier than the one powered by BYD’s iron-based batteries. Speculation has circulated that the new power option could be CATL’s Shenxing batteries, which have boasted of a high energy density for a longer driving range and an 800-volt electrical system for faster charging compared with existing offerings. 

China’s industry regulator had previously uncovered details about another entry-level SU7 and the more premium SU7 Pro/Max, which the company claimed could accelerate from 0 to 100 km/h (62 mph) in 2.78 seconds and would be more aerodynamic than rivals’ offerings including Tesla’s Model S. Chief executive Lei Jun said on Friday that the smartphone maker will begin deliveries immediately on March 28, when pricing of the sports sedan will be finally announced.

READ MORE: Explainer: How a new round of price cuts are reshaping China’s EV market

Huawei and Chinese automaker BAIC are aiming for monthly sales of their first joint electric vehicle model under a new brand to exceed 10,000 units, as they also set their sights on markets in Asia and Europe, Chinese media has reported. 

Why it matters: The launch of the new car brand with BAIC, named Stelato and scheduled to be unveiled in April at this year’s Beijing Motor Show, would be another test for Huawei as the smartphone maker has been looking to grow its automotive business after being hit by US sanctions. 

• Huawei’s track record in EVs has so far been mixed. It has managed to bring the struggling Aito brand back to life with manufacturing partner Seres following the successful launch of the redesigned M7 plug-in hybrid crossover in September. However, the first Luxeed EV was a setback for the tech giant and its partner Chery, as buyers were confounded by delivery delays stretching for months. 

Details: Huawei and BAIC Bluepark, a mainland-listed subsidiary of the state-owned automaker, expect monthly sales of the first model under the new Stelato brand to achieve more than 10,000 units, according to an internal memo seen by Yicai (in Chinese). 

• According to the report, the executive sedan will be priced between RMB 300,000 and RMB 500,000 ($41,730-$69,550), and is scheduled to debut next month at this year’s Beijing Motor Show; it would then officially launch in June. 
• BAIC, a main partner of Daimler in China, is planning to create a capacity of around 300,000 EVs for the Stelato project, with more high-end EV models from sports sedans to SUVs in the pipeline, the report said. 
• The automaker last month told investors it is setting up a sales and service network for overseas markets, especially Europe and Asia. An existing partner to Huawei, BAIC sold fewer than 50,000 units of its Arcfox-branded EVs from 2021 to 2023. 
• Meanwhile, Huawei is set to launch its first model as part of a separate partnership with JAC Motor by the end of this year. The two companies plan to produce 35,000 units of the multi-purpose vehicle annually in a new plant scheduled for completion in 2025, according to an environmental filing published on March 1. 

Context: More Chinese automakers, such as state-owned Changan and Dongfeng, are joining Huawei’s expanding “Harmony Intelligent Mobility Alliance” in hopes of re-creating their brand images with Huawei’s smart cockpit and automated driving technologies, and leveraging its sales network.

• Aito for now remains the biggest success story of Huawei’s push into EVs, as vehicle deliveries grew 24% year-on-year to 94,380 units in 2023. Sales further increased to more than 54,000 units during the first two months of this year when most automakers reported flagging sales.

Chinese electric vehicle makers are taking a ferocious price war to a new level as BYD and its peers kicked off 2024 with dozens of redesigned models that boast improved specifications at lower price tags. 

For conventional carmakers, the situation is different from previous stages of the battle, as their Chinese counterparts claimed for the first time that “electric is cheaper than gas,” meaning their EVs now reach or even surpass price parity with similar combustion engine models. This milestone was supposed to take place as early as 2026, according to forecasts from BloombergNEF. Its ahead-of-schedule arrival is ushering a new phase for China’s car industry.

The world’s biggest EV market is being reshaped by a seemingly endless price war that has been going on for a year, and 2024 will likely be a defining moment for those faced with flagging sales, persistent losses, and cash flow pressure, analysts say. The following explainer looks at the causes and implications associated with the recent price cuts by automakers in China, as well as what we might expect in the future. 

The good: reduced costs, innovation

Among the key reasons for the price reductions is the plunging cost of raw materials for EV batteries, as the spot price of battery-grade lithium carbonate fell from more than RMB 500,000 ($69,450) per ton to just over RMB 100,000 throughout the last year. Jefferies analysts calculated that Chinese EV makers saw their gross profit margin recover by 2.3% in the third quarter of 2023 with average lithium prices falling by RMB 200,000. 

A vertically integrated supply chain stretching from batteries to chips has also granted EV leaders BYD and Tesla the ability to achieve economies of scale and innovate products rapidly. BYD, which has had strong “pricing power” especially in the price segment between RMB 100,000 and RMB 200,000, will embrace a proactive approach to competition, chairman Wang Chuanfu told investors during an earnings call last March (our translation). 

Analysts expect the downward trend in lithium prices to continue, as vast amounts of capital were poured into new mines in China following the price rise in 2022, resulting in a severely imbalanced market. Lithium prices could come in as low as RMB 90,000 a ton in the fourth quarter of this year, creating more room for most companies to make price adjustments, Jefferies strategists said in a Jan. 10 note. Meanwhile, EV makers such as Xpeng Motors are likely to improve vehicle margins “to some extent” thanks to innovations in fields such as automated driving. 

The bad: overcapacity, slowing growth

On the other hand, however, Chinese EV makers have been under pressure to boost sales volumes as they grapple with a clear capacity glut and slowing growth against the backdrop of weak momentum and insufficient demand. 

Only 20 out of 77 car manufacturers in China ran at more than 60% of their maximum operating capacity last year with numbers from the rest coming in under industry-competitive levels, according to public records. Tina Zhou, chief executive of auto parts trading platform Gasgoo, commented on social media on Dec. 17, citing this overcapacity as a major reason for the industry-wide price war over the past year. In January, the Chinese government said it would take “forceful measures to prevent superfluous projects” related to EV manufacturing, Reuters reported. 

Although China’s leadership in EV is seen as a bright spot in a faltering global economy and amid a domestic economic downturn, experts have painted a picture of a resilient but slowing market, flagging more price cuts to come as sluggish consumption abounds. Bernstein expects China’s EV sales growth to be “still impressive” but slower at 25% for 2024 compared to 35% last year, with a combined total of approximately 185 new EV models set to go on sale this year. 

“Consumers are getting spoiled by deep discounts and believe they will eventually negotiate a better price even for those new cars coming to the market,” Bernstein analysts wrote in a Jan. 10 note. 

Could it get ugly?

The unprecedented battle for the world’s biggest and most competitive EV market has pressured international auto majors from Ford to Toyota to scale back their operations since last year, with their market share (Tesla excluded) declining from 51.6% to 38.3% during 2021-2023. Citic Securities on Feb. 22 forecast (in Chinese) that number to drop to below 20% over the long term, with only German luxury carmakers able to maintain their presence. 

Meanwhile, a new wave of consolidation and some reshuffling is underway among Chinese EV makers as repeated price cuts allow the bigger ones to grab more market share and put their smaller rivals under financial pressure. The top 10 players could together claim a combined 85% of the market in 2024, driving smaller players out of business, Changan Automobile chairman Zhu Huarong, a delegate of the National People’s Congress, told Chinese reporters on Tuesday on the sidelines of the Two Sessions meetings in Beijing.

Not everyone agrees. NIO founder and chief executive William Li told TechNode during a media event in December that the company is preparing for a long drawn-out fight, while UBS envisioned China could be big enough to allow 10-12 domestic carmakers to sell significant volumes with different success stories by 2030 in the best-case scenario. 

Either way, it could be an almighty battle – it will be thrilling to see who emerges victorious.

Sales of major Chinese electric vehicle makers including BYD and Geely fell by nearly half in February from a month prior, hit by the week-long Chinese New Year holiday and a prolonged cold snap, as well as ongoing economic uncertainty. 

Why it matters: The slump largely reflects the increasingly fragile position of smaller EV makers, already struggling to maintain reasonable sales volumes while larger rivals compete for market share with new models on offer for lower prices. 

• Consolidation within the world’s biggest EV market is expected to accelerate as competition intensifies and growth slows. Li Auto president Ma Donghui told investors last week that the top three brands could together claim 70% of the segment in which an EV is priced from RMB 200,000 ($27,780) by the end of this year. 

Details: BYD on March 1 reported its lowest sales since June 2022, with 122,311 vehicles sold last month, a 39.2% fall from January. New energy vehicle (NEV) sales of rival Geely, including battery EVs and plug-in hybrids, dropped 49% month-on-month to 33,508 units. 

• Great Wall Motor saw a bigger decline from a month earlier than its rivals as the auto major sold 12,253 EVs in February, a drop of 51%, while sales of Aion, a subsidiary of China’s GAC Group, were 33.2% lower than a month before. 
• Jefferies analysts attributed the decline to a seasonal demand lull in the just past Lunar New Year holiday, which reduced working days and dampened buying interest, accompanied by an unexpected cold snap that swept through most of China. 
• Smaller EV makers were hit harder than large ones, as monthly sales of both Leapmotor and Hozon Auto fell below 7,000 units, while February deliveries of Xpeng Motors and Voyah were down roughly half to 4,545 and 3,182 units respectively. 
• Most automakers have either launched cheaper new models or offered big incentives to drive sales in recent weeks. BYD kicked off 2024 with the launch of at least eight lower-cost version cars over the past two weeks, forcing rivals including Geely, Changan, and Leapmotor to follow suit.
• Huawei-backed EV maker Aito and Nasdaq-listed Li Auto, are among few carmakers to enter 2024 in decent shape, each delivering over 20,000 units last month. General Motors’ joint venture Wuling and NIO saw deliveries drop 18.4% and 19.1% from January respectively. 

Context: Analysts expected NEV sales to bounce back in March following recent price cuts by China’s major automakers, as store traffic returns to pre-Lunar New Year levels, according to a March 1 note from Jefferies, citing a Chinese dealership. 

• Overall, NEV sales in China declined 29.5% month-on-month to roughly 668,000 units in January, in part due to a high base in December when most automakers made a year-end sales push, according to figures from the China Passenger Car Association. 
• The industry group warned that numbers would drop in February to their lowest level of the year as the market entered a traditionally low season. It remains to be seen whether March will witness a sales rebound.

Chinese electric vehicle maker Zeekr began selling a redesigned version of its best-selling 001 on Tuesday with a slew of performance features including an extended driving range and faster charging speed at a cost of RMB 269,000 ($37,364).

Geely Automobile’s Zeekr is strengthening its offerings with an enhanced advanced driver assistance system, or ADAS, which will enable hands-free driving functions on Chinese motorways, in the face of competition from Tesla and home rivals such as Xpeng, Huawei, and Xiaomi. 

Why it matters: The new 001 is the latest example of how Chinese automakers are stepping up a months-long price war by offering ever-increasing high-tech, luxury-style features for the same price or less, as the world’s largest EV market consolidates.

• The Zeekr 001’s first full model change in three years, with more than half of the components refreshed or replaced, has pushed costs up by RMB 50,000 per unit, but the company has kept the starting price the same. The automaker cut prices of the model by around 10% from its original price in August 2023. The Zeekr 001 accounted for 60% of the brand’s sales last year.

Range boost: At a press event at Zeekr’s headquarters in Hangzhou, company officials emphasized how the all-new 001 beats rivals with its large battery packs and high-voltage architecture, providing more range and allowing for faster charging. 

• Zeekr offers two standard versions of the revamped 001. A rear-wheel drive model is powered by a 100 kilowatt-hour (kWh) Qilin battery pack which provides a driving range of 750 kilometers (466 miles) between charges, while an all-wheel drive variant can reach 675 km on a single charge with 95 kWh Shenxing batteries. 
• Both battery types, sourced from CATL, boast an extremely fast charge. Owners can add 525 km of range in 15 minutes with the Qilin batteries which charge at a 4C rate. The latest-gen Shenxing supports vehicles to run 256 km after a five minute charge at a 5C charge rate and needs 30 minutes to go from 10% to 80% at a temperature of minus 10 degrees Celsius.

Self-driving improvement: Zeekr integrated the revamp with roof-top lidar as standard, along with high-definition cameras and ultrasonic radar sensors around its perimeter, allowing the vehicle to spot objects 200 meters away, a combination intended to avoid complex situations and possible collisions. 

• The sports wagons will feature an upgraded version of a feature called Navigation Zeekr Pilot (NZP), which would take over basically all driving functions on the motorway, such as changing lanes and overtaking cars, according to the company. It is set to be available to drivers in 60 major Chinese cities by March and 90% of the country by June. 
• Zeekr expects to start inviting drivers to beta test a more advanced version of the ADAS software by June, allowing them to navigate around complex city streets without moving the steering themselves. The EV maker has embarked on a hiring spree for advanced driving with plans to increase the unit’s headcount from 800 to 2,000 by year-end. 

Market outlook: Management expects the all-new Zeekr 001 to contribute at least half of its sales in 2024, with monthly deliveries reaching 10,000 units per month, Jason Lin, a vice president, told reporters on Tuesday. The company will commence delivery on Friday with a goal to deliver 230,000 EVs this year, nearly a 100% increase from last year, Reuters reported. 

• The battery EV competes with crossovers and sports sedans such as BYD’s Denza N7, as well as the upcoming Xiaomi SU7. Rivals from BYD to Great Wall Motor have been ramping up efforts to develop self-driving technology, a drive that has been led by Huawei and Xpeng in China. 
• Lin was bullish on the firm’s outlook, adding that the company will expand its retail network to 525 shops by year-end, adding 100 or so flagship showrooms in first- and second-tier cities and another 100 smaller ones in lower-tier cities. Zeekr currently has four models on sale, including the cheaper sedan 007, the multi-purpose van 009, and a compact crossover.

READ MORE: Geely to sell its Zeekr electric cars directly to customers

Geely is taking strides towards becoming a global auto leader as it finally lists an iconic sports car brand after a months-long delay. 

Lotus Technology, the electric vehicle division of Lotus, majority-owned by Geely after a financing deal in 2017, began trading its shares on Nasdaq on Friday. The brand appeared under the ticker LOT, achieved via a merger with a so-called blank-check company.

Despite China being Lotus’ largest single market, international markets are set to make a greater contribution to revenue growth and margin expansion, Feng Qingfeng, chief executive of Lotus Group and senior vice president of Geely Holding Group, told a Friday media call. 

Once a legend in the racing world with its lightweight and aerodynamic vehicles, UK-founded Lotus was for years fraught with financial trouble due in part to a mismatch between high investment costs and low-volume output. 

The $880 million infusion of capital from the deal is expected to fund Geely’s ambitious plan to fully electrify the illustrious 75-year-old racing brand by 2027 and boost its business beyond the super-luxury price segment globally. 

Global electrification boom 

Around the time Emira – the last Lotus model with an internal combustion engine – was released in mid-2021, Geely set its sights on the booming global luxury EV market set to enjoy  double-digit growth over the decade, according to Oliver Wyman, adviser on the deal. 

China’s second-biggest automaker by sales is set to expand in the US and South Korea in the second half of this year with the introduction of Coventry-designed, Wuhan-manufactured Lotus EVs featuring German engineering and Tesla-like automated driving features. 

Sales of the Eletre, an $115,000 sports utility vehicle and first of the new-age Lotus products, will begin in the US as early as September, followed by the delivery of the similarly-priced Emeya sedan next year, said Feng. Last July, Feng told the Financial Times that Lotus might use an existing plant owned by Geely-backed Volvo Cars in South Carolina, or possibly open an additional new US factory. 

The management on Friday did not give any update on the plan but expressed “full confidence” in its expansion, with its regional retail network set to be expanded to 80 showrooms from 47 in North America by 2025, despite rising US-China tensions. Global markets will account for roughly 60% of Lotus’ total sales by 2025, while China is set to contribute the remaining 40%, according to Feng.

Long road to revival

Taken public via a special purpose acquisition company on Friday, the UK-originated and Chinese-backed EV maker now has a market value of roughly $7 billion, less than a sixth of arch-rival Porsche. Yet, Lotus has set an ambitious goal of selling 150,000 EVs annually in 2028, up from 21,500 units last year, including a small number of gasoline-powered cars. 

The new phase brings different challenges. In addition to economic uncertainty worldwide, consumer sentiment for EVs is weak overall, especially in Europe, where Lotus is set to operate 105 retail stores by 2025. These challenges are compounded by policy and geopolitical risks for Chinese-backed EV makers selling abroad.

Meanwhile, EV sales in China appear to be shifting into a slower gear this year after years of accelerating growth. EVs now account for only 7-8% of new car sales in the segment priced from $80,000, lower than the “low teens” growth rate baseline estimated by the company, Feng acknowledged. Yet he continued to tout “strong growth potential” in the world’s biggest auto market. 

Management believes that a clear sales and marketing message derived from its decades of storied racing history will enable Lotus to stand out from rivals and bring it into closer competition with Volkswagen’s Porsche, which delivered over 40,600 electric Taycans worldwide last year. 

Meanwhile, Lotus Tech expects economies of scale from increased volume and competitive labor costs to bring its gross margin to at least 21% in 2025, up from 4.7% as of last June. The company has bet on a strategy similar to that of Porsche, which expanded into more affordable lifestyle luxury, from a pure focus on state-of-the-art sports cars. 

With a proven track record of turning around loss-making Volvo in just three years after its 2010 takeover, Geely has shown it can be adept at cross-border moves. The question now is, will it be successful this time?

Chinese electric vehicle maker Human Horizons will suspend production for at least six months and furlough its employees in an attempt to keep the company going as it looks for new funding, local media has reported. 

Why it matters: Human Horizons, which has been selling premium EVs under the HiPhi brand since late 2020, is the latest Chinese EV startup to scramble for cash as it tries to continue operations, as competition intensifies and growth slows in the hotly contested market. 

• Shanghai-based WM Motor, founded by former Volvo executive Freeman Shen, filed for a pre-restructuring process last October after failing to go public in Hong Kong via a backdoor listing, Reuters reported. Aiways, which began exporting EVs to Europe as early as 2020, also suspended production last year, the Financial Times reported.

Details: The austerity measures were announced at a staff meeting on Sunday and immediately went into effect, people familiar with the matter told financial media outlet Caixin (in Chinese).

• Human Horizons’ workforce were told on Sunday that their base salaries would be reduced to RMB 2,690 ($374) per month, Shanghai’s minimum wage, from March 15, the Caixin report claimed. 
• A company representative denied the report, without elaborating, according to Caixin. 

Context: The firm’s financial woes have been signposted for some time. It recently closed two showrooms and has been searching for new financing after Saudi Arabia’s Ministry of Investment withdrew its intention to set up a joint venture in a $5.6 billion deal.

• Human Horizons recorded a brief success during 2021-2022 when the automaker delivered roughly 8,700 upper premium HiPhi EVs and established a presence in the luxury segment where autos are priced above RMB 500,000 ($78,450). By comparison, Porsche delivered 7,315 all-electric Taycan cars in China in 2021. 
• The low-volume carmaker has since failed to extend its advantage in the mainstream luxury segment and struggled with a cash crunch. It delivered roughly 8,000 units last year, contributed to by the sales of its third model the HiPhi Y crossover, priced at RMB 339,000, while peers Li Auto and NIO delivered more than 376,000 and 160,000 units, respectively.

NIO Capital, a venture capital firm founded by Willliam Li, chief executive of the namesake electric vehicle maker, has raised a new China-focused fund of more than RMB 3 billion ($416.8 million), despite a global market lull and domestic economic challenges. 

Why it matters: The fundraising milestone will allow NIO Capital to further explore the “transformative potential of innovative technologies in the automotive and energy sectors,” said Ian Zhu, a managing partner at NIO Capital, in a Monday announcement. 

• The NIO-related growth-stage investor has backed some of the rising stars in the Chinese automotive world, from battery material manufacturer Ronbay to self-driving car startups Momenta and Pony.ai. It has also invested in battery giant CATL. 

Details: The deal shows the strength of NIO Capital’s ties with its limited partners, which include venture capital investment guidance funds set up by Chinese regional governments, national funds, family offices, and listed companies, according to the announcement, which did not provide further details. 

• The Shanghai-based venture firm said it will maintain its focus on areas such as auto tech and sustainable energy with the new RMB 3 billion fund, which brings the total assets under its management to about RMB 15 billion. 
• Speaking to Chinese reporters, a NIO Capital representative stressed the fund’s independence from NIO in its final investment decision-making. “We don’t require that a parts maker only supplies to NIO,” the person said as an example of its open-mindedness, 36Kr reported.

Context: The deal comes as global private investment remains soft due to interest rate hikes and economic headwinds. 

• Fundraising totals were on track to drop 28% in 2023 compared with 2022, and the number of funds could decline by almost half, US management consultancy Bain & Company said in a note dated July 17. 
• In China, roughly 5,300 private capital funds raised a total of RMB 1.35 trillion during the first nine months of 2023, down 2.1% and 20.2% from a year earlier, according to consultancy Zero2IPO (in Chinese).

The Chinese electric vehicle segment briefly lost momentum in January as a majority of automakers reported a significant sales drop on Thursday during the traditional low season, a contrast to December when big promotions and exciting discounts gave a short-term sales boost at year-end. 

Why it matters: The decline was especially marked for BYD, which accounted for nearly a third of the country’s green energy vehicle sales last year. The biggest Chinese EV maker maintained its leading position with sales of more than 201,000 units last month, although that number represented a 41% decrease compared to December. 

• Geely and Huawei-backed Aito are among the few bright spots that have bucked the trend with their new models, becoming potential challengers to BYD’s dominance. Meanwhile, international carmakers such as Volkswagen and General Motors posted decent sales with local partner SAIC, showcasing their efforts to play catch-up. 

Ups: Geely posted its best-ever month with sales of 65,826 fully electric and plug-in hybrid vehicles last month, roughly 5,400 units more than in December and nearly six times greater than what Volvo’s parent achieved a year ago. This growth was partly due to strong sales of its Galaxy and Lynk & Co brands, which sold 19,223 and 28,176 units over the month, respectively. 

• Aito also delivered a record 32,973 cars in January. That is in line with the company’s outlook and stands in stark contrast to the same month last year when it reported deliveries of only 4,475 vehicles. The brand, launched by Huawei and its manufacturing partner Seres, said on Thursday (in Chinese) that it has secured 140,000 non-refundable orders for its redesigned M7. 
• Avatr, another Huawei-backed and Changan-owned EV brand, also posted improved sales volume for January buoyed by the positive demand for its second model launched in November. However, an ongoing shortage of Huawei’s key components may add uncertainty to the outlook of the premium brand and its peers, as reported by Reuters. 

Downs: On the other hand, China’s US-listed EV trio are the ones under pressure by reporting their lowest monthly deliveries since June, as they engage in a relentless price war with larger tech and auto forces. Both Li Auto and NIO slashed prices on current lineups last month as they prepare to launch revamped models in March, potentially causing some customers to postpone purchases. 

• Sales of Aion, which has sold a large proportion of its vehicles to ride-hailing fleets, also dropped 46% month-on-month to 24,947 units in January. The EV maker, affiliated with state-owned automaker GAC, is now ramping up efforts to go abroad, as sales in the overseas markets reached the threshold of 3,000 units for the first time last month. 
• Deliveries of Great Wall Motor and Deepal, another Changan subsidiary, also decreased by 16.2% and 7.1% to 24,988 and 17,042 units respectively, from December. Meanwhile, IM Motors, a premium EV brand launched by China’s SAIC, saw a bigger drop with its January number more than halved from a month earlier to 5,305 units.

Context: China’s sales of new energy vehicles, mainly all-electrics and plug-in hybrids, increased 92% year-on-year from Jan.1-28 partly due to the year-ago low base effect marked by a wave of Covid cases after Beijing dismantled pandemic controls in December 2022. However, that number was 24% down compared with December when most automakers made a year-end sales push, figures from the China Passenger Car Association (CPCA) showed.

CATL and Didi said on Jan. 28 that they have signed a partnership to build battery swap stations for commercial fleets to recharge their electric vehicles, in a sign of China’s urgent need to set up a gold standard for EV infrastructure.

Why it matters: The news reflects how major players are rushing to build alliances and expand their presence in the hope of getting a larger say as the Chinese central government is pushing for industry-wide standards to drive EV adoption and reduce the strain on the grid. 

• Xin Guobin, a vice minister of industry and information technology, in June said Beijing will back businesses’ efforts to jointly set standards for battery specifications and swap techniques. 
• Meanwhile, the central government recently set a goal to begin operating large facilities for bi-directional charging in the next two years, which would allow EV batteries to charge during off-peak hours and return surplus energy to the grid when demand is high.

Details: CATL and Didi will set up a joint venture for a fast and large-scale roll-out of a battery-swapping network for ride-hailing services in China, according to a joint announcement, which did not reveal detailed plans for the swap network or the size and structure of the JV. 

• The two companies will also promote the adoption of EVs with swappable batteries while exploring collaboration on other areas such as storage-integrated EV charging facilities, the statement said.
• CATL expects such efforts to enhance its reputation since public infrastructure could help promote it as a purveyor of better quality and longer service life, people close to the company told Caixin.

Context: NIO is for now the dominant player in the field, operating more than 2,300 battery swap stations in China as of December. The EV maker plans to add at least 1,000 more this year and has partnered with big names including Geely, Changan, and Chery. 

• China reported a significant 81% annual increase for its battery swap infrastructure network with a total of 3,567 swap stations as of December, according to data compiled by the Electric Vehicle Charging Infrastructure Promotion Alliance (EVCIPA).

BYD and FAW Group are aiming to invest in DJI’s automotive business unit – one of the few Chinese companies capable of developing partially automated driving software – as part of the latest effort by traditional automakers to catch up with rivals such as Tesla, local media has reported. 

Why it matters: The news comes at a time when a growing number of automakers and suppliers are expanding their alliances in hopes of accelerating progress in and sharing the cost of making partially automated driving passenger cars. In China, the technology is being popularized by the likes of Tesla, Huawei, and Xpeng Motors. 

• It is also the latest example of Chinese auto majors taking steps to turn their business partnerships with tech companies into deeper capital relationships. Changan Automobile recently announced it will invest in a new venture set to absorb Huawei’s car business unit. 

Details: BYD and FAW, a manufacturing partner of Volkswagen and Toyota in China, recently conveyed their message to DJI Automotive, the car business unit of the namesake drone maker, 36Kr first reported on Wednesday (in Chinese). Citing people with knowledge of the matter, the report did not put a figure on the planned investment.

• BYD is planning to roll out partially automated driving functions for future affordable models priced at RMB 200,000 ($27,920) or below in 2025 with assistance from DJI, a person close to the company told TechNode on Thursday. 
• DJI is appealing to original equipment manufacturers (OEMs) for its low-cost advanced driver assistance system, as they have been struggling to lower costs and repeatedly cut prices of their cars, another source with direct knowledge of the matter told TechNode. 
• DJI, China’s biggest drone maker, stated that its technology suite, including an affordable computing chip from Texas Instruments (TI) with only a few cameras, could enable cars with automatic lane changing and on-ramp to off-ramp functionalities on Chinese expressways. 
• Some EV makers, including NIO and Li Auto, have developed similar functions based on Nvidia’s more expensive DRIVE Orin processors, with each offering 254 trillion operations per second (or TOPS), compared with the 32 TOPS offered by a top-end TDA4 chip from TI. 
• “While BYD is not the forerunner in autonomous driving, it has the ability to be a fast follower which will likely meet the needs for the majority of Chinese consumers,” Bernstein analysts wrote in a Jan. 22 note, citing economies of scale, which allows it to collect more data for software training from its large fleet, as one of the reasons.
• BYD and DJI did not respond to TechNode’s requests for comment. 

Context: Shenzhen-headquartered DJI separated its car business into an independent company in late 2022 and became open to external funding with a target valuation of $1.5 billion, Chinese media outlet Leiphone reported in August. 

• The drone giant has worked with SAIC-GM-Wuling (SGMW), a General Motors China joint venture, since 2019, with the first model integrated with its automated driving technology, the Baojun Kiwi EV, going on sale with a price tag of RMB 102,800 in September 2022. 
• BYD showcased a Yangwang luxury off-roader that integrates an unmanned aircraft on the car’s roof in a collaboration with DJI during a press event on Jan. 16. It also announced plans to release at least 10 new models this year featuring advanced driving technology.

READ MORE:  BYD’s Denza launches cheaper driver assistance system with Nvidia amid rising competition

Huawei and Dongfeng Motor, a Chinese manufacturing partner of Stellantis, are in an ongoing collaboration to develop smart electric vehicles, the companies have announced. This adds to a string of such deals by technology giant Huawei as it accelerates its entry into the auto market. 

The partnership could help Voyah, a subsidiary of state-owned automaker Dongfeng, increase sales and expand its presence in the red-hot EV market where a wave of consolidation and reshuffling is underway, according to David Zhang, a visiting professor at Huanghe Science and Technology University. 

Why it matters: The alliance is the latest example of Huawei’s multifold endeavor to expand into EVs. It has pushed two initiatives to enhance cooperation with carmakers in particular. 

• One is the so-called “Huawei Inside (HI)” business model, signifying that cars will feature Huawei’s full-stack technologies such as automated driving software and infotainment systems. Changan Automobile and Mercedes’ Chinese partner BAIC are among its partners. 
• The other is “Smart Selection,” in which Huawei not only provides technologies but also sales channels while gaining control over vehicle development. Aito has been the biggest success story under this approach, followed by the recent launch of Luxeed between Huawei and Chery. 

Details: According to Zhang, Huawei will adopt the HI approach with Dongfeng, mainly selling the carmaker components and software, and will probably not go into as much depth as it did with Seres. 

• This would allow Dongfeng, controlled by the State-owned Assets Supervision and Administration Commission, China’s state asset regulator, to maintain control of its premium EV brand, Zhang said. 
• As more EVs embrace cutting-edge technologies, an automated driving system powered by Huawei could be a big selling point for Voyah, elevating it above other brands. The tie-up could see the companies share development and marketing costs, Zhang added. 
• In a Monday announcement (in Chinese), Huawei and Dongfeng said they will move forward with the large-scale adoption of intelligent technologies with the joint development of new cars, without giving further details. 

Context: Huawei has been working on the spin-off of its automotive business unit for several months. The company in November announced plans to establish a joint venture with Changan, stating that other existing partners such as Seres have been invited to invest in the new entity. 

• Voyah posted significant growth in sales last year with deliveries of 50,552 vehicles, compared to less than 20,000 units sold a year earlier. The automaker in August launched a revamped version of its Free mainstream luxury crossover with a starting price of RMB 266,900 ($36,532) featuring Baidu’s automated driving assistance system.

China’s SAIC Motor Corp will spend $1.4 billion building 12 fossil liquefied natural gas (LNG)-powered ships to export cars, as Chinese electric vehicles spread overseas and the European Union tightens its climate and trading policies to reduce greenhouse gas emissions.

Why it matters: The move is the latest example of how EU regulations are pushing Chinese automakers to make changes to the way they operate, and adds to the challenges they face in expanding to overseas markets with their EVs.

Details: China’s biggest automaker said on Wednesday that the SAIC Anji Sincerity has begun its maiden trade voyage from Shanghai to Europe. The ship spans 200 meters (656 feet) in length and boasts capacity for 7,600 cars, making it the world’s largest ro-ro vehicle transport vessel partly powered by sustainable fuel. 

• The container carrier is powered by both diesel and LNG, a form of natural gas that has been cooled to a liquid for easier storage and transportation, providing as much as a 30% reduction in carbon dioxide (CO2) emissions compared to similar-sized, diesel-only vessels, according to an announcement on China’s Twitter-like platform Weibo. 
• SAIC expects to spend RMB 10 billion ($1.4 billion) on building 12 LNG carriers and lease two more for the next three years. The biggest of them will be able to carry as many as 9,000 cars, Zhao Aimin, vice president of SAIC Motor International, told financial media outlet Caixin (in Chinese). 
• Volkswagen’s Chinese manufacturing partner expects its carriers to have a total combined capacity of 1.8 million cars per year by 2026. Its wholly-owned subsidiary Anji Logistics currently operates a fleet of 31 carriers on seven routes to Europe, Southeast Asia, and Latin America, and works with automakers Dongfeng and Great Wall Motor among others. 
• Zhao also mentioned SAIC’s goal to sell 1.35 million cars overseas in 2024, which would mark a growth of more than 11% from the 1.2 million units it achieved last year. That number could be further increased to 1.5 million in 2025, with at least 14 new energy vehicles, including plug-in hybrids and all-electrics, set to go on sale globally over the next two years. 

Context: SAIC is not the only Chinese carmaker to build its own fleet and set its sights on going global. Its move takes place as China recorded exports of 5.2 million cars last year, meaning a 57.4% annual growth rate, and is set to dethrone Japan to become the world’s largest car exporter. 

• BYD’s first roll-on, roll-off, chartered vehicle carrier, named BYD Explorer No. 1, set sail towards Germany and the Netherlands from its base city of Shenzhen on Monday. Carrying more than 5,000 EVs, the vessel is reportedly managed by London-based Zodiac Maritime Ltd. and is being rented to BYD. 
• The EU began mandating shipping companies, among other businesses, to buy CO2 permits for 40% of the CO2 generated by their fleets from January, a percentage that will grow to 70% and 100% over two years from 2025, Reuters reported. 
• Meanwhile, the European Commission launched an anti-subsidy investigation of China-made EVs last October.

BYD has signed an agreement with Spain’s Grenergy to provide renewable energy power facilities using its blade-shaped batteries for a $1.4 billion energy storage operation in Chile’s Atacama Desert, which the companies claim to be the largest of its kind globally. 

Why it matters: The deal is the latest in BYD’s efforts to scale up its energy storage business and lead in areas beyond electric vehicles, venturing into the booming renewable energy sector, as global EV sales are reportedly poised for slower growth due to lower state subsidies this year. 

Details: BYD will provide Grenergy with a total of 2,136 large-scale energy storage systems powered by 1.1 gigawatt-hours (GWh) worth of its so-called blade battery, which boasts efficient space utilization and high thermal stability in a thin and lengthy form, according to a statement. 

• Grenergy will incorporate them in the first two phases of the Oasis de Atacama project in northern Chile, set for full operation within two years, and with a total capacity of 4.1 GWh and 1 gigawatt (GW) of solar installations. 
• The Spanish renewable energy group said it expects to complete construction of the largest energy storage project worldwide within three years. The project consists of five phases with a total investment of $1.4 billion.

Context: BYD had captured around 11.5% of the global energy storage system market with shipments of 14 GWh worth of batteries in 2022, industry tracker SNE Research said in an annual summary dated March 2, 2023. This places it ahead of South Korea’s LG Energy Solution and Samsung SDI, but significantly behind leader CATL, which controlled more than 40% of the market. 

• Having facilitated several solar power and battery storage facilities in the US, CATL said last March that it would supply 450 megawatt-hours (MWh) of lithium-ion batteries for a Texan storage project. A single GW is equal to 1,000 megawatts.
• Tesla is also reportedly doubling down on its energy business with the April announcement that it was setting up a new facility in Shanghai capable of annually making 10,000 large-scale, energy-storage battery systems. It deployed 6.5 GWh of energy storage in 2022.
• The US automaker estimates that to fully convert the world to sustainable energy will require a total capacity of 2,310 GWh per year of electric-chemical battery storage systems. Chinese battery maker Svolt expects that, in the best case scenario, that number could be achieved in 2030. 

Just as German majors once did in the gasoline-powered vehicle segment, Chinese carmakers are beginning to jointly build a reputation for luxury in the electric vehicle segment in their home country, according to Paul Gong, head of China autos research at UBS.

Why it matters: The comments point to a dramatic shake-up in the world’s biggest auto market as once-dominant foreign car brands lose ground while Chinese counterparts such as BYD and Li Auto have risen over the past year, often in step with each other. 

• Notably, Chinese status-conscious buyers are coveting local luxury-styled cars which have enjoyed a medium-to-high single-digit increase in average selling prices each year over the last decade, Gong told reporters in Shanghai on Tuesday. 

Details: China’s new cohort of EV makers have tended to sell pricier than average cars packed with high-tech features, inspiring their more established counterparts to improve their offerings and resulting in a positive net effect on all of the companies’ profiles, Gong said, pointing to “synergies” similar to those of the German majors in the fossil-fuel car era. 

• The “glass ceiling” of China-made car prices is being shattered, according to the Swiss bank, as Chinese EV models have gained popularity, especially models in the price range between RMB 200,000 and RMB 300,000 ($27,880-$41,820).
• However, it remains challenging for them to go further upscale into the super-premium segment where a car could be priced at RMB 1 million ($140,000), Gong added, citing a lack of confidence in luxury Chinese brands among older Chinese consumers.
• UBS projected that Chinese automakers will account for close to two-thirds of China’s passenger car sales in 2024, up from 56% a year ago, while absorbing 41% of the overall profit pool, compared with 17% in 2022, boosted by higher selling prices. 
• Gong envisioned China could be big enough to allow 10-12 domestic carmakers to sell significant volumes with different success stories by 2030 in the best-case scenario, rather than just three to five as some had previously expected.
• Tesla, Volkswagen, General Motors, and BMW were the only international car makers last month to record sales of more than 10,000 new energy vehicles, mainly all-electrics and plug-in hybrids, according to figures from the China Passenger Car Association on Tuesday.

Context: Having struggled to cope with the ferocious competition of repeated price cuts, Chinese car brands such as the established BYD and new entrant Xiaomi have sometimes turned to collaborations to generate buzz and support on social media. 

• BYD showcased a dozen Chinese-branded EV models, including those of rival Li Auto, in a show of solidarity at its headquarters in Shenzhen last August, TechNode reported. Meanwhile, a video clip posted by BYD has racked up nearly 24 million views on Twitter-like platform Weibo, which looked back at the developments of major domestic carmakers. 
• Xiaomi launched an advertising campaign on several digital outdoor billboards in China’s four top-tier cities to show its respect to competitors including BYD, Huawei, and Xpeng Motors, before the pre-launch event of its first EV model last month. In a post on his Weibo account, chief executive Lei Jun called his rivals “pioneers of China’s new energy vehicle industry.”

Geely on Jan. 5 launched the first battery electric sedan under its mainstream luxury marque Galaxy, which the Chinese automaker hopes will take the crown from the likes of the BYD Han to become China’s best-selling model in the mainstream sedan segment. 

“We are aiming to see the Galaxy E8 take pole position as a top-seller against the backdrop of increasing competition in the Chinese mainstream car segment,” Jerry Gan, chief executive of Geely Automobile Group, said in an interview after the launch event (our translation). The company did not provide specific sales targets, citing fluctuations in the market. 

Volvo’s parent is looking to carve out a significant piece of China’s increasingly crowded medium-to high-end car segment. Approximately 65% of the new EV models debuted at November’s Guangzhou Auto show were priced between RMB 200,000 and RMB 300,000, including the Galaxy E8, its sibling Zeekr 007, and BYD’s Sea Lion, Jefferies analysts wrote in a research note dated Nov. 28. 

BYD’s Han was 2023’s most popular electric sedan in the price segment with sales of more than 200,000 units. Geely posted sales of 83,497 vehicles under its Galaxy marque as of December, after deliveries began last June. It began deliveries of the E8 on Jan. 5 and has two other plug-in hybrid models for sale in the lineup, the L7 crossover and the L6 sedan, priced from RMB 138,700 and RMB 115,800, respectively. 

Below are five key factors that Geely hopes will carry the Galaxy E8 sedan to success:

Pricing: The Galaxy E8, a five-meter-long flagship sedan, starts at RMB 175,800 ($24,612), which is RMB 34,000 below the base price of the BYD Han EV, and RMB 6,000 lower than the smaller, hybrid Toyota Camry. Its all-wheel drive version is priced at RMB 228,800 and additionally features an 800-volt system for fast charging and acceleration from 0 to 100 km/h (62 mph) in 3.49 seconds. 

Smart cabin: Like its homegrown rivals, Geely has packed the luxury-styled but affordably priced sedan with technologies such as Qualcomm’s latest five-nanometer cockpit processor 8295, as well as a massive 45-inch wide 8K dashboard screen made by Chinese display manufacturer BOE. This makes the E8 probably the cheapest model that enables users to play hit gaming titles such as Asphalt in-car. By comparison, the 2025 Toyota Camry hybrid, which started pre-sales at RMB 181,800 in China on Jan. 1, is powered by Qualcomm’s previous 8155P processor. 

Performance: The single-motor E8 has a power output of 200 kW and is equipped with a 62-kilowatt-hour battery pack, offering a driving range of 550 kilometers (342 miles), while the entry-level BYD Han is fitted with a 60.5 kWh battery and a 150 kW motor. The top-end version of the E8 boasts 800-volt fast charging that potentially adds 180 km on a five-minute charge; for comparison, all the variants of the more premium Zeekr 007 offer an additional 610 km from a 15-minute fast charging session. 

Exterior: The capacious midsize sedan comes with a “ripples of light” design element, featuring an aesthetic front end with a 1.1 square foot illuminated graphics area comprising 158 micro-lights that can be programmed to display “over 100 different light shows,” according to Geely. It also has an aerodynamic design with frameless doors and concealed door handles, on  a 2,925-millimeter-long wheelbase, making it slightly larger than the BYD Han.

Satellite assistance: The E8 is one of the incoming models that could provide satellite call services in areas with no cellular or WiFi signal. Geely said it will launch a further 11 telecommunication satellites into low orbit in February, following the successful launch of its first nine satellites more than a year ago, geared towards offering high-precision navigation for its self-driving cars, reported Reuters.

Top Chinese automakers BYD and Geely on Monday reported record sales of electric vehicles in 2023 on the back of year-end momentum from their home turf and strong shipments to overseas markets, as China’s booming industry ramped up its push for global expansion.

Why it matters: The latest sales figures come at a time when China is set to surpass Japan to become the world’s largest car exporter, according to estimates by the China Association of Automobile Manufacturers (CAAM)  as reported by Nikkei, buoyed by a growing demand for green energy vehicles worldwide.

• Exports of new energy vehicles, mainly all-electrics and plug-in hybrids, grew 83.5% year-on-year to almost 1.1 million from January to November, while internal combustion engine vehicles remain the major export commodity, accounting for 75% of China’s total car shipments abroad, according to CAAM.

Details: BYD posted record sales at more than 3.02 million EVs in 2023, marking 62% growth from a year ago and putting the Chinese carmaker in pole position to retain its title of the biggest-selling EV brand in the country. In particular, exports surged 334% to 242,765 units compared with the previous year, with the company now having established its footprint in more than 70 countries.

• Sales of SAIC-GM-Wuling, General Motors’ minicar joint venture in China, also reached a record high of 1.4 million units, of which 211,512 were overseas exports, representing a 9% year-on-year growth. The automaker currently sells its budget models including Mini EVs in Southeast Asian countries such as Thailand, Vietnam, and Indonesia. 
• Geely said its EV sales rose 48% year-on-year and were also record-breaking last year, at 487,461 units, including 274,101 gas-powered and green energy vehicles abroad. Its premium EV brand Zeekr delivered 118,685 units over the year, up 65% year-on-year but missing its delivery goal of 140,000 units set earlier this year. 
• GAC’s EV unit Aion was also around 20,000 units short of its annual delivery target of 500,000 EVs, closely followed by Changan Automobile at more than 470,000 units. Huawei’s manufacturing partner said overseas shipments grew 35.4% to roughly 230,000 units, as construction of its overseas production base started in Thailand last month. 
• Li Auto maintained its solid momentum throughout the year as it reported deliveries of 50,353 plug-in hybrid crossovers in December, bringing the company’s total deliveries for the year to 376,030. Young EV makers such as NIO and Xpeng Motors are catching up with annual deliveries of 160,038 and 141,601, respectively. 
• SAIC-Volkswagen, the joint venture of the Wolfsburg-based automaker and China’s state-owned automaker, said it became the most visible player among its peers with sales of almost 110,000 units of its China-made ID family electric models. The German automaker in July reportedly cut the price of its ID.3 hatchback by more than 20% to RMB 125,900 ($17,500).

Context: CAAM expected car sales in China to reach the threshold of 30 million units for the first time in 2023 and that number will be further increased to 31 million in 2024, Caixin reported. NEV sales are set to total 9.4 million units in 2023, up 37% from a year earlier. The growth rate could slow to 22% in 2024, however, as the domestic EV market is maturing.

Xiaomi held its most significant media event of the year in Beijing on Thursday: the debut of its first electric car. With a size comparable to the BMW 5 Series and a shape similar to the Porsche Taycan, the four-door sedan boasts some of the Chinese car market’s highest specifications, as cut-throat competition from maturing rivals rises.

The sleek, gadget-full all-electric sedan is aiming to become a top choice for China’s increasingly tech-savvy consumers, and certainly aroused widespread curiosity judging by the more than 46 million people who logged on for the three-hour-long unveiling on the country’s Twitter-like site Weibo. Yet from journalists and insiders alike, the reaction was mixed. 

From the event, TechNode has selected some of the car’s highlights. 

Main specs

The high-performance SU7 can sprint from 0 to 100 km/h (62 mph) in 2.78 seconds, as it climbs to a top speed of 265 km/h. It is claimed to be the world’s most aerodynamic production car with a drag coefficient (Cd) of 0.195. By comparison, the Taycan Turo can hit 260 km/h and Tesla’s Model S has a Cd of 0.208. It also comes just a month after rival Huawei launched the Luxeed S7 sedan at 0.203Cd. 

Xiaomi said it uses two 9,100-ton mega casting press machines to produce the front and rear underbody pieces, giving the car a torsional stiffness of 51,000 Nm/degree, nearly twice the number of the Ford F-150 Raptor and higher than any other car on the road. The technology, first adopted by Tesla, has since been embraced by Chinese EV makers from Geely-affiliated Zeekr to Huawei-backed Aito.

Vehicle autonomy

Xiaomi’s chief executive Lei Jun presented aspects of the company’s self-driving initiative for public viewing, highlighting that the premium version of the SU7 will incorporate two Nvidia Drive Orin processing chips plus a laser sensor unit on the car’s roof to carry out certain partially autonomous driving functions. Xiaomi also showed a short video of the car drawing into a tight garage space autonomously.

The Chinese tech company has set a goal for its advanced driver assistance software to be available to drivers in 100 major Chinese cities by the end of the next year, according to Lei. Huawei and Xpeng Motors are for now the leaders of this booming market, with established carmakers from BYD to Great Wall Motor trying to catch up.

Smart cabin

The SU7 will be the latest Chinese car model powered by Qualcomm’s smart cockpit computing platform SA8295, after the Zeekr 001 FR and its sibling Jiyue 01, and its infotainment system will turn on in just 1.5 seconds. It is also integrated seamlessly into the Xiaomi ecosystem with the adoption of the company’s self-developed operating system, the HyperOS, which takes only 30 minutes or so to carry out important updates, according to the company. 

CEO Lei said the SU7 would create the same smooth experience that anybody with a Mi Phone is used to, as various apps are pushed from their phones to a 16.1-inch in-car dashboard once they sit in the car. Other devices, from tablets to home appliances, also seamlessly work with the vehicle, an integration trend led by auto and tech majors such as Huawei, Geely, and NIO.

Conclusion

Xiaomi will have to pick an appropriate price tag, given it starts with a somewhat broad, unclear positioning, said You Xi, a seasoned economic and financial writer and co-founder of Chinese online media platform Communication Planet. “It remains challenging for the company to extend its brand into EVs,” You added, citing similar offerings from multiple competitors among his reasons (our translation).

The smartphone giant plans to introduce two variants of the SU7 to “contemporary elites with taste in lifestyle and technology” in China over the next few months, said Lei. Some experts have predicted the premium version of the car, with an estimated driving range of 800 kilometers (497 miles), could cost consumers at least RMB 300,000 ($41,124).

Chinese EV maker NIO on Dec. 23 unveiled a long-wheelbase executive sedan model, the ET9,  with a price range of $112,160. The model boasts its own self-driving chip, marking the first utilization of the five nanometer process technology in China’s auto industry. 

The four-door executive flagship, equipped with proprietary technologies such as a sophisticated yet lightweight chassis system and a superfast-charging battery pack, reflects NIO’s commitment to redefining the upper premium vehicle market, William Li, the company’s founder, chairman, and chief executive, told press at the annual NIO Day event on Dec. 23. Li further referred to the target segment as ”a spiritual home base“ for international luxury carmakers (our translation). 

With a pre-sale starting price of roughly RMB 800,000 ($112,160), NIO’s answer to the Porsche Panamera could serve as a low-volume halo car and is scheduled for delivery in the first quarter of 2025. Larger rivals from BYD to Geely have also launched similarly-priced offerings, indicating their aspirations to upscale and grab a slice of the luxury market.

Here are some of the key specifications of the ET9 presented by NIO at the company’s annual gathering held in the northwestern Chinese city of Xi’an. 

Design highlights: Different from old-money cars that Western brands typically offer, the NIO ET9 features a sleek and contemporary look with high ground clearance, large 23-inch wheels, and cutting-edge gadgets such as laser sensors on the roof and sides for an all-round view of the car’s surroundings. 

• The interior boasts a modern design language. The car features an almost two-meter (six-feet) console that extends through the length of the cabin and is integrated with equipment such as a 10L fridge and folding tables, offering passengers first-class-style seats and comfort.
• The grand tourer measures 5.3 meters in length and 1.6 meters in height with a wheelbase of nearly 3.3 meters, making it longer than the Bentley Flying Spur and almost as tall as a regular off-roader. The back seats can be reclined as much as 45° and come with full-body massage programs. 

Autonomous driving: The ET9 will be powered by NIO’s first self-developed system on chip (SoC), the Shenji NX9031, for partially automated driving. NIO stated it will be the first Chinese automaker to use chips with five-nanometer process technology, providing its vehicles a computing power comparable to the combined total of that created by four industry-leading processors. 

• By comparison, NIO’s existing lineups are equipped with four Nvidia DRIVE Orin chips that handle up to 1,016 TOPS on seven nanometers. The purpose-built chip is a strategic move as it could improve processing efficiency and machine learning algorithm coupling for autonomous driving, Jefferies analysts said on Monday. 
• Li declined to provide further details about the semiconductor. Tesla has reportedly turned to Taiwan’s TSMC to produce its next-generation full self-driving (FSD) computer on 4/5 nm processes. Homegrown rivals Li Auto and Xpeng Motors are also developing their own chips for vehicle intelligence. 

Large cylindrical battery: The ET9 will incorporate NIO’s in-house developed, 46105-type cylindrical lithium-ion battery cells. This implies a size of 46 millimeters in diameter and 105 mm in length with a cylindrical shape, a technology also embraced by Tesla in the hopes of increasing ranges and lowering costs. 

• NIO asserts that its new batteries have a cell-level energy density of 292 watt-hours per kilogram (Wh/kg), and a 120 kWh pack can provide a range of 255 kilometers (159 miles) after five minutes of charging at a 5C rate, facilitated by a 900-volt electrical system. By comparison, CATL’s latest Qilin battery would allow Li Auto’s Mega van to cover 500 km on a 12-minute charge at a 5C rate. 
• NIO did not reveal many further details, except for Li’s comments to investors during a Dec. 5 earnings call stating plans to outsource battery manufacturing for reduced investment and improved margins. The EV maker is reportedly in talks with Great Wall Motor-backed Svolt to set up a joint venture for making batteries in its car manufacturing base of Anhui. 

Smart chassis: NIO also launched an intelligent chassis suspension system which the company claimed would provide a refined driving experience featuring a steer-by-wire system, rear-wheel steering, and adjustable suspension altogether for the first time in a mass-produced consumer car.

•  NIO said the so-called SkyRide Intelligent Chassis System, in combination with hydraulic components, could be raised or lowered by 50 millimeters in one second to help passengers in and out of the car. In April, BYD introduced a similar offering that could automatically adjust to different road conditions and driving styles.
• In a 50-second video clip presented by NIO on Dec. 23, an ET9 prototype offered an apparently smooth ride when driving over multiple speed bumps and showcased a four-tier tower of Champagne glasses on the front body panel which remained in place despite the road surface. The flagship sedan is also highly maneuverable with a turning radius as low as 5.45 meters, a record also achieved by Xpeng with its upcoming X9 van.

Huawei is doubling down on electric vehicles with plans to run as many as 800 showrooms in China next year dedicated to the joint car brands that it has launched with manufacturing partners, aiming to become a more visible player in the world’s biggest auto market. 

Why it matters: The new shops, expected to present a broader portfolio with larger spaces compared to Huawei’s current policy of showcasing vehicles in its regular appliance stores, will allow Huawei to display models and arrange test drives for more potential buyers. They will also be part of a branding overhaul to enhance Huawei’s brand image as a major car tech company. 

• Huawei began selling EVs powered by its technologies and manufactured by partners via its sales network for smartphones in early 2021 under its “Smart Selection” approach, in which Huawei reportedly provides sales channels and has more control over vehicle development.

Details: In what could be the tech giant’s fastest period of growth in its history, Huawei is planning to operate 800 car showrooms next year and increase that number to 1,000 in 2025, people familiar with the matter told Chinese media outlet 36Kr. 

• Those new shops will feature a new brand called the Harmony Intelligent Mobility Alliance (HIMA), a collaborative initiative for carmakers and a rebranding of Smart Selection based on Huawei’s proprietary Harmony operating system. 
• Some of the smaller locations could start from 2,500 square meters, allowing six cars to be displayed in-store while also doubling as a delivery center with another six for-sale vehicles in parking spaces outside, according to a franchise disclosure document obtained by 36Kr. 
• Huawei’s preferred flagship stores require a wider area of 8,000 square meters or more, and the company is renovating some existing retail shops to showcase the new HIMA brand with improved layouts, according to the report. 
• Some existing locations do not showcase the newly launched Luxeed S7 due to limited space, the report said. Huawei currently has three models on sale in partnership with Chongqing-based manufacturer Seres and state-owned carmaker Chery. 
• Huawei did not respond to TechNode’s request for comment. 

Context: Sources added that a retail and distribution network of 800 shops next year will be comparable to that of Huawei’s major rival Li Auto, which operates nearly 400 direct-sales stores and 320 maintenance centers as of November. 

• Huawei is quickly expanding its EV lineup in collaborations with existing partners, which also include Changan and JAC. It is set to launch the M9, a full-size sports utility vehicle, with Seres at a price range of between RMB 500,000 and RMB 600,000 ($69,972-$83,966) on Dec. 26. 
• Aito, an EV brand set up by Huawei and Seres in December 2021, delivered nearly 19,000 vehicles in November on the back of strong order volume for its redesigned M7 crossover. It operated a network of 1,000 retail locations and service centers in 230 Chinese cities as of June. 
• Meanwhile, long-time rival Xiaomi is on track to launch its first EV model, the SU7, and is reportedly preparing showrooms for car sales with the first batch of display models expected to arrive early next year.

Xiaomi said on Tuesday that it had sacked three employees for “spreading rumors” about plans for its electric vehicle business, as the company also said it was planning legal action over photos of its first car model leaked online by two media outlets. For months, multiple reports have circulated on Chinese social media featuring unauthorized confidential information about the smartphone maker’s EV business.

Why it matters: The news comes as Xiaomi, known for its low-cost pricing advantage in the smartphone market, has captured growing attention from Chinese netizens due to speculation of an imminent launch of its inaugural EV model, potentially heightening competition in the already low-margin sector. 

Details: The three employees were found by the company to have spread inaccurate information without permission during conferences hosted by brokerages and investment firms, severely misleading the markets and disrupting operations at Xiaomi’s EV division, the company said in a post on the Chinese Twitter-like platform Weibo. 

• Xiaomi is taking legal action against the trio, who have been dismissed for breaching the company’s code of conduct. 
• In addition, the smartphone maker is taking legal measures against two Chinese media outlets over allegations that their employees leaked images of its upcoming EV and violated their non-disclosure agreements with Xiaomi. 
• The Beijing-headquartered tech giant said it will continue to take action to ascertain liability for the alleged wrongdoings, including leaks and rumor-spreading. 

Context: A research note recently circulated on the Chinese internet and obtained by financial news agency Jiemian published what it said was “key information” regarding Xiaomi’s first EV, naming some of the suppliers for components such as the head-up display. 

• Xiaomi is also rumored to be set to debut the car at a press conference on Dec. 28, an influencer with the handle “Dianwankeji” wrote earlier this month on social e-commerce app Xiaohongshu. The company later said (in Chinese) that it has not decided yet on the event date.
• On Nov. 15, images of Xiaomi’s first consumer car along with key specifications were posted online for public review, as required by China’s Ministry of Industry and Information Technology, TechNode has reported. 
• More information revealed by China’s industry ministry last week showed that the premium version of the SU7 sedan will have a driving range of 800 kilometers, powered by a 101 kilowatt-hour (kWh) battery pack sourced from CATL. 

Chinese EV brand Zeekr on Thursday announced the launch of a fast-charging, affordable, lithium iron phosphate (LFP) battery capable of running 500 kilometers (310 miles) on a 10-minute charge, becoming the latest automaker to seek more self-reliance and better cost control over the critical EV component.

Claiming to be the world’s first LFP battery with an 800-volt electrical system for fast charging, the so-called Gold Brick battery features a faster recharging speed than some of the most advanced offerings from established battery suppliers such as CATL and BYD. CATL’s latest Shenxing battery adds 400 km on a 10-minute charge. 

The decision by Zeekr to make its own EV batteries is one of the clearest examples of the Geely-owned brand’s determination to have greater control over its EVs’ core technologies, Chief Executive Andy An told a press conference in the eastern city of Quzhou on Thursday. 

Here’s what Zeekr’s management said about the battery and its production plan: 

Gold Brick battery: The blade-shaped LFP battery will be first equipped for the entry-level version of the Zeekr 007, the brand’s first battery electric sedan with a pre-sale price of RMB 224,900 ($31,059), offering a driving range of 688 km on a single charge. 

• Zeekr’s new batteries have a cell-level energy density of 250 watt-hours per kilogram (Wh/kg) and reach 128 Wh/kg at a system level. The company said it can fit more battery cells into a given space, which enables more energy density and requires fewer connection components. 
• For comparison, CATL’s other most recent battery, Qilin – which is packed with more expensive nickel and cobalt-based cells – reaches 255 Wh/kg at a system level and can power an EV for 1,000 km. The next-generation Qilin will give 500 km of range after 12 minutes of charge. 
• In what An described as a “very important” strategic partnership (our translation), Zeekr continues to source batteries from CATL. The long-range 007 sedan, offering a driving range of 870 km, will be powered by CATL’s nickel-manganese-cobalt (NMC) batteries.

Quzhou production base: The Quzhou factory, which also produces NMC batteries for other Geely-owned marques such as Smart and Galaxy, will have an annual capacity of 24 gigawatt-hours (GWh) next year. This will allow the automaker to achieve an annual production run rate of 840,000 EVs. 

• An mentioned the likelihood of supplying the battery type and module assembly to other Geely-affiliated brands, especially those that share the SEA vehicle platform Zeekr builds its cars on, as well as rivals’ models. 
• The facility started operations last month after being constructed in 15 months. The company is targeting a yield rate, which measures the number of satisfactory units coming out of all produced items, of 93% in Quzhou, Vice President Xie Shibin told reporters during an interview on Thursday. 
• Zeekr’s parent company Geely, which owns the facility, has deployed a set of solar arrays on the rooftop with a long-term goal of making it a zero-carbon plant, the executives added.

Context: Geely is the latest in a range of Chinese automakers from GAC to Changan that has turned to making its own electric vehicle batteries in order to lower production costs and gain control over its supply chain. An original equipment manufacturer (OEM) could recover its investment and make a profit if it produces more than 15 GWh worth of batteries, McKinsey & Company has estimated.

• The global EV battery market is currently led by CATL, with the Chinese giant accounting for more than a third of the market from January to October, according to figures compiled by industry tracker SNE Research.
• Among automakers, BYD made an early bet on in-house battery making, launching its blade-shaped LFP batteries in 2020 and recording shipment of 87.5 GWh during the first nine months of this year.
• Zeekr has been partnering with CATL, with the latter’s Qilin battery first equipped by the Zeekr 009 luxury van and the completion of a $750 million financing round partly backed by the battery giant early this year.
• The EV brand filed for an initial public offering in New York last December in the hope of raising more than $1 billion at a valuation of more than $10 billion. It has also made a foray into the European market, currently selling EVs in the Netherlands and Sweden.

Volkswagen’s software unit Cariad and Chinese auto tech startup Horizon Robotics expect to recruit 300 employees by the end of this month for a newly established joint venture called Carizon, in an effort to meet growing local demand for advanced driving technology. 

Why it matters: The hiring spree marks the German auto major’s latest effort to develop its own in-vehicle software following an announcement last year of a $2.3 billion investment deal for a 60% stake in the JV in partnership with Horizon. 

Details: The two companies have not officially provided details of the recruitment plan, but Horizon’s co-founder and technology chief Huang Chang, leading a team of more than 100 engineers, has reportedly joined the JV. 

• Su Jing, a former head of Huawei’s autonomous driving team who has been on board at Horizon since earlier this year, will lead the development of advanced driving systems based on Horizon’s next-generation computing solution Journey 6. 
• Beijing-headquartered Carizon was officially set up on Nov. 20 with a registered capital of RMB 6.8 ($940 million), with VW and Horizon taking 60% and 40% stakes in the entity respectively, according to Chinese corporate data site Tianyancha.
• The JV will focus on rolling out automated driving technology powered by Horizon’s Journey series processors and integrated into VW’s upcoming battery EVs in China, according to an announcement dated Dec. 8. 
• VW and Horizon are on track to deliver their first collaborative development effort as early as 2025, Cariad China’s chief executive Chang Qing told Chinese reporters last month. This will allow VW vehicles to function independently on Chinese highways and certain urban streets, a feature popular with Chinese consumers.

Context: VW has made a series of moves to step up the pace of its software development for the Chinese market, including a $700 million deal for a 5% stake in Chinese EV maker Xpeng Motors unveiled in July.

• The German carmaker is also forming a JV with China’s ThunderSoft to improve its infotainment systems and car cockpits, Reuters reported in April, while partnering with smartphone maker Vivo on a similar effort.
• VW sold roughly 2.3 million cars in China for the first nine months of 2023, recording a year-on-year decline of 3%, of which roughly 117,100 units were EVs, up 3.9% from a year ago. It delivered 341,100 EVs in Europe over the same period, an increase of 60.9% from last year.
• Horizon said in April it has shipped more than 3 million computing solutions for over 120 car models from prominent Chinese automakers ranging from BYD to Geely. Self-driving startups such as Pony.ai and Qcraft are developing assisted driving technology based on its processors.
• US chip powerhouse Nvidia is also ramping up its self-driving car efforts in China with plans to expand its workforce locally after recently hiring Wu Xinzhou, a former vice president at Xpeng Motors, TechNode has reported.
• Speaking to Chinese media outlet LatePost in July, Wu said that foreign companies would need to establish research and development teams of “at least several hundred people” locally to be able to compete with Chinese carmakers and self-driving car companies (our translation).

Tesla is preparing for a major expansion of the Gigafactory Shanghai, its core electric vehicle production facility in China, in a move that looks set to enable the US automaker to bring out its long-rumored budget compact hatchback, local media has reported. 

The company is also said to be readying to supply Chinese clients with its large-scale utility batteries known as Megapacks from next year, having begun searching for a head of local sales. The availability of the Megapack in China will step up the pace of Tesla’s entry into the country’s energy storage market.

Why it matters: The news comes after Tesla CEO Elon Musk had dinner with Chinese president Xi Jinping, alongside other American company executives, on the sidelines of the Asia-Pacific Economic Cooperation Summit in San Francisco on Nov. 15. 

• In a statement published on the Chinese Twitter-like platform Weibo the next day, Tesla said it looked forward to joint developments with China in areas such as green energy vehicles, energy storage, and artificial intelligence, citing Xi’s support for Tesla’s operations in the country. 
• The moves are expected to help Tesla almost double its local production capacity and diversify its revenue sources at a time when the EV giant sees slowing sales due to growing competition from domestic players. 

Details: The so-called phase-three expansion could facilitate the production of Tesla’s upcoming car, dubbed the “Model 2” or “Model Q” with a price tag as low as RMB 150,000 ($21,800), people with knowledge of the matter told LatePost on Wednesday. 

• The expansion was put on ice early this year, according to a Jan. 12 report by Bloomberg, after apparent concerns from the Chinese government over data security issues related to Starlink, the satellite internet unit of SpaceX, Elon Musk’s rocket company. 
• Details of the plan remain unclear, but if it proceeds, Tesla is expected to be able to nearly double its manufacturing capacity in China to 2 million EVs a year. Analysts expect volume production of the lower-priced, next-gen Tesla vehicle no earlier than 2025.
• Meanwhile, Tesla in April announced plans to build a new facility in Shanghai – capable of making 10,000 large-scale, energy-storage battery systems, or 40 gigawatt-hours-worth (GWh) of the Megapack – scheduled to commence operations in the second quarter of 2024. 
• Sources told LatePost that the China-manufactured Megapack batteries will be delivered locally and overseas. 

Context: Tesla sold 771,171 China-made EVs in the first 10 months of the year, up 39% from a year ago, of which 308,816 were overseas exports, according to figures compiled by the China Passenger Car Association (CPCA). The annual growth rate saw a drop compared to 50.3% last year. 

• The US firm said in January that it deployed 6.5 GWh of energy storage in 2022, representing year-on-year growth of 64%. It estimated that the world requires a total capacity of 2,310 GWh per year of electric-chemical battery storage systems such as the Megapack in order to achieve a 100% global clean energy transition, according to estimates from the EV maker’s Master Plan 3.

Major Chinese electric vehicle makers from BYD to Xpeng Motors have collectively posted strong delivery figures in November as they attempt to hit their annual targets and as competition shows no signs of subsiding in the world’s biggest auto market. 

Why it matters: Jefferies analysts wrote in a Dec. 1 note that they estimated sales of China’s new energy vehicles (NEVs), mostly all-electrics and plug-in hybrids, to reach 1 million units in November with a solid month-on-month growth rate of 10% from a high base. 

• However, analysts warned of an intensified price war as 2023 comes to a close, as major EV brands including BYD and Li Auto have either cut prices or increased the royalties for customers since late November to boost year-end sales. 

Details: BYD on Dec. 1 revealed monthly sales figures of its premium Fangchengbao and Yangwang marques for the first time following their launches earlier this year, announcing it handed over 626 and 408 units to customers, respectively. Delivery of the RMB 1 million ($150,000) Yangwang U8 and the Bao 5, with a price range of RMB 289,800 to RMB 352,800, began in late September and November separately. Overall, the EV giant outsold its October figures by 70 units in November. 

• Geely’s NEV sales increased 4.7% month-on-month to 65,034 units last month thanks to a wide product portfolio under a multi-brand strategy. Volvo’s parent said it delivered 13,770 units under the Galaxy marque and 13,104 Zeekr-branded battery EVs, while sales of its Lynk & Co 08 extended-range hybrid EV surpassed the 10,000 mark over the month. The numbers of GAC’s Aion and Great Wall Motor rose 0.15% and 0.23% from a month previously, respectively. 
• Huawei-backed Aito posted its best-ever month by delivering 18,827 units, which is nearly 50% higher than its deliveries in October and surpassed the top end of the guidance provided by Huawei’s head of consumer business group a week ago. The number is expected to exceed 23,000 this month and to hit 30,000 in January, as the EV maker said it has secured more than 100,000 non-refundable orders for the revamped M7 crossover over the last two months or so.
• Growth momentum has been sustained for both Li Auto and Xpeng Motors which once again reported record-setting deliveries of 41,030 and 20,041 vehicles last month respectively. Li Auto’s founder Li Xiang said it is aiming for deliveries of 50,000 EVs this month, while Xpeng on Nov. 15 forecasted the fourth quarter delivery of up to 63,500 units. NIO‘s November delivery of 15,959 vehicles is basically flat from the previous month. 

Context: China’s NEV sales were partly boosted by the opening of the annual Auto Guangzhou show on Nov. 17 with dozens of debuts of all-new cars, as major players try to enhance their presence among a crowded field. 

• More than 5.9 million NEVs were sold during the first ten months of this year, representing a year-on-year growth of 34.2% and accounting for 34.1% of total car sales in China, according to figures from the China Passenger Car Association. 
• Miao Wei, former minister of Industry and Information Technology, expects the NEV penetration rate to exceed 50% of all new car sales as early as 2025. That would be 10 years ahead of Beijing’s schedule. Miao made the comment on Nov. 29 during this year’s China Automotive Industry Forum, reported media outlet The Paper.

More Chinese automakers are planning to adopt NIO’s battery swap technology as two giants join the program – Changan and Geely. NIO on Wednesday said it will partner with Geely to develop a common standard for electric vehicle battery packs and create a sprawling network of swap stations for both consumer cars and commercial fleets, just a week after Changan said it had become NIO’s first ally in a similar effort. 

The move could give a further boost to NIO’s long-term plan to split its money-losing recharging infrastructure unit into a standalone business with financing from outside investors, two people with knowledge of the matter told TechNode on Wednesday. Meanwhile, Geely and NIO will explore the possibility of establishing a shared battery swap network in overseas markets, said one of the people, without elaborating further. 

NIO and Geely declined to comment when contacted by TechNode on Thursday, referring instead to the announcement published by the two companies.

Car industry experts foresee the acceleration of the Chinese EV industry’s migration to a more unified standard for battery specifications and swap techniques originated by NIO. Still, the EV maker and its bigger allies could face a bumpy road despite their eagerness for a unified swapping standard until a number of business and technical hurdles are cleared. 

A common standard? 

It is clear that Chinese authorities are behind the move given that Changan is state-owned and given Geely’s position as the poster child for the Chinese privately-owned car industry, said Lei Xing, former chief editor at China Auto Review. Xing expects no real progress to be made within the next 12-18 months given the challenges in achieving a clear consensus for designing new batteries compatible with their recharging networks. 

A market-wide standardization may also not happen without government intervention. It’s one thing to require a certain plug type, and quite another to force standardization of batteries and chassis configuration, said Daniel J. Kollar, head of automotive and supply chain at business development consultancy Intralink Group. 

“This could have major effects on several design aspects and possibly even lead to certain limits on innovation and supplier choice,” Kollar added.

NIO may also find the need for considerable back and forth with its partners in order to get its swap technology closer to becoming the industry standard. It’s going to be NIO dictating its intellectual property to swapping partners, but Geely and Changan may want to have a say as well, said Tu T. Le, founder of business intelligence firm Sino Auto Insights. 

“There’s a lot that needs to be settled still,” Le added, citing Geely running its own swapping system as one reason. Volvo’s parent began operating its first battery swap station for commercial fleets in the southwestern municipality of Chongqing in late 2020, with plans to run 300 more by the end of this year.

A big relief?

Although it is too early to predict where NIO’s power business may end up, it is possible that a new entity jointly invested in by NIO and multiple other carmakers could be in play – something akin to what Huawei recently announced for its vehicle business unit, according to Xing. “This would ease the financial pressure on NIO and make them de facto outside investors of the startup.” 

The partnership would probably shoulder some of the investment burden for NIO with cash injections, although it may not help them sell cars, Le said. The increase in adoption of swapping will likely result in short-term improvements to their bottom line, but the big question is if it will result in more vehicle sales. 

The Shanghai-headquartered EV maker has built up a nationwide network of more than 2,100 swap stations, each reportedly costing more than RMB 3 million ($420,000) on average. That number is expected to surpass 2,300 by year-end. It delivered 126,067 vehicles for the first ten months of this year, in line with the industry’s average growth rate but lagging behind rivals such as Li Auto. 

“It’s hard to see how this is going to change NIO’s fortunes in the long run to a significant degree without added help from their new partners – either via providing a boost to their marketing reach or supporting the development of mid-market solutions,” said Kollar.

Huawei is spinning off its automotive business unit, enabling Changan Automobile and other manufacturing partners to invest, in a move aimed at turning the loss-making car division into a profitable operation amid fierce competition. 

Why it matters: The reorganization is a rare move for Huawei – a company under 100% ownership of founder Ren Zhengfei and its staff since 2003, according to its official website – as the Chinese telecommunication giant puts a date of 2025 on its target of profitability for its as-yet loss-making auto business. 

• Deemed by Citic Securities analysts as “a milestone” for the Chinese auto industry, the move is expected to help Huawei court new industry allies and gain investment to pursue intelligent vehicle technology. Established automakers such as SAIC have reportedly voiced concern about Huawei’s move into electric cars. 
• The equity structure of the new entity may be comparable to that of the United Automotive Electronic Systems, a joint venture formed by German auto supplier Bosch and several Chinese carmakers including SAIC, FAW, and Dongfeng in 1995. This would allow more automakers to benefit from collaboration, and not just Changan, analysts wrote in a Nov. 26 note. 

Details: The new joint venture will focus on areas already covered by Huawei’s Intelligent Automotive Solution (IAS) business unit, including the development of intelligent driving software, digital cockpit systems, and digital platforms, among others, according to a regulatory filing published by Shenzhen-listed Changan dated on Monday. 

• Huawei will take at least a 60% stake in the new entity but will no longer directly compete against the new company in principle. Changan and its relevant parties will acquire no more than a 40% stake in the JV. The two companies plan to discuss the details of the transaction and sign an agreement within six months, the filing said. 
• The establishment of the new entity will have no impact on the ongoing collaboration between Huawei and Chinese car manufacturer Seres, according to a Nov. 26 statement. Seres, which makes Aito-branded EVs for Huawei, added it has been asked to participate in the investment and is in discussions to jointly develop intelligent electric vehicle architecture.
• The entity will prioritize diversified ownership, said the filing. It is anticipated that various parties will engage deeply in the development of the open vehicle platform, said Richard Yu, CEO of Huawei’s consumer business group and chairman of the IAS BU, who compared the platform to “a train engine.” 

Context: Huawei, state-owned Changan and Chinese battery maker CATL announced a partnership to establish EV brand Avatr back in late 2020. The companies have sold roughly 20,000 units of the Avatr 11 battery electric crossover since delivery began last December, launching their second premium model with a starting price of RMB 300,800 ($41,240) earlier this month. 

• Huawei has also been selling EVs since mid-2021 with lesser-known Seres, formerly the Chongqing Sokon Industrial Group, followed by the launch of the first Aito-branded EV last September. Huawei said in early October that it had secured more than 50,000 non-refundable orders for the redesigned version of the M7, Aito’s second model, less than a month after its launch. That number was updated to more than 100,000 as of Monday.
• The Chinese tech giant is also partnering with domestic manufacturers Chery, BAIC, and JAC, showcasing the first model under the new Luxeed marque jointly set up with Jaguar Land Rover’s manufacturing partner Chery on Nov. 9. The Luxeed S7 sedan will be officially launched on Tuesday and the respective new models co-built with BAIC and JAC are set to hit the market in 2024. 
• Huawei reportedly invested $1 billion in its automotive business in 2021 and has since maintained its push into the Chinese intelligent EV market in an effort to diversify its revenue sources and offset the impact on its core businesses from US trade restrictions. The IAS BU recorded revenue of RMB 1 billion during the first half of this year, accounting for around 0.3% of its total revenue. 

READ MORE: Xpeng and Huawei-backed EV maker set new delivery records as demand grows for self-driving tech

A Tesla car owner who protested against the company during the Auto Shanghai show in early 2021 has been forced to apologize for damaging the US car company’s reputation by alleging that Tesla sold defective cars, Chinese media outlets reported on Wednesday. 

Why it matters: The verdict marks the latest victory for Tesla in China after it faced mounting numbers of car owner complaints over various quality issues including unintended acceleration and brake failure in the past two years. 

• Among infamous cases are the woman who climbed onto the top of one of Tesla’s electric vehicles at the Auto Shanghai show in April 2021, and an accident resulting in two deaths and three injuries in southern China last November.

Details: A local court on Nov. 9 ordered a woman surnamed Li from the northwestern city of Xi’an to apologize to Tesla and pay the company RMB 2,000 in damages in addition to bearing the cost of vehicle appraisal totaling RMB 20,000 ($2,800). The public apology should remain on social media platform Weibo for at least 15 days, the court ruled.

• The female owner alleged faulty brakes caused an incident in March 2021 when her China-made Model 3 crashed into a car coming the other way in the capital of Shaanxi province. Tesla has denied the claim. 
• Li took part in a protest at the Tesla booth during that year’s Auto Shanghai show when she wore a white T-shirt with the words “brake failure” above a Tesla logo. Another female car owner surnamed Zhang then clambered atop a Tesla to express her anger. 
• The Chinese court required a third-party appraiser to conduct systematic inspections of the vehicle after Tesla filed a lawsuit against Li for defamation. The result showed no proof that any mechanical failure had contributed to the accident. 
• A company representative confirmed the news to Caixin on Wednesday, saying the automaker was attempting to appeal for higher compensation. It is also suing Zhang for damaging its reputation without taking further steps, as she rejected a third-party investigation of her car. 

Context: Tesla in May launched a recall involving over 1.1 million EVs in China following an investigation by Chinese regulators that showed Tesla owners could hit the accelerator pedal rather than the brake by mistake when its regenerative braking system was switched on by default. Beijing said the recall was intended to reduce the chance of accidents. 

• The US carmaker shipped 771,171 vehicles from its Shanghai gigafactory during the first ten months of this year, of which 462,355 were for domestic sales, a growth of 37.9% from a year earlier, according to figures from the China Passenger Car Association. Retail sales of new energy vehicles in China, mostly battery EVs and plug-in hybrids, increased 34.2% year-on-year to more than 5.9 million units over the same period, the CPCA figures showed. 

GAC Group and Changan Automobile, two of China’s biggest automakers by sales volume, detailed their respective timelines to manufacture solid-state batteries on Nov. 17, entering a global competition to bring the potentially transformative technology to play in electric vehicles (EVs). 

The moves resonate in an industry that has long attempted to commercialize the technology, widely seen as a next-generation energy storage device because of its superior performance and safety compared with the current batch of liquid-state electrolyte lithium-ion batteries. Several international carmakers have bet on solid-state batteries, with leading promoter Toyota reportedly projecting adoption by 2027. 

The news also indicates a growing trend among automakers of developing their own batteries, parts that comprise at least 40% of overall vehicle costs, to establish a self-sufficient supply chain. “Few companies have so far profited from making new energy vehicles [mostly battery EVs and plug-in hybrid EVs in China],” said Changan president Wang Jun during a press conference, citing a goal of achieving “sustainable, high-quality development” (our translation). 

Here’s what the two automakers said on Nov. 17 during the ongoing Auto Guangzhou show in southern China’s Guangdong province.

GAC: The Guangzhou-headquartered automaker is hoping to see an EV in production with its own in-house developed solid-state batteries as early as 2026. For now, the batteries have achieved a cell-level energy density of 400 watt-hours per kilogram (Wh/kg) and have proven effective under extreme conditions, according to an announcement. By comparison, the maximum energy density of CATL’s latest Qilin battery is 255 Wh/kg (per pack level).

• The state-owned manufacturer added that it is working on several other new battery types including cobalt-free and sodium-ion packs, without revealing further details.
• Meanwhile, the Chinese partner of Toyota and Honda expects its first wholly-owned battery plant to start rolling out conventional lithium-ion batteries later this month. The RMB 10.9 billion ($1.5 billion) plant, Guangzhou’s biggest ever, will produce an annual capacity of 36 gigawatt hours (GWh) by 2025, enough for 600,000 EVs. 

Changan: China’s fifth largest automaker’s plans include commercializing its first solid-state batteries by 2027 at a cell-level energy density of up to 500 Wh/kg, while large-scale vehicle application is scheduled for 2030 with the launch of several new battery products, said president Wang.

• As part of an RMB 10 billion investment plan, the Chongqing-based manufacturer will more than double its number of research and development employees from 1,200 to 3,000 by next year. It has also set its sights on making lithium-sulfur and other new battery types next decade.
• Ford’s manufacturing partner also projected its timeline for mass-producing lithium-ion batteries, starting as soon as next year. The product features a design in which battery cells are integrated directly with the vehicle body rather than segmented into several modules. This technology has enabled CATL’s Qilin batteries to promise a driving range of over 1,000 kilometers (621 miles) on a single charge. 

Context: Established automakers worldwide have been rushing to get solid-state batteries commercially ready for their green energy cars, which is intended to give them an upper hand as they navigate increasing competition in the global EV market. 

• In addition to Toyota, Nissan plans to launch a production EV with a solid-state battery pack by 2028 and BMW by 2030. China’s SAIC said in May that it has increased its investment in local battery startup Qingtao as part of its ambitious goal to sell 100,000 EVs with solid-state batteries in 2025.
• CATL in April unveiled a so-called condensed matter battery, a semi-solid state product using a condensed electrolyte, with plans to start mass production for aviation by year-end, Reuters has reported. The battery giant controls more than a third of the global market, according to figures compiled by South Korea’s SNE Research on Nov. 7. 
• The world’s second-biggest battery maker by shipment, BYD initiated its battery efforts two decades ago and accounted for 15.8% of global EV battery sales in the first nine months of 2023. Having benefited from its vertically integrated supply chain, the EV giant recorded a net income of RMB 10.4 billion in the past quarter.
• ​​A solid-state battery uses a solid electrolyte instead of liquid electrolytes, boasting a theoretically higher thermal stability and energy density than existing offerings. However, the batteries still suffer interface instability between electrodes and solid-state electrolytes, among other design issues.

As automakers continue their struggle amid an unrelenting price war in China, both established brands and startups are showcasing their latest products at the Auto Guangzhou 2023 show in a bid to take pole position ahead of what promises to be another year of tight competition. 

Traditionally one of the country’s largest car shows, this year’s Auto Guangzhou offers a glimpse of how intense competition in China has been, and how successful it has been at flushing out weaker foreign marques as domestic rivals fall over one another in a mad rush to crack the market. 

“Joint car manufacturers are faced with unprecedented challenges against the backdrop of the current situation,” said Wen Dali, a deputy general manager of GAC-Toyota, a joint venture between the Japanese automaker and its Chinese partner (our translation). More than 20% of the JV’s new car sales over the next three years in China are set to be new energy vehicles, mostly battery-run electric vehicles (BEVs) and plug-in hybrid EVs (PHEVs), Wen added at a press event on Friday. 

Here’s a quick roundup of some of the highlights from the Guangzhou International Automobile Exhibition, which kicked off on Friday in the capital of China’s Guangdong province. 

BYD – Sea Lion 07

The BYD Ocean family of electric cars on Friday welcomed a new sibling and its latest answer to the Tesla Model Y, the Sea Lion 07, crafted by Wolfgang Josef Egger, BYD’s design chief and a former head designer at Audi Group. 

The mid-size crossover boasts distinctive design elements with its muscular fenders, bold air inlets, and clean character lines on all four corners, while the high shoulder lines and the dual, through-type waistlines give the vehicle a sporty vibe. The features are intended to make the car look unique from miles away, Fan Jihan, a deputy director of BYD said on Friday during the show.

Slightly larger than Tesla’s Model Y at 4.8 meters in length and with a 2,900-millimeter-long wheelbase, the top-end all-electric car is expected to have a driving range of more than 700 kilometers (435 miles), compared with the 688 km claimed by the long-range version of its US rival. Scheduled for official launch later this year, it will be equipped with BYD’s latest advanced driver assistance system (ADAS), according to the company.

Geely – Zeekr 007 

This year’s Auto Guangzhou saw the debut of the long-awaited Zeekr 007, the first electric sedan under the premium marque of auto major Geely. 

The latest model from Stefan Sielaff, formerly a head of design at Bentley, the 4.9-meter-long all-electric vehicle comes with 1,711 high-intensity lamp beads powered by 75 automotive chips. This enables the car’s LED headlights to display a dazzling, customized lighting sequence with animation about 90 inches wide, showcasing some of the most advanced lighting technology by a Chinese carmaker. 

Meanwhile, the Zeekr 007 features an 800-volt battery system, which offers a driving range of up to 870 km on a full charge and can travel another 610 km on 15 minutes’ extra charge. Zeeker claims it to be the quickest accelerating road car of the same class ever made, going from 0 to 100 km/h (62 mph) in 2.84 seconds, while also being one of the earliest models to use Qualcomm’s latest 5-nanometer cockpit chip 8295. 

The company aims to begin delivering the car in January at a lower-than-expected pre-sale starting price of RMB 224,900 ($31,059). 

Xpeng Motors – X9

Xpeng on Friday was on its home court when it unveiled details of its first flagship multi-purpose vehicle (MPV) the X9, which the Guangzhou-headquartered electric vehicle maker expects will stand out from existing offerings with superior comfort and top-notch performance. 

With a competitive pre-sale starting price of RMB 388,000 ($53,544), the seven-seater has a claimed interior space of 7.7 square meters, which makes it 12% bigger than the Toyota Alphard, a worldwide top-seller in the chauffeur-driven luxury people mover category, according to chief executive He Xiaopeng. 

The family van is also said to have the best third-row seats on the market that can be adjusted for recline to a desired angle of nearly 180 degrees and folded down flat to increase cargo capacity. Meanwhile, the luggage compartment offers space for seven suitcases. 

The Xpeng X9 is claimed to be the world’s first MPV equipped with rear-wheel steering as a standard configuration, which reduces the car’s turning diameter to an industry record of 10.8 meters (35.4 feet), making it easy to maneuver. 

Li Auto – Mega

Li Auto has finally made available the details of its long-anticipated MPV, the Mega, with an exterior echoing the bullet-style look of China’s high-speed trains. The seven-seater van boasts the world’s fastest charging speed among electric vehicles of all kinds, capable of traveling up to 500 km on 12 minutes of charge powered by CATL’s next-iteration Qilin batteries. 

It has a drag coefficient (Cd) of 0.215, which the company claimed is the lowest Cd rating for an MPV, while it will consume 15.9 kilowatts (kWh) of electricity for every 100 km of travel, also among the lowest in the industry. 

The company, which has delivered more than 500,000 plug-in hybrid SUVs as of September, confirmed plans to build 300 supercharging stations in China by year-end. Pre-sales of the Mega started on Friday with a price tag of around RMB 600,000 ($82,800) and delivery scheduled for February 2024.

READ MORE: Chinese carmakers showed up big time at Auto Shanghai 2023

Images of what could be Xiaomi’s first electric vehicle model have leaked online ahead of the car’s expected launch next year. The photos from the Chinese Ministry of Industry and Information Technology show a large sedan with styling similar to the Porsche Taycan, adorned with a Xiaomi logo. 

Why it matters: Automakers are required by Chinese regulators to apply for registration before officially selling vehicles in the country, and the government ministry’s post indicates that the debut of the first Xiaomi car is approaching. 

• Xiaomi has begun trial production of its first EV at its facility on the outskirts of Beijing, with the vehicle expected to hit the market as early as February, a person with knowledge of the matter told Chinese media outlet National Business Daily on Wednesday. 
• A Xiaomi representative declined to comment when contacted by TechNode on Thursday, but in late October, chief executive Lei Jun reaffirmed the company’s plan for the car to go on sale in the first half of 2024, according to an Oct. 25 post published on the Twitter-like platform Weibo. 

Details: The Xiaomi SU7 is around five meters long and spans a 3,000-millimeter-long wheelbase, making it bigger than many mid-size sedans such as Tesla’s Model 3. It has a total mass of 2,430 kg and a curb weight of 1,980 kg, based on the registration details revealed by the MIIT on Wednesday. 

• The car features a sleek, athletic low profile with Xiaomi’s logo on the front and its name on the rear hatch, similar to the Porsche Taycan, a likeness brought to light by a Chinese auto influencer. The images also show a couple of wheel options and a choice of yellow brake calipers.
• The SU7 will be able to reach a top speed of 210 kilometers per hour on a relatively affordable, iron-based lithium-ion battery from BYD. The top speed of the premium SU7 Max will be 265 km/h, with the higher-end model equipped with a more expensive, nickel and cobalt-based battery pack from CATL. 
• An electric motor will provide a power output of 275 kW and 220 kW respectively, while the top-end version will integrate laser sensor units on the roof to enable partially autonomous driving capabilities, according to images released by MIIT.
• The five-seater sedan will be manufactured at Xiaomi’s factory in the Beijing Economic and Technological Development Zone, which has an initial annual capacity of 150,000 units, although its production application was filed in the name of a subsidiary of state-owned automaker BAIC.
• This appears to confirm speculation that BAIC, a manufacturing partner of Mercedes-Benz in China, has joined hands with Xiaomi, meaning the smartphone maker is still waiting for final approval to begin manufacture from the Chinese authorities. 

Context: Xiaomi and Huawei are among the Chinese technology giants with the potential to become major players in the EV space with advanced intelligent capabilities and a broad sales network, which remain difficult for many carmakers to replicate, Morgan Stanley analyst Tim Hsiao commented on an earnings call held by Xpeng Motors on Wednesday. 

• Huawei said on Oct. 6 that it had secured over 50,000 non-refundable orders for the revamped M7 sports utility vehicle less than a month after its launch. The number was updated to more than 90,000 as of Wednesday, local media outlet IT Home reported. 
• The telecoms giant started pre-sales of the first electric sedan under the new Luxeed brand with automaker Chery on Nov. 9, followed the next day by the launch of the Avatr 12, a premium crossover co-developed with partners Changan Automobile and CATL. 

READ MORE: Five things to know about Xiaomi’s new electric car company

Huawei on Thursday revealed its first electric sedan under the new Luxeed marque in collaboration with automaker Chery, saying it will compete with Tesla and Mercedes Benz’s premium offerings at a price comparable to the cheapest models of its international rivals.

“After some deliberation, we will make all versions of the Luxeed S7 available for purchase despite making a loss,” Richard Yu, the chief executive of Huawei’s consumer business group, told the media during a press conference in Shenzhen (our translation). This will allow more customers to try Huawei’s smart vehicle technology at an affordable price, said Yu.

The aggressive pricing strategy unveiled at the Luxeed S7’s launch marks the latest push by the Chinese technology giant to crack the world’s biggest and most competitive electric vehicle market. Huawei hopes it will be a new revenue source to offset the negative impact of US restrictions on its smartphone business. 

Here’s what we know about the newly-launched Luxeed S7 sedan:

Pricing: The sedan comes at a minimum price of RMB 258,000 ($35,381), RMB 2,000 lower than Tesla’s entry-level Model 3 in China. Pre-sale started on Thursday and the official launch is scheduled for Nov. 28.

Automated driving: The Huawei-Chery electric sedan is the first model to use the tech giant’s latest proprietary Harmony operating system. Its autonomous valet parking feature enables the car to park itself in lots and then return to a designated spot using a remote-control assisted function.

The premium versions of the Luxeed S7 will include Huawei’s laser sensor units and its Advanced Driving System (ADS) that uses deep learning networks and computer vision algorithms, including one called the General Obstacle Detection network, for navigating its surroundings. 

Huawei has claimed its partially autonomous driving technology will be accessible on major city roads across China by the end of the year, potentially ahead of rivals including Xpeng Motors. 

Main specs: Yu specifically identified Tesla’s Model S as Huawei’s major competitor, claiming that Huawei and Chery’s full-size luxury sedan outperformed its rival’s in terms of range, energy efficiency, and luxury. 

The top-end Luxeed S7 will have a driving range of more than 800 kilometers (497 miles) and be capable of driving another 400 km on 15 minutes of supercharging using Huawei’s facilities. By comparison, the dual-motor Tesla Model S has a 715 km range and can add 347 km in 15 minutes. 

The car also impresses with high energy efficiency, consuming an estimated 12.4 kWh per 100 km, compared with 13.2 kWh and 17.5 kWh achieved by the rear-drive Model 3 and the dual-motor Model S respectively. “This is far ahead of our rivals,” said Yu, using a phrase that has become a Huawei-related buzzword on the Chinese internet. 

The S7 slightly beats out the Model S with a drag coefficient of 0.203. Meanwhile, it offers a 0 to 100 km/h (62mph) acceleration of 3.3 seconds, just under the 3.1 seconds reported by the Model S performance version but faster than the Porsche Taycan 4S, according to Yu. 

Interior: The sleek, aerodynamically favorable sedan boasts of a larger cabin space than its major luxury competitors with an interior length of 1,910 mm. The Mercedes E300L and the Tesla Model S measure 1,898mm and 1,816mm in interior length respectively, according to figures cited by Huawei during the press conference. 

The S7 also comes with a sporty design concept for the inside, featuring a wide dashboard, a 12.3-inch smart screen, as well as an oval-shaped steering wheel, allowing drivers to see the whole display, rather than having to view it through the steering wheel. 

In addition, it has adopted so-called zero gravity seat technology for the front passenger seat. This allows the human body to take on a neutral spinal posture, reducing the amount of stress placed on bones and joints, while the backs of the rear seats are heated, ventilated, and 27/32° adjustable.

READ MORE: Huawei-backed Aito now has 50,000 orders for its redesigned M7 model

Xpeng Motors said on Nov. 3 that it will offer some existing owners of its P5 sedan discounts on new purchases after hundreds of customers accused it of failing to deliver promised advanced driver assistance features, which were supposed to be available across the country. 

Why it matters: The complaints, which went viral on Chinese social media last week, mounted after Xpeng on Oct. 24 unveiled plans to roll out its latest advanced driver assistance system (ADAS), the XNGP, nationwide by next year. The company said it will be applicable to existing models including the G6, G9, and P7i, without mentioning the P5. 

Details: Xpeng said in a statement issued on Nov. 3 that it will offer an RMB 20,000 ($2,747) coupon for people who have subscribed to Xpilot, its previous generation driver-assist software, along with their purchases of the premium version of the P5 sedan. The benefit could be used for a new purchase of one of Xpeng’s most popular models, including the G6, G9, P7i, or its upcoming X9 van. 

• The announcement comes after more than 700 P5 owners recently published an open letter, obtained by National Business Daily, asking the company for an explanation as to why its partially autonomous feature for urban driving has remained unavailable to them in most domestic cities, despite the company’s promises.
• Xpeng further explained that the availability of its previous-generation ADAS feature “relies heavily on” high-definition maps, which has reportedly required automakers to secure approval for using mapping data in their vehicles, partly resulting in slow progress in adoption (our translation). 
• The EV startup released the so-called City Navigation Guided Pilot (NGP) function first to Xpilot users in the city of Guangzhou last September and has since expanded the adoption to five major cities including Beijing, Shanghai, and Shenzhen. 
• “We will strive for more new features and improved user experience, despite many challenges,” Xpeng said in the statement, adding that more functions will be available to P5 owners through over-the-air updates next year, including steering assist and more music streaming apps. 

Context: Xpeng began delivery of the P5 electric sedan back in October 2021, with its premium versions featuring two lidar sensors to facilitate more reliable automated driving functions at a price range of between RMB 199,900 and RMB 223,900 ($27,453-$30,749). It sold 19,618 units of the car over the last 12 months, according to figures from the auto services portal Dongchedi.

• The automaker is shifting to a more affordable approach for autonomous driving, which will reduce its reliance on technologies such as lidar and HD maps as part of a plan to roll out its XNGP system in 50 domestic cities by December. 
• The Xpilot system, formerly Xpeng’s rival to Tesla’s Autopilot system as reported by CNBC, is unavailable for driving scenarios without the support of HD maps, according to a Q&A document published by the company last November.

Chinese electric vehicle makers Xpeng Motors and Aito on Wednesday posted record-breaking figures for monthly deliveries, as the pace of adoption of self-driving technology accelerates among local customers despite slowing growth in China’s electric vehicle segment as a whole. 

Strong orders for Huawei, Xpeng, and DJI’s city NOA (Navigation on ADAS) products mark the start of the commercialization of smart driving, Jefferies analysts wrote in an Oct. 24 note. They added that Chinese automakers are becoming more willing to “test the waters” with chips by Huawei on some of their vehicles.

Why it matters: The latest figures highlight a brutal price war that has been continuing for months in the market, and the struggle automakers are facing in having to choose between lower prices or losing market share. 

• Xpeng in June unveiled the G6, its crossover answer to Tesla’s Model Y, at a price tag 20% lower than its US rival in China. Aito’s all-new M7 sports utility vehicle now costs RMB 40,000 ($5,468) less than the version launched a year ago.

Riding the self-driving boom: Xpeng Motors handed over 20,002 electric cars to customers in October, crossing the 20,000 unit milestone, nearly a threefold increase from a year ago and  31% growth from September. 

• Aito also reported a record delivery number of 12,700 units last month. The Huawei-backed brand does not report its delivery figures consistently, but its Shanghai-listed manufacturer Seres posted sales of 40,389 EVs for the first nine months of the year. 
• The two companies appear to have taken an early lead in an emerging battlefield for partially autonomous technology among consumer carmakers. More than half of the orders of Aito’s redesigned M7 SUV were placed for versions with Huawei’s Advanced Driving System, Chinese media outlet Caixin reported on Oct. 7, citing company insiders. 
• The Max versions of Xpeng’s G6 crossover, which features the company’s XNGP assisted driving technology, accounted for 70% of total orders in the first month after the launch, chief executive He Xiaopeng said in August. Both companies said their vehicles would be able to travel autonomously most of the time in dozens of major Chinese cities by the end of the year. 

EV startups: Li Auto also accomplished a delivery milestone last month, distributing 40,422 vehicles, making its year-to-date deliveries 284,647 units, the highest among the country’s nascent EV startups. The company has upped its goal to 50,000 units for the remaining two months of the year, CEO Li Xiang said on Wednesday on the Chinese Twitter-like platform Weibo.

• NIO’s October delivery of 16,074 units represented a 59.8% growth from this time last year and a slight 2.8% increase month over month. The company has delivered 126,067 vehicles as of October this year, still far from the annual goal of 245,000 units revealed by CEO William Li in March. It is now aiming for monthly delivery of more than 20,000 units in the fourth quarter of 2023. 
• Leapmotor’s delivery of 18,202 EVs last month comes after the Zhejiang-based EV maker recently announced a deal with European major Stellantis for a $1.6 billion war chest and turned its negative gross margin into a positive for the past quarter. Rival Hozon delivered 12,085 units, representing a decrease of 32.9% year-on-year and 8.5% month-on-month. 

Established majors: BYD’s growth momentum continued to some extent in October as the company saw sales surpassing 301,000 vehicles with a mild 5.2% rise from a month earlier. Analysts expect China’s biggest EV maker to achieve its annual goal of selling 3 million cars this year, as the company on Monday launched a wagon version of its popular Song SUV and readied to sell its long-anticipated Bao 5 off-roader.

• Sales for Aion declined 19.6% from a month earlier to 41,503 units, as the GAC subsidiary ramps up production of its new models, company insiders told financial media outlet CLS. Changan-affiliated Deepal delivered 15,513 vehicles in October, a 10.7% decrease from September. 
• Zeekr delivered 13,077 vehicles last month, up 29.2% from a year ago and 8.5% from September. On Aug. 11, the two-year-old premium EV brand, set up by Volvo parent Geely, cut the price of its 001 hatchback by up to RMB 37,000 to RMB 269,000 for a limited period until the end of this year. 
• Voyah saw its deliveries grow 21% on a monthly basis in October after the Dongfeng-backed EV maker launched its redesigned Free SUV in August, with the model arriving 15% cheaper than the previous version and equipped with Baidu’s advanced driver-assist system. 

Context: Retail sales of new energy passenger vehicles, including all-electrics and plug-in hybrids, are expected to reach 750,000 units in October, up 34.6% year-on-year and 0.9% month-on-month, according to estimates from the China Passenger Car Association. The past two months, known as “Golden September, Silver October,” are traditionally peak seasons for auto sales in China.

Chinese automaker Geely on Oct. 27 unveiled its biggest bet ever on intelligent vehicles with the launch of the first Jiyue-branded model, which the company says is capable of driving itself on busy urban streets in partnership with search engine Baidu. 

The automaker stated its vehicle relies heavily on a camera-based approach to capture detailed visual information and then respond appropriately, removing expensive laser sensors from its hardware suite to keep costs down. Tesla is reportedly a rare advocate for using the so-called vision-only approach, while most other brands opt for multiple sensors to mitigate safety concerns of their self-driving technologies. 

“I believe we provide users a better self-driving experience [than existing players] in most major Chinese cities,” Luo Gang, Jiyue’s chief operating officer, told reporters during an interview, adding that the Jiyue 01 outperforms Tesla’s offerings in digital services such as its AI assistant (our translation). Tesla’s full self-driving (FSD) function is currently unavailable in China. 

The Jiyue 01, a battery sports utility vehicle, comes in two versions with a price range between RMB 249,900 and RMB 339,900 ($34,148-$46,446), slightly lower than its pre-sale price and differing based on acceleration, driving range, and number of electric motors, among other specifications. Customers are also encouraged to pay RMB 19,900, a 60% cut from its sticker price, for all the premium functions of its self-driving software. 

Here are some of the news and highlights from the launch event held in Shanghai by Jiyue, formerly known as Jidu before Geely and Baidu set up a new venture in August. 

Self-driving tech: Jiyue said its advanced driver-assistance system, the Robo Drive Max, is already available to drivers in Shanghai, Hangzhou, and Shenzhen, meaning the cars can navigate complex urban streets in the three big cities with autonomous features such as overtaking, lane changing, and on-ramp/off-ramp driving. The firm is targeting nationwide availability for the software by 2024, which would mean it matched rival Xpeng. 

• Chief executive Joe Xia claimed the car could drive itself from point to point without many user interventions by using less costly high-definition maps and training multiple neural networks such as occupancy networks in big data sets, rather than relying on lidar. Rival Xpeng is also removing two radar sensors for its upcoming MPV model but retaining lidar technology for enhanced safety, TechNode has reported.
• The five-seater Jiyue 01 is equipped with 11 cameras and 17 ultrasonic sensors and radars. The company believes it is building public confidence in autonomous car safety, as Baidu has tested its autonomous car fleets without accidents for more than 70 million kilometers (43.5 million miles). Baidu has been handling various corner cases over the past decade, which greatly improves the safety of the system, said Luo. 

Smart cabin: The Jiyue 01 also boasts the most advanced voice recognition software on the market for in-car services, which can respond intelligently in milliseconds without losing its connection, as the company deploys artificial intelligence models and moves data analytics from cloud computers to the vehicle. The system is also set to evolve and become more alert to the needs of its owners, powered by Baidu’s ChatGPT-like chatbot, Ernie Bot. 

• Notably, the automaker is bringing voice activation outside the car, saying it is the world’s first model that allows autonomous valet parking via just a spoken command without the driver sitting in the car, from as far as two kilometers away, according to an announcement. A company employee demonstrated the feature with several reporters joined by TechNode in an indoor parking lot on the sidelines of the event. 
• Xia added that the vehicle’s in-car system is powered by Qualcomm’s most advanced smart cockpit computing platform, the SA8295, which provides a processing power of over 60 trillion operations per second (TOPS), compatible with that of flagship smartphones available on the market. This would allow users to play the hit racing game Asphalt with a 35.6-inch display across the dashboard, as would NIO owners do with their handsets and a smaller screen. 

READ MORE: Baidu’s EV firm Jidu aims to take on Tesla

Xpeng Motors teased how it sees the future of electric vehicles on Tuesday with the debut of its first multi-purpose vehicle model and a new timeline for the expansion of its self-driving software, as it faces an unprecedented offensive from major rivals like Huawei in a hotly competitive battleground.

Chief executive He Xiaopeng also revealed that the company has made significant progress in bringing flying cars closer to reality, while showcasing a working prototype of its humanoid robot, in a move reminiscent of Tesla’s introduction of its Optimus bot last September. 

Here are the key highlights from Xpeng’s annual 1024 Tech Day event. 

First MPV 

Navigating within a sharp and narrow turn at low speed on the stage at Tuesday’s event, Xpeng’s X9 is claimed to be the world’s first multi-purpose vehicle model equipped with rear-wheel steering as a standard configuration. This would allow the seven-seater, three-row van to handle “just like” a regular-sized sports utility vehicle, said He (our translation). 

Xpeng’s next-generation smart cabin system, the XOS, will also be available first to the owners of the X9, which is set to be formally launched at the upcoming Guangzhou Motor Show on Nov. 17. Powered by Qualcomm’s five-nanometer 8295 processor, the in-car software will offer a split screen mode, allowing drivers and passengers to run different applications simultaneously side-by-side for efficient multitasking.

Marking Xpeng’s entry into the Chinese MPV segment, the all-electric X9 will have to compete with an increasing number of similar offerings by established makers including BYD’s Denza brand, Great Wall Motor, and Dongfeng’s Voyah marque. Huawei-backed Aito and Li Auto are also set to launch their first MPVs later this year, targeting China’s growing three-generation families with larger interior car spaces.

Self-driving availability

Xpeng has also begun its switch to a more affordable hardware suite by removing some sensors from its incoming X9 model, betting more on cameras and artificial intelligence for its XNGP advanced driver assistance system, according to He. 

The Chinese automaker has updated its self-driving technology with what it described as some of the most advanced occupancy networks in the industry, comprising a deep neural network that reconstructs barriers and vehicles and predicts occupancy in a three-dimensional space for collision avoidance. 

A similar move has allowed Tesla to remove several ultrasonic sensors from its vehicles while enabling high-definition spatial positioning, longer range visibility, and the ability to differentiate between objects with its Full Self-Driving Beta software, which was announced by the US automaker last October. 

CEO He said Xpeng will deploy its XNGP system for urban traffic roads in 50 cities by December and make the functions available to drivers across China and Europe by 2024. It is competing with Huawei, which has quickly emerged as a rising player in the industry and previously announced a nationwide roll-out of similar features by year-end, while rivals BYD and Li Auto are playing catch-up.

Flying cars and robots

Experimenting with different approaches around flying cars, Xpeng also showcased two prototype aircrafts, or electric vertical takeoff and landing vehicles (eVTOLs). One of them boasts a two-in-one design that can fold up its wings and other components into the vehicle body, although He acknowledged that there are still some safety issues to be addressed. 

The 46-year-old serial entrepreneur sees greater potential for the commercial adoption of the other prototype, which is built on a modular system allowing the separation of the flight and automobile components. This model has a spacious interior with five seats while on the road and is powered by an extended-range hybrid engine, which can also recharge its aircraft component as it drives; up in the sky, the model is capable of carrying two passengers in an all-electric mode.

Xpeng further surprised the audience on Tuesday as its humanoid robotic prototype, the PX5, made its first public appearance. The company showcased the robot’s ability to navigate different terrain and pick up hand-held objects such as pens in a video. He envisions a near future where such AI machines could help look around in its factories or even mingle with customers at showrooms, hopefully by this time next year, he added.

NIO may consider bidding for two manufacturing plants in the eastern Chinese city of Hefei put up for sale by partner Anhui Jianghuai Automobile Group Co (JAC) on Oct. 20, reportedly in an effort to exercise more control over its production process.

Why it matters: Acquiring existing plants is one of the easiest ways for electric vehicle companies to obtain a production license in China, as NIO rival Li Auto did previously. The move could be a big positive for NIO in improving operational efficiency over the long term, a person with knowledge of the matter told the Chinese financial media outlet National Business Daily (NBD) on Oct. 20. 

• In 2020, Xpeng Motors, another competitor to NIO, announced that it had obtained a production license for its fully-owned factory in the southern Chinese city of Zhaoqing. This achievement followed years of collaboration with Haima Automobile, a former partner of Japan’s Mazda, to manufacture EVs, Reuters reported.

Details: State-owned JAC said on Oct. 20 that it plans to look for buyers publicly for part of its assets under its third factory and its Xinqiao plant for a combined value of approximately RMB 4.5 billion ($610 million). 

• This would represent a premium of nearly 6.8% to its book value and include some inventory, equipment, construction, and land use rights that belong to its passenger vehicle subsidiary, according to a regulatory filing (in Chinese).
• The two factories that JAC referred to were in fact the two advanced manufacturing bases established by the automaker for EV production with NIO, according to the person who spoke with NBD and noted the latter’s likely intention to reach a deal.
• A NIO spokesperson neither confirmed nor denied the news when contacted by TechNode on Monday, saying that the company will share more details on relevant matters “when the time is right” and that the decision by its partner has no impact on NIO’s production and operations.

Context: JAC, also a manufacturing partner for Volkswagen in China, completed construction of the so-called first advanced manufacturing base, or the F1 plant, with NIO in the Shushan district of Hefei in late 2017. The facility, which had an initial annual production capacity of 120,000 vehicles, was built after the two companies reached an outsourcing agreement in mid-2016. 

• New York- and Hong Kong-listed NIO and JAC began operating their second facility, or the F2 plant, in the Xinqiao Science and Technology Innovation Demonstration Zone in the city last September. 
• The annual capacity of each of the F1 and the F2 plants can be increased to 300,000 vehicles, and the agreements for manufacturing in the two plants are set to expire in May 2024 and September 2025 respectively, according to NIO’s annual report. 

READ MORE: Visiting the NIO plant in Hefei, China’s rising EV capital

China’s Changan Automobile on Tuesday signed an agreement with Thailand’s Board of Investment in Beijing to build a $241.7 million electric vehicle factory in the country’s coastal Rayong province, the latest development by Chinese automakers to expand their reach in the global car market. 

Changan’s move to Thailand: The announcement was made during the two-day Belt and Road Initiative Summit which ended Wednesday as the Chinese government celebrates the 10th anniversary of its massive global transportation and infrastructure project in an effort to consolidate relations with Asian, African, and Latin American countries.

• The deal is part of an ambitious plan by the state-owned manufacturer, also a Chinese partner of Ford, to sell 1.2 million vehicles annually in overseas markets by 2030, which would represent a fivefold increase from last year’s 250,000 units. 
• The plant will consist of approximately 600 acres of land and is located in the Eastern Economic Corridor Special Zone. It will be able to produce 100,000 units of battery EVs and plug-in hybrids annually once construction is completed next year and allow further expansion to 200,000 units to meet demand.
• The carmaker expects the 8.8 billion Thai Baht ($241.7 million) facility to become a regional production hub from which right-hand drive EVs will be shipped to nearby Southeast Asian countries, as well as Australia, New Zealand, and the UK, among others. 
• Changan in April pledged to invest a total of RMB 4 billion ($550 million) in the facility in the next few years, according to chairman Zhu Huarong, while planning its entry to Europe next year with an annual sales goal of 300,000 units in the region.

Thailand, an emerging battlefield: Thailand, a premier trade ally of China, has been promoting the adoption of green energy vehicles, currently offering each EV with a subsidy of up to 150,000 Baht along with other incentives such as import tax reductions. It is positioning itself as a regional hub for EV manufacturing and has attracted investment from some of China’s biggest automakers. 

• BYD last September revealed plans to establish a 17.9-billion-baht plant in Rayong with the country’s industrial estate developer WHA Group, which will have a maximum output of 150,000 vehicles annually and is scheduled for operation in 2024. 
• SAIC, China’s biggest automaker, in April began constructing a 500 million baht component factory in the Bay of Bangkok, having produced MG-branded cars with local conglomerate CP Groups at a factory in Chon Buri with a capacity of 100,000 units per year since 2014. 
• Chery Automobile, China’s second biggest car exporter, is readying for entry to Thailand with an electric car model in the first half of 2024, while planning to establish a facility in the country, one of its strategic markets other than Malaysia and Indonesia.
• Great Wall Motor opened a factory in the country in mid-2021, which it acquired from General Motors a year earlier, and can churn out up to 80,000 hybrid and electric cars annually. It has targeted a 50% annual growth rate to sell 18,000 cars this year in the country, Nikkei reported.
• Aion, the EV unit of state-owned automaker GAC, began exporting cars to Thailand in August, SCMP reported, after reaching a partnership with local dealership Gold Integrate in June. The company said it would set up its regional headquarters in Thailand this year and look to build a plant in the near term. 
• Hozon in March broke ground at its first overseas plant on the outskirts of Bangkok. Mass production is set to begin next January with an annual capacity of 20,000 units. Hozon’s Neta V was the country’s third best-selling EV model last month, and the startup aims to sell 10,000 units in Thailand this year. 

Chinese electric vehicle maker Leapmotor said on Monday that it swung to a positive gross margin of 1.2% in the third quarter that ended Sept. 30 on the back of strong revenue growth, with the chief executive predicting a record performance for the remainder of the year. 

Why it matters: The quarterly results come as the Zhejiang-based and Hong Kong-listed automaker has continued its solid growth momentum in the highly competitive home market and recently announced an ambitious global strategy that covers major regional markets from Europe to Asia Pacific. 

• In addition, Leapmotor has reportedly been in talks with established automakers Volkswagen and Stellantis on potential collaborations that could include an investment deal, and on Monday expressed a willingness in its earnings report to “share” its technological capabilities with partners.

Details: Leapmotor on Monday posted a positive gross margin of 1.2% in the third quarter for the first time and “ahead of schedule,” compared with the negative margin of 8.9% it posted over the same period of last year and the negative 5.2% it achieved as of June. It initially aimed to achieve a positive margin by the end of this year. 

• The company attributed the growth to the strong deliveries of its pricier C01 sedans and C11 crossovers, which have starting prices of RMB 145,800 and RMB 149,800 ($19,933 and $20,481) respectively, significantly higher than that of its earlier model the T03, which is priced from RMB 49,900.
• Quarterly deliveries for Leapmotor increased by 24.5% year-on-year to 44,325 units over the past three months, a record high for the seven-year-old startup, with those of C01 and C11 accounting for more than 80% of total deliveries. 
• Revenue grew 31.9% year-on-year to nearly RMB 5.7 billion, with loss attributable to shareholders narrowing to RMB 986 million from the RMB 1.34 billion Leapmotor posted a year ago. Its research and development expenses of RMB 474 million during the quarter were up 17.3% year-on-year. 
• “Based on the current order volume, our deliveries in the fourth quarter are expected to record a new high,” CEO Zhu Jiangming said. The company delivered 15,800 units last month, still far behind larger rivals BYD and Tesla but slightly ahead of peers including Hozon, Xpeng, and Zeekr. 

Context: Leapmotor followed the suit of BYD and Li Auto earlier than most Chinese EV startups, betting on both pure EVs and plug-in hybrid EVs (PHEVs) with the launches of the extended-range C11 and C01 earlier this year. 

• PHEVs reported an impressive growth rate of 84.5% for the first nine months of this year in China, compared with battery EVs’ 18.1%, according to figures released by the China Passenger Car Association. 
• Meanwhile, on Aug. 1 the company announced a new round of price cuts of up to RMB 20,000 across its lineups, reversing its previous decision to keep prices stable along with several other EV makers in March.
• On Sept. 4 in Munich, Germany, Leapmotor unveiled the Leap 3.0, its proprietary vehicle architecture, and the C10, a mid-size SUV and the first model built upon it. Zhu said the company plans to launch five models in two years in markets including Europe, Asia Pacific, and the Middle East.

Chinese carmaker Guangzhou Automobile Group (GAC) is strengthening its alliance with ride-hailing platform Didi, investing up to $75 million into the latter’s autonomous driving unit. The move is expected to help GAC enhance its self-driving technological capabilities and sustain its sound growth momentum in the Chinese electric vehicle segment, according to an industry veteran. 

The deal, nearly clinched over three years ago, has recently been revived by the two companies as the impact from Beijing’s extended crackdown on Didi has waned, a person with direct knowledge of the matter told TechNode on Friday. It also comes against the backdrop of Didi’s renewed efforts to solidify its position as China’s biggest ride-hailing service with new incentives, putting smaller rivals under pressure. 

Self-driving push: Autonomous driving has proven to be among the most capital-intensive startup businesses on the current tech landscape, and the extended collaboration with Didi would allow GAC to share its costs and risks of making robocars, said Liu Guanghao, partner at Shanghai-based venture capital firm Befor Capital.

• The first robotaxi jointly developed by GAC and Didi is slated to join Didi’s ride-hailing network for commercial operation in 2025, the companies said earlier this year. GAC’s EV arm, Aion, announced a partnership with Didi back in May 2021 to develop a mass-produced car with Level 4 autonomous capabilities, indicating that the car can pilot itself without a human driver most of the time.
• Didi will also jointly test and operate autonomous vehicles for ride-hailing with OnTime, a mobility platform launched by GAC with partners in 2019, as disclosed by an anonymous source. OnTime, primarily active in the southern Chinese province of Guangdong where its parent company is headquartered, has been testing AVs with Toyota-backed Pony.ai, as well as Nissan-supported WeRide.

EV sales boost: The investment would also help GAC’s core carmaking business achieve sustained growth, especially in the Chinese commercial fleet segment, where its EV brand Aion has established a significant presence over the years, according to Liu. “Carmakers need more sales in order to survive in this highly competitive market,” he said. 

• Aion ranked second in sales among all-electric vehicles for ride-hailing, with approximately 49,000 units sold from January to October 2022, which accounted for 29% of its total sales, according to figures compiled by Shanghai-based consultancy LandRoads (in Chinese). BYD was the top-selling brand in the field, with sales of 35,000 more units during the same period, although this accounted for only 14% of its total volume. 
• GAC told investors last March that shipments of its Aion EVs for ride-hailing services only accounted for 12% of its total sales. The automaker, also a manufacturing partner for Toyota and Honda in China, reported sales of nearly 360,000 Aion EVs from January to September and is hoping to achieve 500,000 units for this year, which could almost double the number it sold in 2022. 

Context: GAC Capital, a wholly-owned subsidiary of the automaker, as well as state-owned Guangzhou Development District Investment Group, will invest the same amount of up to $149 million totally in Didi’s self-driving unit. GAC is set to inject no more than $75 million in the funding round, according to a Friday announcement (in Chinese). 

• OnTime is currently pursuing a public listing on the Hong Kong stock exchange, four years after it was launched by GAC along with a group of investors including Didi and Chinese gaming giant Tencent in mid-2019. It completed roughly 60 million rides last year and has operated in 21 domestic cities in the country’s Greater Bay area as of June. 
• GAC declined to comment when contacted by TechNode on Friday. Didi did not respond to TechNode’s request for comment. 

China’s Didi has recently set new growth targets in the three years to 2025, with new incentives for drivers and riders, in its latest move to recapture lost market share in the country’s ride-hailing sector, LatePost reported Monday. 

Why it matters: The move comes after Didi received a permit in January to resume new user registration and downloads through Chinese app stores for its ride-hailing service, marking an official end to a long-running regulatory crackdown on the company. 

• The development also puts competitors such as Meituan and Alibaba’s Amap under pressure, although industry insiders warn of a bumpy road ahead for Didi in the face of softening market demand due to weakening economic conditions, according to the report. 

Details: Didi recently informed investors that it is aiming for a 45% year-on-year growth in daily orders in 2023 and expects to keep the pace between 10% and 15% over the next two years, individuals familiar with the matter told Chinese media outlet LatePost. 

• This implies that the company is expected to complete more than 29 million rides per day for the full year, rebounding from its lowest point of around 20 million last January, and increasing the number to nearly 40 million by the end of 2025. 
• The annual target for this year is achievable, according to company insiders, with Didi starting from a low base in 2022 when major Chinese cities were repeatedly placed under Covid-19 lockdowns, dealing a blow to the country’s ride-hailing sector.
• The company delivered roughly 28.2 million rides per day on average in the first quarter of 2023, representing a 42% growth from a year ago, and increased its average number of daily rides to 29.4 million in the second quarter, according to its filings. 
• However, Didi’s ambitious objectives for 2024 and 2025 may face significant hurdles amid shrinking demand. By the end of 2022, ride-hailing app users in China totaled 437 million, down around 15.5 million on the total from the year before, according to figures compiled by the China Internet Network Information Center. 
• China’s biggest ride-hailing platform has increased its efforts to subsidize drivers and riders in recent months. A source estimated that the overall amount of subsidies could reach RMB 26.6 billion ($3.6 billion) this year, which would be equivalent to 14.8% of its total revenue at home, surpassing its previous level of 14%. 
• Didi did not respond to TechNode’s request for comment.

Context: Didi has been scaling back its efforts in developing cash-bleeding, emerging new businesses, and refocusing on its core business over the last two years after the Chinese government launched a cybersecurity probe into the company in July 2021. 

• Chengxin Youxuan, Didi’s community group-buy grocery unit, reportedly shut down more than 60% of its service locations shortly after the probe began, only a year after the launch of the service. 
• The company announced the sale of its smart electric vehicle business to Xpeng Motors in August. It had previously launched an all-electric hatchback for ride-hailing with BYD in November 2020.
• Chinese authorities announced a RMB 8.02 billion fine for Didi last July, closing its 18-month crackdown on the mobility giant, which was initiated following its mega public listing in New York in June 2021. 
• Didi had previously set big targets back in 2020. Notably, it had set its sights on overall daily orders surpassing 100 million globally for the next three years, with its four-wheel businesses in China, including ride-hailing and private chauffeurs, intended to account for half of this figure.

READ MORE: Didi app ban ignites race for ride-hailing market share

Aito, a Chinese electric vehicle brand backed by Huawei, has received more than 50,000 non-refundable orders for its redesigned M7 in less than a month. The orders follow the Sept. 12 public launch of the sports utility vehicle, which features Huawei’s Harmony operating system and assisted driving technologies. 

Why it matters: The latest sales figures, as revealed by a senior executive at Huawei, show tentative signs of a bounce-back for Aito from a months-long slump and could be a boost to the confidence of Huawei’s car manufacturing partners. 

• Aito has also been buoyed by Huawei’s comeback in the smartphone market with the recent launch of its Mate 60 Pro series, following the US ban on exports of advanced semiconductor technology to the Chinese technology giant. 

Details: The revamped M7 crossover has racked up more than 50,000 pre-orders with non-refundable deposits of RMB 5,000 ($685) as of Friday, Richard Yu, the chief executive of Huawei’s consumer business group, said in a post on Chinese social media app WeChat. 

• Yu described the growth momentum of the new M7 as “a miracle,” adding that more than 10,000 customers placed their orders over the past two days. He called on sales employees to ramp up delivery to meet the growing demand (our translation). 
• Accumulative orders per store averaged more than 80 following the launch on Sept. 12, according to figures posted Saturday by Sun Shaojun, founder of consumer behavior research agency CarFans. Aito said in June it operated a network of around 1,000 retail locations and service centers in 230 Chinese cities. 
• Sun added that a surge in store traffic for Huawei’s new smartphones has boosted the sales of the Aito-branded EVs, produced by Chinese manufacturer Seres, over the recent National Day holiday season. Huawei began selling EVs with its little-known partner via its retail network in 2021.
• Roughly 40-50% of the M7’s buyers are Huawei smartphone users and were coming to the stores for the Mate 60 handsets, Jefferies analysts wrote in an Oct. 5 note, citing an executive of a Chinese auto dealership. Customers compare the six-seater with Li Auto’s L7, BYD’s Tang, and the Ford Edge, analysts said.

Context: Huawei on Sept. 12 unveiled the redesigned version of the M7 SUV, featuring Huawei’s Harmony operating system at a starting price of RMB 249,800 ($34,299), which is around RMB 70,000 lower than the initial version launched a year earlier.

• The vehicle also comes with Huawei’s latest assisted driving software, ADS 2.0, which will allow it to travel by itself on busy urban streets nationwide as early as December, making it one of the most ambitious players in the Chinese self-driving car space.
• Huawei has offered future owners of the new large-sized plug-in hybrid early access to purchase its Mate 60 smartphones. The Mate 60 Pro flagship handset reportedly incorporates a self-developed 5G processor, a breakthrough for the Chinese tech giant following US sanctions in 2019. 
• Two-year-old Aito has seen sales slump during most of 2023 amid fierce competition from more established rivals such as BYD and Tesla. Seres, which produces Aito-branded EVs, recorded sales of around 33,000 units for the first eight months of this year, representing a 15.6% decline year-on-year. 
• Meanwhile, Huawei has partnered with several other domestic automakers including Changan and BAIC. It is also on track to launch the S7 with carmaker Chery in November, the first sedan under a new marque called Zhijie in Chinese that will compete against Tesla’s Model S.

Chinese premium electric vehicle brand Denza on Tuesday revealed a cheaper version of its advanced driver assistance system (ADAS) in collaboration with US chipmaker Nvidia, as the BYD affiliate ramps up efforts to compete against leading self-driving players such as Xpeng Motors and Huawei. 

Denza is also eyeing overseas expansion, having established its presence in the China market with year-to-date deliveries of nearly 80,000 EVs as of August. The company expects overseas sales to begin as early as next year, including in Australia, Southeast Asia, the Middle East, and Europe. 

Why it matters: The companies said the launch of the affordable assisted driving technology could reduce the barrier to a transition to intelligent mobility. The system facilitates Denza’s vehicles to navigate most highways in China as well as some busy urban streets in major domestic cities. 

• BYD launched the N7 crossover under the Denza marque in July, with the top-end version powered by Nvidia’s ​​DRIVE Orin processor, which offers 254 trillion operations per second (or TOPS). Now all N7 models can be equipped with Nvidia’s DRIVE Orin chips for automated driving, according to a Wednesday statement. 

Details: The new autonomous driving system will enable on-ramp to off-ramp driving, as well as automatic lane changing on Chinese highways, for Denza’s flagship N7 SUV. It has a price tag of RMB 15,000 ($2,053) and is powered by Nvidia’s DRIVE Orin processor, which can handle up to 84 TOPS. The N7 SUVs that feature the technology will have two lidar sensors removed to reduce costs. 

• The companies say that the higher-end version, priced at RMB 23,000, will allow the vehicles to function by themselves on bustling city streets for the daily commute, using a feature named City NOA (Navigate On Autopilot). Denza’s general manager Zhao Changjiang said the company would release its Highway NOA feature to N7 owners starting in December, followed by an over-the-air update of the City NOA early next year. 
• Tong Liu, vice president and general manager of China auto business at Nvidia, said that he was “impressed” by the efforts made by BYD in developing intelligent cars over the course of their three-year collaboration, calling BYD/Denza a “strong advocate” of commercializing self-driving technology (our translation). BYD’s Dynasty and Ocean lineups are also using Nvidia’s semiconductor. 

Context: Several Chinese auto and tech companies have announced ambitious plans for the adoption of assisted driving technologies for urban driving, akin to Tesla’s full self-driving (FSD) function that has yet to be made available in the country. 

• Volkswagen-backed Xpeng Motors in June launched its City Navigation Guided Pilot feature in Beijing and is on track to expand the capability in at least 50 domestic cities by the end of this year, while Great Wall Motor has set a target of covering 100 cities by 2024.
• In the meantime, Li Auto vehicles will be able to navigate on fixed routes for daily commuters in 100 major Chinese cities by year-end, following weeks of training with its collection of datasets. Rivals Nio and Geely’s Zeekr are also planning to roll out similar features later this year. 
• Huawei is by far the most ambitious company in the field in China, with its head of consumer business Richard Yu stating on Sept. 12 that Huawei’s self-driving system would be applicable nationwide for both highway and urban driving with Aito-branded EVs by December, Caixin reported. 
• BYD has made a series of moves in recent months to enhance its research and development capacity, especially for autonomous driving, including organizational restructuring and talent hiring. More than 80% of the 30,000 fresh graduates recruited by the company this year were research personnel. 

READ MORE: Baidu and Huawei take on global giants with new in-car software offerings at Auto Shanghai 2023

Nio took a giant leap into the smartphone arena on Thursday with the much-anticipated launch of its Nio Phone, the first handset designed by a Chinese automaker. The new device is hitting the market at a price comparable to the latest flagship offerings by Apple and Huawei. 

Having developed its own phone from the ground up, the electric vehicle maker expects to create an ecosystem across vehicles, devices, and services, which will provide a seamless experience for Nio users. The handset offers the purest form of the Android experience without any pre-installed apps or banner ads, chief executive William Li said during a press event in Shanghai on Thursday.  

Some of the standout features Nio highlights are a master remote control for vehicles with options to control everything from windows to seats, as well as seamless streaming of videos, music, and meetings from smartphone to car infotainment screen. Here’s what impressed us most about Nio’s first Android phone. 

Ultra wideband technology

Nio said the phone offers remote control for in-car devices which differs from most competitors by using Ultra Wideband (UWB) technology, an emerging wireless communication protocol that enables precise, speedy, and secure location tracking.

During a hands-on session where TechNode was present, a Nio ES8 SUV “greeted” the phone by turning its lights on when a Nio employee approached and automatically unlocked shortly before he reached for the door handle without taking out his phone. The smartphone also serves as a central hub to remotely operate the car’s air conditioning among other options at the touch of a single button. 

The short-range, high-bandwidth digital radio technology allows fast data transmission with increased security compared with other wireless standards such as NFC and Bluetooth, which are often absent from existing phone models produced by domestic makers such as Huawei and Xiaomi, according to Nio staff. The first initiative of this kind was announced by Geely-backed rival Meizu a month earlier. 

Several global automakers are also investing in the technology in collaboration with Apple. The US smartphone maker has reportedly been allowing BMW’s iX owners to unlock their cars using select iPhones or wearables since 2021, although most carmakers are currently unable to leverage the technology with Apple’s devices, Nio CEO William Li previously told Chinese reporters.

In-car connectivity

TechNode reporters also played the hit racing game title Asphalt on the in-car display with a Microsoft Xbox wireless controller. It offered a smooth experience which did not freeze or crash, as it runs in the smartphone’s background enabled with 5G services and a Qualcomm semiconductor. 

Nio’s in-car experience also allows users to stream videos on Bilibili, follow turn-by-turn navigation on Amap, or transition to live meetings on Dingtalk from their phones through the car’s infotainment screen. Huawei earlier announced a similar Super Terminal feature, while Geely claimed such capabilities with the recent launch of its new Meizu flagship series and operating system, Flyeme Auto.

It is worth pointing out that the feature is different from screen mirroring, as it actually creates a “doppelganger” of the Nio Phone on the in-car dashboard so that users can use the smartphone and the in-car system simultaneously yet separately. 

With its first self-branded device, Nio is one of the few Chinese automakers capable of integrating users’ smartphones with their car’s infotainment system at the operating system level. Such integration for Aito and Geely was enabled by their respective smartphone partners Huawei and Meizu. 

Specifications and prices

The Nio Phone is powered by a Qualcomm high-end Snapdragon 8 Gen 2 processor, the same as existing flagship offerings such as Xiaomi’s Mi 13, Oppo’s Reno 11 Pro, and the Meizu 20. It also comes with a 6.81-inch 2K+E6 Samsung screen, providing a resolution of 3,200 x 1,440 pixels, a 120Hz refresh rate, and a peak brightness of 1,800nits.

The device features a triple-camera system that includes three 50MP cameras and has a large battery of 5,200mAh, supporting 50 W wireless charging and 10 W reverse charging. An entry-level version weighs 212 grams and measures 165.19 x 75.54 x 8.9mm. 

The Nio Phone’s three versions come in seven colors, and are priced between RMB 6,499 and RMB 7,499 ($890-$1,027). Shipment is scheduled for Sept. 28. For comparison, Huawei’s latest Mate 60 Pro flagship phone costs from RMB 6,499, while Apple on Sept. 15 began selling its iPhone 15 series with a starting price of RMB 5,999 in China. 

Well, it’s here. In June, the rumors were there’d be a 5G Huawei phone towards the end of the year. It hit the shelves two or three months earlier than expected.

In my previous article, I argued that Huawei’s handset would be more of a domestic play, and I stand by that argument. While I did argue Huawei and SMIC creating a 7nm chip was no surprise, what has been produced has nevertheless surprised some, including myself.

So what is good about this chip? How will Huawei and SMIC progress from here? And what does it mean for others in the industry?

The positives

Let’s start with the positives from a Chinese point of view. Although not 100% confirmed, as we are not sure who else could possibly fabricate this chip for Huawei, SMIC has seemingly produced a true 7nm density chip without EUV. (Some still speculate that SMIC isn’t responsible.) Despite what many believe this was always possible – TSMC did it back in 2018 and SMIC did it by itself earlier in 2023 with a bitcoin mining chip. So no surprises here. When it comes to using DUV equipment to create 7nm density designs SMIC now seems to be on a par with the rest of the world. What the yield looks like is unknown, I can’t believe it is as low as 10%, and also it cannot be as good as an EUV process. I can only speculate that it is good enough and will improve as SMIC gets more customers for this process. With government subsidies, the economics of low yields mean less to SMIC than they might to other foundries.

The other positive is its RF front-end. While Huawei was always a leading modem designer, it previously relied on US suppliers like Skyworks and Qorvo for the RF front-end. This is no longer the case with the Kirin 9000S. It’s impressive that a completely self-developed front-end works at 5G speeds, even if the OS still says 4G.  

The negatives

Nevertheless, there are a few negatives. Despite the rhetoric, this is not a completely indigenous Chinese chip. It is based on Arm IP, it uses SK Hynix memory, it was presumably designed somehow using US EDA tools (I would like to know if it wasn’t), and the fabrication process used foreign equipment from the likes of ASML, AMAT, LAM, TEL, KLA, etc.

Sanctions to date haven’t stopped China’s equipment imports. In fact, they are higher than ever on this front rather than finding ways around sanctions. China hasn’t really needed to do anything. The equipment that can be used for 28nm can be repurposed for 7nm, and perhaps 5nm in a couple of years. While this is a positive for China, it does mean that it is still reliant; products from the likes of SMEE are still far behind. SMIC is keeping quiet. It won’t want to have any stricter sanctions placed on it, but really, the only way to truly stop it would be to limit or ban all sales into China for all such equipment. This is unlikely to happen.

The use of SK Hynix memory is also interesting. This must have come from old stockpiles as SK Hynix was not aware of any recent sales to sanctioned Huawei. This answers the question as to whether domestic DRAM or NAND is ready for such applications yet, and it seems the answer is no, as Huawei opted for SK Hynix memory which was first announced in 2020. We don’t know how much is stockpiled, so it could be possible that future versions of the chip will be forced to change to domestic suppliers.

The fallout

The popular opinion in Chinese society is that China has broken US sanctions, Huawei and SMIC have saved China, and the Huawei phone deserves all the praise it can get. In one sense this is true. It performs like a leading edge chip from a couple of years ago and is easily good enough for any application today. I myself use a phone more than two years old.

There are others outside of China that completely dismiss this chip as a low-yield propaganda project. The likes of MediaTek announced its own equivalent chip using TSMC’s 3nm process almost at the same time as Huawei’s announcement. Huawei itself used to use TSMC’s 5nm process before sanctions, so in fact, sanctions have caused Huawei to go backward.

The truth is in between of course. This is a serious chip, but not surprising. We know 7nm chips can be created using multi-patterning on the ASML 1980i series of DUV lithography machines, and this unsurprisingly is what SMIC has done. We know Huawei subsidiary HiSilicon is great at designing handset chips, and this is what they’ve done extremely well here.

Threats and restrictions remain, however, sanctions could get tighter. SMIC could be punished for supplying Huawei.; it does have a considerable foreign business that could be threatened for example. Could Huawei itself be sued in any way for using SK Hynix chips or perhaps illegally using US tools? If SMIC produced a chip where its customer could not prove it was using properly licensed tools, this could also be an issue for SMIC. I know from my own experience that not having a proper license for EDA tools in China can be quite common. This in turn could restrict any sales outside of China. Even if all this is fine, selling outside of China will still be difficult. This is an expensive $1,000 phone with no Google services installed and a chip performing to the standards of two years ago. The average consumer is not going to want to install Google services manually themselves, let alone fork out $1,000 for doing so. Patriotic marketing does not translate outside of China.

Finally, this new device may mean hard times in the Chinese market for Huawei’s competitors and other chip companies. As Huawei’s sales dropped in recent years, Oppo, Vivo, Xiaomi, and Apple, all took a piece of the pie. This in turn led to more sales for Qualcomm and MediaTek who supply these other handset companies. Will Huawei’s sales rise to eat into that of other Chinese handset companies or Apple’s? If Apple sales in China remain strong then Huawei’s phone will only serve to take market share away from other Chinese brands and hurt Qualcomm and MediaTek as well in the process.

Chinese electric vehicle battery maker Gotion High-Tech announced on Sept. 16 that it has begun production at its first European plant in Gottingen, Germany, and expects to begin supplying local markets next month. The move represents a major overseas market milestone for the firm, which counts Volkswagen as its largest shareholder with a 24.77% stake.

Why it matters: The move has made Gotion the second Chinese battery supplier after CATL to set up an overseas production base in Europe, which could help strengthen the development of a local battery supply chain on the continent.

• European legislators recently passed new rules that would require businesses to label the carbon footprints of their batteries and use a minimum amount of recycled raw materials eight years after the law comes into effect, Reuters reported. 

Details: Gotion has operationalized its first production line at the Gottingen factory and received a large number of orders from local clients, with plans to begin supplying local markets in October, Peter Willemsen, chief operating officer of Gotion Global said in a statement. The Chinese enterprise took over the plant from German auto supplier Bosch in 2021. 

• Gotion will mass produce battery packs for both commercial and passenger vehicles, as well as those for energy storage in the new facility, which will have an annual capacity of 5 gigawatt hours (GWh) by mid-2024. It aims for a total capacity for batteries equivalent to 20 GWh when construction is completed, which is anticipated by 2025. 
• The Chinese battery maker also announced battery development and supply partnerships with European enterprises including German chemical giant BASF and Swiss engineering company ABB on Sept. 16. The plant will serve as a regional research and development center and a logistics hub at a projected annual output value of €2 billion once it comes into full operation. 

Context: The world’s ninth largest battery maker by shipments, Gotion is already facilitating the establishment of a battery plant scheduled for operation in 2025 with Volkswagen in Salzgitter, a city close to Wolfsburg where its major shareholder is headquartered.

• Gotion also plans to build a $6.3 billion factory in Morocco and is considering setting up a joint facility for making battery cells at an annual capacity of 40 GWh with Slovakian battery startup InoBat in the eastern European country. Construction of two US factories in Illinois and Michigan is also in the pipeline. 
• Rival CATL initiated efforts to build its first European plant in Thuringia, Germany in 2018 and kicked off production last December. Another battery giant, BYD, is mulling local production of EV batteries in Hungary, while Great Wall Motor-backed SVolt recently announced ambitious European expansion plans. 

China’s Great Wall Motor (GWM) will bring its next-generation in-car operating system to market next year, and stick to the ambitious goal of rolling out its semi-autonomous driving function nationwide by the end of 2024, according to a press event held on Tuesday. 

The company is undertaking a targeted push to create a scalable and unified software platform for future vehicle models across multiple different brands, a concept that has become mainstream in the years since Tesla entered the market. A significant increase in the number of software updates, aimed at improving the driving experience, is expected from next year, vice president Nicole Wu told TechNode at the event, held in the northern city of Baoding, where the company is headquartered. 

China’s third biggest private automaker by sales volume, GWM had a relatively early start in autonomous driving and in-car technologies. It began testing self-driving cars with the creation of a dedicated division called Haomo.ai in 2019 and became the second Chinese automaker after Xpeng Motors to build a supercomputing center, this January. Now, the company has set up a new artificial intelligence research lab to bring generative AI tools into play in future car models. 

Here are some of the highlights of TechNode’s interview with GWM executives, including vice president Nicole Wu, senior director Jiang Haipeng, director She Shidong, and Yang Jifeng, head of the AI lab. 

Major digital cockpit progress

GWM will roll out an app store and implement it across all brands, as part of its upcoming in-car operating system, Coffee OS 3.0, scheduled for release in the first half of 2024. The store will give users access to common third-party services and infotainment apps fine-tuned for car-friendly usage, as more customers expect a smartphone-like experience in the car. 

By working with smartphone makers such as Huawei and Xiaomi, the new system will allow drivers to use a handset while operating their vehicle. She Shidong added that owners will be able to play video games and watch movies in their cars by connecting gaming consoles, augmented-reality glasses or other devices, with the car dashboard using wireless or bluetooth connections.

By making constant updates of driving and infotainment features possible, the Coffee OS 3.0 is intended to take the in-car experience to a new level. Wu envisions each new GWM model getting a major software update every two to three months. Tesla and Nio released 2.8 and 1.3 software updates per month on average respectively in China during the first half of 2022, according to figures from domestic consultancy Ways. 

Ambitious self-driving goal

GWM has maintained its goal of launching Navigate on HPilot (NOH), a function similar to Tesla’s full self-driving (FSD) technology, to drivers in 100 cities around China by 2024. The software will first be available to owners of its Blue Mountain flagship SUVs in Beijing and Shanghai by next March, according to Jiang. 

This will enable vehicles to change lanes, overtake, and make turns automatically on Chinese city streets without high-precision maps. Jiang added that a set of common middleware plays an important part in creating a platform for assisted driving software that is updateable and scalable at a reasonable cost. 

Chinese auto and tech companies have been competing for a leading position in this space at a time when Tesla’s FSD function has yet to become available in the country. Xpeng’s XNGP advanced driver assistance system is set to be available in 50 major cities by the end of this year, while Li Auto’s EVs will be capable of traveling on fixed routes by themselves after training for weeks in 100 cities. 

Bring generative AI to vehicles

GWM is also looking to greatly expand its in-car system capabilities through the integration of emerging technologies such as generative AI tools. Its first aim is to use AI to anticipate user preferences and create high-quality infotainment content in some new car models in the fourth quarter of this year.

The company’s newly established AI Lab has been exploring the use of large language models in GWM vehicles. Yang expects significant improvement with the upcoming Coffee OS 3.0, especially in voice recognition and natural language understanding, expecting that the latest operating system will be able to give detailed, relevant responses to users’ queries using AI.

Rival players are all developing ChatGPT-like virtual assistants for use in future car models. Geely is scheduled to launch its RMB 128,000 ($17,600) Galaxy L6 SUV on Saturday with a proprietary AI model that can read children’s picture books. Both GWM and Geely-affiliated Ecarx earlier partnered with Baidu to develop AI assistants based on the latter’s GPT-style large language models.

Lynk & Co, a brand jointly owned by China’s Geely and Volvo Car, launched the 08, its long-anticipated plug-in hybrid crossover on Sept. 8. The automaker says the car has a starting price of RMB 208,800 ($28,815) and is powered by an in-house designed seven-nanometer (nm) chip, claimed by the company to be China’s first.

The compact sports utility vehicle is the first model under Lynk & Co which is exclusively plug-in hybrid. This marks a significant shift for Geely and Volvo as they make a determined move away from the internal combustion engine.

Having grappled with slowing growth in an increasingly competitive market, Lynk & Co expects the mid-sized 08 to be a high-volume model in the mainstream luxury SUV segment, competing against rival offerings including BYD’s Tang, Li Auto’s L7, and the Aito M5.

Why it matters: The Lynk & Co 08 is equipped with two SE1000 automotive chips, which is the first high-performance seven-nanometer semiconductor for cars designed by a Chinese company. The car can perform over 16 trillion operations per second (TOPS), Geely said in a statement. This is twice the number of Qualcomm’s Snapdragon SA8155P, the US tech giant’s flagship automotive cockpit platform. 

• It is also the first model to use Flyme Auto, an operating system jointly developed by Chinese smartphone maker Meizu and Ecarx, an auto tech startup backed by Geely’s chairman Eric Li. This offers an infotainment system that seamlessly connects users’ smartphone apps to the vehicle’s navigation screen.

Details: The Lynk & Co 08 uses a 1.5-liter four-cylinder engine along with a large 39.8-kilowatt-hour battery pack, providing a maximum driving range of 205 kilometers (127 miles) in all-electric mode and 1,400 km on a full tank plus full charge. Delivery is scheduled the begin later this month. 

• It uses little energy on short trips and ensures cost-competitive travel for daily commutes. By comparison, BYD’s Tang hybrid seven-seater and the Li Auto L7 extended-range hybrid run for up to 189 and 170 km, respectively. 
• The SUV boasts fuel consumption of 5.5 liters per 100 km, comparable to the 5.3L/100km of the BYD Tang DM-i, one of China’s best-selling hybrid models, and surpassing the Li Auto L7’s 7.6L/100 km. It can accelerate from 0 to 100 km/h (62 mph) in 4.6 seconds.
• The five-seater compact offers passengers a relatively large interior space measuring 4.8 meters in length and spanning a 2,915-millimeter-long wheelbase, close to the bigger but more expensive Nio ES6 and Li Auto L7, which are priced from RMB 338,000 and RMB 319,800, respectively.
• Priced between RMB 208,800 and RMB 288,000, the SUV is packed with advanced technology and luxurious design features, such as a 92-inch, augmented reality-based display, the largest of its kind in the industry, as well as a Harman Kardon audio system and frameless doors. 

Context: Lynk & Co reported a modest 6% year-on-year growth in sales for the first half of this year, while its peer Zeekr, a premium electric vehicle brand launched by Geely in early 2021, posted a remarkable 124% annual growth over the same period. Seven-year-old Lynk & Co, which formerly focused on China’s gas-powered vehicle segment, sold 180,127 vehicles last year, representing an 18.3% decline from a year ago.

• Ecarx announced the incorporation of the Flyme Auto into the Lynk & Co 08 SUV in March, followed by the public debut at this year’s Auto Shanghai show a month later. 
• Ecarx was founded by Geely chairman Eric Li and close associate Shen Ziyu in 2016, and set up a joint venture, SiEngine, to develop auto chips with Arm China two years later, Reuters has reported.
• Geely entered the smartphone industry with the establishment of a venture called Xingji Shidai in 2021, and renamed it Xingji Meizu after it acquired smartphone maker Meizu in mid-2022. 

BYD’s most credible competitor to the Tesla Model 3 would have a 25% cost advantage over models produced by European automakers even if it were manufactured locally in the continent, UBS said on Tuesday, taking costs resulting from protectionism into account.

Why it matters: The findings demonstrate the growing competitiveness of Chinese automakers led by BYD in making centralized, unified, and up-to-date car systems with highly integrated components and self-run supply chains, UBS analyst Paul Gong told reporters in Shanghai on Tuesday. 

• This could help Chinese brands maintain their cost competitiveness even as they transition from exporting to local production in some of the world’s most developed markets. Gong made the comment after the investment bank completed a tear-down analysis of the BYD Seal, calling it “a good balance” between technological advancement and cost optimization.  

Details: New research from UBS’s evidence lab that took apart the Seal electric car, BYD’s closest peer to the Tesla Model 3, reveals that the medium-sized sedan is 15% more cost-efficient than locally made offerings by the US automaker at its Shanghai facility. 

• This percentage would be extended to 35% when compared to Volkswagen’s similar offerings manufactured in Europe. This means it would cost BYD $10,500 less to produce each Seal in China than a Volkswagen ID.3 in Europe, UBS analysts wrote in a Sept. 1 note. 
• For Chinese-branded EVs, exporting from China to Europe is cheaper than manufacturing locally. Even so, Chinese EV makers would still maintain a 25% cost advantage over rivals if they produced in Europe, Gong added. 
• UBS attributed the gap primarily to BYD’s technological and engineering integration of vehicle components. Additionally, the investment bank noted that 75% of the auto parts, ranging from batteries to power semiconductors, were made in-house. 
• BYD could strike a balance between performance and cost by offering a relatively simple assisted driving system at a cost of less than RMB 3,000 ($411), significantly lower than the industry standard of around RMB 20,000. 
• The teardown, aimed at uncovering the secrets of BYD’s success, reinforced UBS’s confidence in the rise of Chinese EVs. The investment bank expects Chinese automakers to double their global market share to 33% by 2030 and increase their European market share to 20% from last year’s 3% over the same period. 

Context: BYD began deliveries of the Seal battery sedan, its closest competitor to Tesla’s Model 3, at a starting price of RMB 209,800 last July, followed by the launch of a cheaper version from RMB 189,800 in May.

• The Warren Buffett-backed EV major said on Monday that it has sold more than 100,000 units of the all-electric vehicle in a year. The vehicles are mainly produced in the eastern city of Changzhou. 
• On Tuesday, at this year’s IAA Mobility show in Munich, the company announced that it plans to sell the Seal to European customers at a starting price of €44,900 ($48,184) in the first half of 2024.

Chinese EV maker Zeekr made a splash on Sept. 1 when it launched its first high-performance, track-focused vehicle – one which it hopes will establish new benchmarks in the field and compete with established brands such as Porsche and Tesla.

The 001 FR, which Zeekr is calling the world’s best-performance electric vehicle, uses four silicon-carbine motors for sophisticated torque vectoring, producing a powerful 1,265 brake horsepower, compared with 887 hp of the Porsche 918 Spyder.

The high-performance brake, completely redesigned from the original 001, can, the company claims, accelerate from 0-100 km/h (0-62 mph) in 2.07 seconds, faster than the 2.1-second acceleration to 60 mph of the Tesla Model S Plaid. The new model promises to be an everyday supercar, with a rapid battery charge from 10% to 80% in 15 minutes.

The debut comes at a time when Chinese manufacturers are rushing to launch premium offerings with eye-catching performance specs in a quest to upscale and compete in the global luxury EV segment. 

Zeekr has not released pricing details for the 001 FR, but has said the car will be made available in limited supply of up to 99 units a month from October. This will bring it into competition with another high-end rival, as BYD begins deliveries of its RMB 1 million ($150,000) electric SUV later this month. 

“Global luxury brands have ruled the performance car segment throughout the era of internal combustion engines … but Chinese electric vehicles are now capable of competing head-to-head against European top-tier supercars,” Andy An, chairman of Geely Auto Group and CEO of Zeekr told reporters in an interview after the launch. 

TechNode also spoke to Chen Qi, vice president of Zeekr and a former Huawei executive, about the company’s approach to autonomous driving as it looks to expand overseas. Geely’s premium EV subsidiary is establishing its footprint in Europe as part of its goal to deliver 140,000 units this year while looking to sell shares publicly in the US. 

Below are highlights from a group interview after the launch, which have been translated, condensed, and edited for clarity:

On limited production of the 001 FR 

An: The Zeekr 001 FR comes with a comprehensive list of high-performance equipment among which are extremely rare parts mostly needed and reserved for professional race cars. 

For example, more than 70% of Brembo’s carbon-ceramic brake systems are provided to today’s top-tier race cars, with less than 20,000 units available for road cars annually. We are individually crafting the 001 FR to ensure the highest standards of quality are attained, which together with other factors restricts the sports car’s output capacity to less than 100 units a month. 

Our customers have reacted remarkably well: the first 99 units of the 001 FR were sold out in 15 seconds after reservations opened [on Sept. 1] and the number exceeded our annual production capacity 20 minutes after that. I think this is because the 001 FR represents the state of the art as a sports wagon, which could improve sales and help establish Zeekr’s image as a technology-driven company. 

On Zeekr’s self-driving roadmap 

Chen: Zeekr has pursued a dual strategy of initiating in-house development as well as outsourcing to catch up with rivals in self-driving technologies. We are pushing forward a new program to bring autonomous driving for urban scenarios with future models using Nvidia’s semiconductor chips.

Meanwhile, it requires a relatively long period of testing and validation for existing Zeekr models to navigate Chinese urban roads with Mobileye’s advanced driver-assist technology. Mobileye has been an early mover in creating its digital maps to enable self-driving cars and we will use its assisted driving systems mainly in the European market. 

Automakers are deploying assisted driving technology on a city-by-city basis because more effort is needed to enhance the neural network’s generalization ability in various practical driving scenarios. [Editor’s note: Transformer is a new deep neural network architecture first mentioned in a 2017 Google paper and later used by Tesla to convert location data gathered by cameras into three-dimensional space for motion planning and control. Many assisted driving software have since been written using the transformer algorithm.]

We are accelerating efforts to roll out driver assistance software, first applicable on major Chinese highways, and we will then let our cars navigate complex urban streets automatically. 

On Zeekr’s US listing plan  

An: Zeekr will venture into the capital markets. But it is not the top priority for our management at the moment. There is no update on Zeekr’s listing plan following approval from the Chinese regulator. We will keep an eye on investor sentiment before taking a chance to go public. 

Zeekr has set an annual delivery target of 650,000 units by 2025 as one of the top three luxury EV makers worldwide since its inception and remains confident under pressure. We’ve made significant progress in a comprehensive way, including building a substantial cost advantage over competitors other than Tesla, and will reach the goal with the launch of a new model later this year, followed by two all-new ones in 2024 and 2025. 

On global expansion 

An: Zeekr started exports to Europe with 500 Zeekr 001 cars last month and will begin vehicle delivery first in Sweden and the Netherlands as early as September and in several other European countries next year. We are also preparing to enter regional markets including Southeast Asia, the Middle East, and Latin America, but will keep our focus on Europe at the moment. 

We expect to see a significant contribution to sales from overseas markets in the future. Chinese electric vehicles are gaining momentum in the global auto industry and we will make use of this to go upscale and expand globally.

READ MORE: Experts bullish on Chinese automakers’ global push as SAIC seeks EU foothold

Tesla has released the long-anticipated, redesigned Model 3 with a sharper appearance and a range of new features in China, although at RMB 259,900 ($35,809), its starting price is higher than expected, according to a poll published on Friday on the Chinese Twitter-like social media platform Weibo.

Why it matters: The US automaker’s pricing strategy for the revamped sedan had attracted enormous attention from Chinese customers prior to its announcement, due to the car’s significant success in the electric vehicle market and Tesla’s recent policy of price cuts in the country.

• Although the launch price is not as low as some were expecting, the revamped Model 3’s arrival has still caused some rival EV makers to announce new deals for Chinese drivers. Xpeng Motors reacted immediately on Friday by offering zero-interest financing for up to 24 months or a price reduction of RMB 10,000 to buyers of its P7i. New owners of the electric sedan, priced from RMB 249,900, will be given a RMB 6,000 Dynaudio audio system for free by the end of this month. 

Details: In a poll conducted on social media site Weibo on Friday, more than 15,000 out of roughly 21,000 respondents said that they would not consider buying the newly-designed Model 3 due to “insufficient budget or an overly expensive price tag” (our translation). 

• Roughly 3,400 participants expressed their intention to purchase the new Tesla as of writing, attracted by a “competitive price or new features.” The poll was released on Friday morning by Chinese internet portal Sina, the parent company of Weibo. 
• The new Model 3 would “have no equal” if it were priced at around RMB 200,000, yet some domestic brands are more attractive at the RMB 260,000 price range, a Weibo user with the handle Kejigangzi in Chinese Pinyin commented in one highly-upvoted response. 
• In an announcement posted by Tesla on its official Weibo account, some internet users spoke critically of the car’s pricing not meeting their expectations, stating that they would be waiting for the price to go down. 
• The EV giant on Friday launched the reworked mainstream premium sedan in rear-wheel drive and all-wheel drive versions, priced from RMB 259,900 and RMB 285,900, respectively, compared with its previous base-version Model 3 at a price tag of RMB 231,900. 
• The revamp comes after Model 3’s initial launch back in 2016, and sees an improvement in driving range from 556 to 567 kilometers (352 miles) for the baseline version. The all-wheel drive version has a driving range of 680 km, reportedly powered by a new Lithium Iron Phosphate (LFP) battery sourced from CATL. 
• The all-new Model 3 gets a 15.4-inch infotainment screen, slightly larger than the 15 inch one seen in the previous version, in addition to an eight inch display for rear passengers. It also introduces new features and equipment such as ambient interior lights and ventilated seats. 
• However, the updated Model 3 removes a physical shifter, replacing it with an automatic system that may ask users to activate gear shifting on the touchscreen, a feature unfamiliar to Chinese EV owners, an analyst who asked not to be named told TechNode. 

Context: Tesla initially began selling locally-made Model 3s in China at a starting price of RMB 355,800 in late 2019. The company shipped 412,805 units of the vehicle from its Shanghai facility during 2020-2022, making it the best-selling premium electric sedan in the world’s biggest EV market, according to figures from the China Passenger Car Association. 

• Tesla sparked an EV price war in China at the beginning of 2023 when it slashed prices across its range. The carmaker announced significant price cuts for the Model 3 and Model Y lineup in China on Jan. 6, with the Model 3’s starting price dropping RMB 36,000 ($5,314) to RMB 229,900, and the Model Y dropping RMB 29,000 to start at RMB 259,900.

READ MORE:  China EV price war: Xpeng, Huawei-backed Aito join Tesla in cutting prices

Xpeng Motors chief executive He Xiaopeng said on Monday that he anticipates annual sales for an upcoming model, co-developed with Didi Chuxing under a new brand, to reach 100,000 units, in an unexpected partnership between the electric vehicle maker and the ride-hailing platform.

Why it matters: The move marks Xpeng Motors’ latest effort to expand its product lineup and extend its brand reach into the fleet market. The alliance is expected to help Xpeng significantly reduce costs and generate economies of scale in the production of highly autonomous cars, said He.

• While the deal will help Xpeng accelerate its EV manufacturing growth and facilitate the development of self-driving technologies with more driving data, it can help Didi monetize its smart auto segment and attract drivers with vehicles suitable for ride-hailing, Bernstein analysts wrote on a Monday note.
•  Nonetheless, doubts were voiced over Xpeng’s ambitious sales goal, citing limited market size and fierce competition. “BYD was the only OEM (Original Equipment Manufacturer) to deliver more than 100,000 units, and the remaining top players all have their own ride-hailing affiliates,” wrote Bernstein analysts.

Details: Speaking to Chinese reporters during a media briefing, CEO He expressed confidence in the forthcoming A-class sedan, scheduled for production next year. He believes the model will enhance Xpeng’s performance, but does not specify a timeframe for his annual sales volume goal. The company delivered 41,435 EVs for the first half of this year with six namesake-branded models on sale.

• The EV startup is currently developing the model with assistance from Didi under a project codenamed Mona. He believes that this could become “a hit product” featuring Xpeng’s self-driving technology at an expected price tag of around RMB 150,000 ($20,594). 
• The compact sedan will also be the first model under a new mainstream sub-brand, which He said will be positioned to target the Chinese consumer EV segment while also facilitating Xpeng’s expansion within the fleet market segment.
• As part of the collaboration, Xpeng will acquire Didi’s smart EV business, which comprises the design, research, and development of EVs with intelligent features. This acquisition will be accomplished through the issuance of approximately HK$5.84 billion ($744 million) worth of new shares to Didi.
• China’s biggest ride-hailing service will become a strategic investor in Xpeng with a stake of 3.25% after the deal,  helping take Xpeng’s newly branded EVs nationwide via its strong shared mobility market, according to a statement. 
• In Hong Kong, Xpeng’s shares surged 10.9% to HK$72.2 on Monday following the announcement. 

Context: The news comes a month after Guangzhou-based Xpeng announced a collaboration with Volkswagen to jointly launch two VW-branded B-class EVs in 2026. B-class vehicles are normally larger than A-class vehicles and have larger engines.

• Xpeng is not the only Chinese EV maker exploring new brand options to reach a wider customer base. Rival Nio has recently made notable progress in the development of two entry-level brands codenamed Alps and Firefly, with both scheduled for launch in 2024. 
• Didi initially had ambitious plans for its carmaking business, assembling a team of 1,700 employees dedicated to working on the project, with the aim of releasing a consumer EV in mid-2023, multiple Chinese media outlets reported. It even launched a battery-electric hatchback tailor-made for ride-hailing in collaboration with BYD in November 2020, Bloomberg reported. 
• However, the ride-hailing giant had been under an 18-month investigation for alleged national security issues which began right after its mega-public listing on the New York Stock Exchange in June 2021. Meanwhile, Chinese authorities have imposed strict regulations on the release of EV production licenses in recent years.

READ MORE: What to expect from Volkswagen and Xpeng’s new partnership

Li Auto’s chief executive Li Xiang launched a series of business startup courses on Chinese audio content platform Dedao on Monday. With this move, the entrepreneur is aiming to tap a wider customer base and showcase his firm’s thought leadership, local media reported. 

Why it matters: During a livestream, Li mentioned that the target audience for his newly-launched online product development program significantly overlaps with Li Auto’s intended user base. He expects the marketing initiative to help the automaker further expand its influence in the electric vehicle market, media outlet Jiemian reported. 

Details: The program consists of 16 audio-based online courses, each lasting approximately 12 minutes, and aims to educate the audience about the fundamentals of product management, including the methodology for designing successful products, crafting powerful pricing strategies, and increasing operational efficiency and profitability.

• The program also offers insights into what makes a startup more competitive, including tips for building a collaborative and unified team, based on Li’s extensive startup business experience of over 20 years in the Chinese tech and auto industries. As of the time of writing, more than 15,000 users have subscribed to the paid program, priced at RMB 99 ($14), according to Dedao. 
• In one of the lessons observed by TechNode, Li recalled the initial challenges Li Auto faced while positioning itself as a manufacturer of EVs for Chinese families with children and grandparents, a potentially lucrative segment that was neglected by competitors, some of whom had voiced concerns that the customer base might be too small, Li said. 
• On the online education platform, some influential users have voiced their support for Li Auto and its founder. Li Auto’s success story is “worth learning and researching” (our translation), posted a user whose account was labeled as a manager at SAIC-Volkswagen, a Chinese joint venture of the German automaker.
• Li Auto entered a segment with high growth prospects and offered products at competitive prices for families, said another Dedao user, who labeled himself as a brand manager at Great Wall Motor. Li Xiang is already an outspoken and prolific user on China’s Twitter-like microblogging platform Weibo, with 2.2 million followers.

Context: Li Auto delivered 139,117 units of plug-in hybrid crossovers in the first half of 2023, surpassing last year’s total of 133,246 units. 

• The Beijing-based EV maker expects to deliver more than 100,000 units in the third quarter and anticipates posting monthly deliveries of 40,000 units during the last three months of this year, CEO Li told investors on Aug. 8.

BYD on Wednesday officially unveiled its newest premium marque with a performance-oriented plug-in hybrid off-roader. The Chinese automaker expects the new brand to signify personality and luxury, and is betting on it to help attract more of the country’s affluent middle-class buyers. 

With the launch of the Bao 5, BYD’s reply to makers of top-tier luxury off-roaders, China’s biggest electric vehicle maker is seeking to “redefine” a market segment that has been ruled by internal combustion engine cars (our translation), Chairman Wang Chuanfu declared during a press conference at BYD’s headquarters in Shenzhen on Wednesday. 

The name of the new brand, FangChengBao, translates literally to Formula Leopard. BYD said the new lineup responds to emerging and future demands for off-road travel with an edgy design, strong performance, and sophisticated personalized features. 

The architecture: The Bao 5, the first model under BYD’s new luxury lineup, is a large sports utility vehicle based on tailor-made PHEV architecture that is expected to underpin future EV performance. 

• BYD stated that its DMO (dual-mode off-road) PHEV platform splits up the car’s torque and delivers it to the wheels in a fluid way. This could provide enhanced traction and stability when driving on uneven and slippery surfaces and make the Bao 5 one of the most maneuverable SUVs on the market, with a turning radius of 3.4 meters (11.2 feet), according to chief scientist Lian Yubo. 
• The DMO platform has an in-house developed powertrain system that uses a 1.5/2.0-liter high-performance petrol engine along with a dual-motor rear-drive unit, delivering a combined output of more than 500 kW. This allows the spacious SUV to accelerate from 0 to 100 km/h (62 mph) in just 4.8 seconds, while its DiSus adjustable suspension system provides passengers with an improved experience on sideroads. 

Other details: The seven-seater SUV has a straightforward, boxy design with a lot of hard lines and angles. The car radiates a high-definition car-width strip of light in a rectangle ahead, and boasts luxury interiors including a high-quality stereo system provided by French audio engineering brand Devialet.

• The car comes with BYD’s blade battery, leveraging the company’s latest technology to place the cells in the chassis, allowing for single trips of up to 1,200 kilometers (746 miles) on a full fuel tank and a full charge. Lian added that the lineup’s upcoming models, ranging from sportscars to full-size SUVs, could travel between 800 and 1,500 km on one charge depending on powertrain and specifications. 
• No official pricing details have yet been released, but the new lineup is expected to have a price range of between RMB 400,000 and RMB 600,000 ($54,685-$82,028). The company will debut the car publicly at the upcoming Chengdu Motor Show on Aug. 25, with plans to open more than 100 direct-sales stores under the brand in 60 or so Chinese cities by year-end. 

Context: BYD first revealed its plans to develop a premium marque that “specializes in professional and personalized identities” last November. The company already operates two luxury brands, Yangwang and Denza, with price ranges between RMB 800,000 and RMB 1.5 million, and between RMB 300,000 and RMB 500,000, respectively. 

• In January, the automaker introduced the first two Yangwang-branded models, namely the U8 off-roader and U9 sports car, and is scheduled to begin delivery of the former in September. The two all-electrics come with four electric motors, have an 800-volt battery system, and can accelerate from 0 to 100 km/h (62 mph) in two and three seconds, respectively. 
• Denza’s general manager Zhao Changjiang wrote on the social media site Weibo that it has sold more than 100,000 D9 multi-purpose vehicles 10 months after delivery began last October. BYD on July 29 began delivering the N7 crossover with a starting price of RMB 301,800, the second model since its refresh of the brand in late 2021, and launched the larger N8 SUV on Aug. 5
• BYD sold 1.25 million pure electric and plug-in hybrid vehicles in the first six months of 2023, of which around 81,000 were exported EVs, representing a year-on-year growth of 94.3%. That number beat Tesla’s 476,539 units sold over the same period in China, of which nearly 40% were for overseas exports, according to figures from the China Passenger Car Association. 

BYD said on Wednesday it has produced a total of 5 million electric vehicles, a landmark that comes almost three decades after the company was launched in 1995. Chairman Wang Chuanfu choked up at a press conference in Shenzhen, wiping away tears as he called on domestic rivals to strive for leadership in the global market. 

Why it matters: The milestone reflects the accelerated shift towards green energy vehicles in the world’s biggest auto market, where Chinese manufacturers are revving up to compete with global automakers.

• It took BYD, originally a consumer electronics battery maker, almost two decades to achieve an output of 1 million EVs in May 2021, following its acquisition of domestic automaker Qinchuan Automobile in 2003. 
• The company then reached a landmark 3 million just 18 months later and accelerated again to hit 5 million vehicles nine months after that. 

Details: During the 50-minute press conference, Wang detailed the ups and downs of China’s largest electric carmaker, including how its plug-in hybrid technology was initially met with skepticism before becoming a mainstream vehicle segment.

• Wang foresees Chinese automakers establishing “world-class, respectable” car brands as the global auto industry transforms rapidly. In a show of solidarity, BYD exhibited multiple rivals’ EVs outside the venue at its headquarters in Shenzhen, including models from Great Wall, Zeekr, and Xpeng Motors. 
• Additionally, Wang estimated that new energy vehicles, including all-electrics and plug-in hybrids, will account for 60% of new car sales in China in 2025 and that Chinese brands will take a 70% share of the country’s auto market by that time. 

Context: The combined market share of domestic automakers rose by 5.8% year-on-year to 53.2% in July in the Chinese passenger vehicle market, according to figures published by the China Passenger Car Association (CPCA) on Tuesday.

• The market shares of German and US brands slightly declined to 20.8% and 7.7% respectively, while Japanese carmakers accounted for 15.8% of the total Chinese auto market, down 5% from a year ago, the CPCA figures showed. 
• Experts have suggested global carmakers take lessons from the Chinese industry so as to stay competitive in the coming years. 
• Advisory firm AlixPartners predicts that global car sales from Chinese companies could grow in market share from 16% last year to 30% in 2030.

Xingji Meizu, a smartphone company controlled by Geely founder Eric Li, has decided to discontinue its chip development business for cost-saving reasons. The move is expected to result in layoffs of dozens of staff members, including some fresh graduates, local media outlet Meiren Auto reported on Tuesday.

Why it matters: Xingji Meizu is the latest company to abandon its pursuit of critical and emerging technologies in the Chinese auto and tech industries, reflecting the challenges of a faltering economy and intensifying competition. 

• The news comes just days after electric vehicle maker Nio delayed the development of its own batteries to ease cashflow constraints. Similarly, in May, rival phone maker Oppo announced the closure of its chip design unit Zeku after five years of operations.

Details: In a statement sent to financial media publication CLS on Tuesday, Xingji Meizu said the company is closing down its in-house chip design program in the face of global economic uncertainties, and will instead sharpen its focus on product innovation and user experience.

• Xingji added that it will offer compensation as required by law, along with internal job transfer opportunities, to ensure the rights and interests of employees, especially fresh graduates, without revealing further details. Geely did not respond to TechNode’s request for comment. 
• The company’s chipmaking institute employs approximately 200 people, and dozens of recent graduates are likely to be impacted by the layoffs, according to Meiren Auto. “[The news] came just three weeks into the job,” one of the new employees told the outlet. 
• Development has mostly stalled since the launch of the institute, according to a person with direct insight into the company’s operations. Chief executive Shen Ziyu told Chinese reporters in March that emerging technologies, including chipmaking, were at the center of Xingji’s strategic efforts, alongside smartphones and in-car systems.

Context: Geely’s other affiliates have reported progress in semiconductor technology. The most recent example is the Lynk & Co 08 SUV featuring an in-car operating system built upon a supercomputing platform provided by Ecarx, another auto tech firm founded by Shen Ziyu and Geely’s Eric Li. 

• Siengine, Ecarx’s joint venture with Arm China, was responsible for designing seven-nanometer chips intended for use in computers in partnership with leading global chipmaker TSMC, Shen told Reuters back in March 2021.
• Xingji Technology, a company established by Li, acquired nearly 80% shares in beleaguered smartphone maker Meizu last summer, which preceded the establishment of Xingji Meizu and the release of Meizu’s first high-end handset series in two years this March.
• Xingji Meizu is also leading the business development of Geely-owned Swedish automaker Polestar in the Chinese market, having set up a joint venture with the EV maker in June. 
• Geely founder Li first revealed his plans to enter the smartphone market back in 2021.

Chinese battery manufacturer CATL has imposed restrictions on working hours for some positions within its facilities since the end of last year, according to an August 4 report by Chinese news magazine China Entrepreneur, as demand from the country’s booming EV sector starts to stall. Since November last year, CATL has been cutting salaries, curtailing night shifts, and enforcing an eight-hour workday structure for select positions, an employee at CATL’s production base in Sichuan province told the outlet.

Why it matters: CATL has been actively expanding its battery production capacity in recent years, with the battery giant operating more than 10 production bases across nine Chinese provinces. However, the Chinese EV market has been experiencing a slowdown in the pace of battery demand growth leading to overproduction concerns at the Ningde headquartered firm.

Details: Prior to CATL’s recent moves, a number of workers at the company’s battery plants were reportedly on duty 11 hours a day to earn higher performance-based salaries, amid strong demand for batteries in the electric vehicle (EV) market. 

• In June and July of 2022, when battery orders surged for CATL, workers were able to earn a monthly salary ranging from RMB 7,000 ($973) to RMB 8,000 ($1,112), China Entrepreneur reported, based on conversations with a CATL employee.  But during the first half of this year, those salaries have been cut by RMB 1,000 to RMB 2,000, the employee stated.
• From 2014 to 2019, CATL began constructing production bases in four Chinese provinces, Qinghai, Jiangsu, Fujian, and Sichuan, with a combined investment of RMB 49.4 billion.
• In 2020 and 2021, the company unveiled plans for the construction of six new production bases, with a total investment of RMB 67.5 billion, along with four extension projects budgeted at RMB 58 billion, according to calculations by a TechNode reporter.
• In 2022, CATL decided to build three new plant bases in China’s central Henan province, eastern Shandong province, and southeastern Fujian province, with a combined investment of RMB 41 billion.
• From January to June 2023, the total power of battery shipments in China reached 152.1 GWh, accounting for 51.8% of the full production capacity of 293.6 GWh, a significant drop from 54% in 2022 and 70% in 2021.
• CATL’s surplus stock of batteries has surged more than twelvefold in the past five years. According to the company’s annual financial reports, its battery stock was 5.55GWh, 10.53GWh, 14.17GWh, 40.19GWh, and 70GWh from 2018 to 2022. 

Context: The largest battery maker in China is experiencing a decline in domestic market share, amid both excessive battery capacity and fierce competition from other domestic battery manufacturers. 

• Sales of new energy vehicles (NEVs) surged to 374.7 million units in the first half of 2023, marking a year-on-year growth of 44.1%, according to data from the China Association of Automobile Manufacturers. However, the year-on-year increase rates for NEV sales were substantially higher in 2021 and 2022, at 160% and 93.4% respectively. Notably, in these two years, cumulative sales figures reached 352.1 million units and 688.7 million units.
• By 2025, China’s battery production capacity is projected to reach 3,000 GWh, far exceeding the expected demand of 1,200GWh, according to Chinese media outlet The Paper, which cited data from Tsinghua University’s Professor Ouyang Minggao, an expert on new energy vehicles.
• In the first half of 2023, CATL held a market share of 43.4% with a power battery shipment of 66.03GWh in China. This represented a decrease from 48.2% in 2022 and 52.1% in 2021, according to statistics from China’s battery industry association CABIA.

In July, more than 10 Chinese automakers reported deliveries of over 10,000 units of their electric vehicles, signaling a significant shift in China’s car market as newer entrants and previously smaller brands continue to increase their sales. Notably, Nio saw remarkable growth, nearly doubling its figures from the previous month, while Xpeng Motors surpassed the 10,000 threshold following months of lackluster performance. 

Why it matters: The latest ranking of the best-selling EV brands in China reflects the changing landscape in the world’s biggest car market. Although BYD and Tesla are still miles ahead of their competitors, local rivals are capturing market share with new product launches and aggressive price cuts as the sector’s intense battle shows no signs of abating.

Bright spot: On Tuesday, Nio announced that it had exceeded the monthly delivery threshold of 20,000 vehicles for the first time in its nine-year history. The firm’s July deliveries reached 20,462 units, nearly doubling its figures from a month earlier. 

• This achievement follows the company’s decision to implement an RMB 30,000 ($4,199) price cut across its vehicle lineups on June 12. Additionally, Nio began delivering the redesigned versions of its popular ES6 crossovers and ET5 sedans starting late May, when monthly sales hit a record low. 
• Xpeng’s July deliveries of 11,008 units also marked an important milestone, one which the EV maker attributed to a smooth production ramp-up of the G6. The mainstream sports utility vehicle recorded shipment of more than 3,900 units immediately after its launch on June 29. 
• The Guangzhou-based automaker is aiming to deliver at least 15,000 units as early as September and has recently received backing from Germany’s Volkswagen. However, its year-to-date deliveries fell 35% year-on-year to 52,443 units as of July. 

Other results: While BYD maintained its dominant position in July with a new sales record, GAC’s EV arm Aion made progress with its new premium marque, Hyper. Aion sold 45,025 units during the month, with 2,011 of them being the Hyper GT coupe, which it began selling on July 3. 

• Li Auto said it has sold more than 30,000 plug-in hybrids for two consecutive months as July deliveries grew 5% month-on-month to 34,134 units. Great Wall Motor followed closely behind with sales of 28,896 units, representing an 8% increase from the previous month. 
• Leapmotor also posted impressive growth in July sales, with a notable increase of 8% to 14,335 units compared to the previous month. Additionally, the Zhejiang-based automaker is reportedly in discussions with Volkswagen’s Jetta brand regarding the licensing of its technologies. 
• This was followed by Changan’s subsidiary Deepal and Geely’s affiliate Zeekr which delivered 13,172 and 12,039 units last month, up 64% and 14% on a sequential basis, respectively. However, Hozon’s numbers declined for the third month in a row, reaching 10,039 units. 

Context: In addition to Chinese automakers, several global auto majors also revealed some details of their July sales in China.

• Volkswagen’s joint venture with state-owned SAIC reported securing more than 10,000 pre-orders of its ID.3 after the German auto giant slashed the price of the locally-made electric hatchback by RMB 37,000 to RMB 125,900 ($17,523). 
• General Motors announced that it shipped around 10,000 EVs with its local partner SAIC last month, of which 8,692 were Buick EVs. Furthermore, SAIC-GM-Wuling, another venture between SAIC, the US automaker, and Guangxi Automobile Group, sold 35,000 units, up from 31,246 units a month ago.

Chinese EV giant BYD is taking on a record 30,000 fresh graduates this year, with research personnel accounting for 80% of the total intake, in a move intended to shore up its research and development department, a company representative has confirmed. 

Why it matters: The hiring drive comes as BYD looks to retain its dominance in the Chinese electric vehicle market as rivals continue to offer a competitive challenge. The move contrasts sharply with general hiring trends as China faces soaring youth joblessness. 

• China’s unemployment rate for those aged 16 to 24 rose to a record 20.8% in May, according to the National Bureau of Statistics. One Peking University professor said she expected that number could rise to nearly 50%, according to a July 20 report by Reuters. 

Details: Around 31,800 fresh graduates have come on board at BYD since the start of 2023, more than 61% of whom have a master’s or doctorate degree, and over 80% of whom will work in R&D projects. State-owned newspaper People’s Daily was the first to report the story on July 29.

• The Chinese automaker has been hiring research employees in electronics and electricals, new energies, and semiconductors, to be mainly based in Shenzhen, Shanghai, and the northwestern city of Xi’an, according to a job post on its official website. 
• A BYD spokesperson confirmed the news when contacted by TechNode, without offering further details. 

Context: BYD has been expanding its R&D team for several years with the number of engineers hired by the company growing 31.5% year-on-year to around 40,400 in 2021. That number increased 72.6% year-on-year to nearly 70,000 as of last year. The company had around 570,000 employees in 2022, of which around 75% were production workers, financial media outlet Caixin reported.

• The Chinese EV giant, which had a relatively late start in the autonomous driving field, recently hired between 4,000 and 5,000 software engineers, Reuters reported on May 17, citing the company’s senior vice president Stella Li. It has also been running an intelligent driving research unit in Shanghai since last year, the Reuters article said, while reportedly restructuring its vehicle engineering institute. 
• The company is rushing to reach the top end of its full-year sales target of 3.6 million EV units, which would almost double last year’s total. It has sold nearly 1.3 million units this year, as of June. BYD spent RMB 20.2 billion ($2.83 billion) on R&D last year, up 90.3% from a year ago, and has developed key components in-house including EV batteries, electric powertrain systems, and vehicle control technologies. 

In a historic development, Volkswagen said on Wednesday it will make electric vehicles in a joint effort with Chinese EV startup Xpeng via a $700 million investment plan. The news sent Xpeng stock rocketing as much as 40% during trading on Nasdaq. 

The move is expected to create a win-win situation that will help the two automakers secure their market shares in a brutally competitive market. However, analysts expect big challenges for the partnership. 

Both Volkswagen and Xpeng are in a relatively weak market position when it comes to EVs and face sluggish sales in the world’s largest EV market. Also, cultural clashes and different mindsets could potentially lead to friction in the partnership. 

TechNode spoke to various analysts on the ground about what lies ahead. While some saw the collaboration as being beneficial to both automakers, most saw challenges in the unprecedented deal between a German auto giant and a rising Chinese EV maker. 

A happy union?

The Volkswagen-Xpeng partnership makes perfect sense as they complement each other’s strengths, according to Yale Zhang, managing director of Shanghai-based consultancy AutoForesight. “Xpeng’s vehicle platform is state-of-the-art compared with rivals, while Volkswagen definitely needs a helping hand in making intelligent EVs,” Zhang said.

Elliot Richards, a correspondent at the Fully Charged Show, believes Volkswagen knows how to build good quality affordable cars and has an advantage in terms of economy of scale, while Xpeng has top-of-the-line software stacks with a more lively, fun, and risk-taking brand image. He expects the collaboration to help both “efficiently grow together” in China by pooling their resources.

Volkswagen could accelerate the launch of new EV models with the latest tech in the Chinese market through the alliance, predicts David Zhang, a visiting professor at Huanghe Science and Technology University. Volkswagen has had a relatively late start in electrification and its ID series lacks competitiveness in China, despite a decent performance in Europe, added Zhang.

Looming challenges

Daniel J. Kollar, head of Automotive & Mobility Practice at business development consultancy Intralink Group, said the problem is that neither has been able to effectively differentiate themselves in the market, so it is unclear whether teaming up will allow them to change that. Both foreign and younger Chinese original equipment manufacturers (OEMs) are having a rough time lately, experiencing trouble with penetrating the mid-tier and entry-level markets and gaining the trust of average Chinese consumers, Kollar added.

Meanwhile, cultural fit will remain a challenge in this collaboration. Pitting a rigid process-oriented culture from Germany against a fast and furious startup culture in China, has the potential for problems, according to Lei Xing, former chief editor at China Auto Review. As Xing put it, “Is VW willing to sacrifice certain things for speed?” 

Tu T. Le, founder of business intelligence firm Sino Auto Insights, also expects culture clashes as VW’s careful checks and balances are challenged by Xpeng’s much faster pace. “Volkswagen will have to let go of its want to centrally control everything and do its best to learn from Xpeng if it truly wants success,” according to Le.

There might also be wounded pride on Volkswagen’s part, as global carmakers that used to enjoy the upper hand are now acquiring technologies from newcomers, rather than licensing to them, AutoForesight’s Zhang stated. “This could become an invisible barrier and lead to tension in day-to-day collaboration,” he added.

Reasons for skepticism

Experts have voiced concern about the sales prospects of the two automakers given a relatively late launch date of two new models.

“By virtue of the investment, VW is hopeful that its EV sales can be turned around with these two new products, but the 2026 launch dates could be too little too late,” said Le. His comments were echoed by Xing: “The tie-up does nothing to guarantee the success of VW badged EVs with Xpeng tech ‘inside.’ Also for the time being, at least until 2026, it does nothing to influence the market performance of Volkswagen and Xpeng as each controls their own destiny.” 

Meanwhile, they do not foresee the tie-up with Volkswagen as having a significant impact on Xpeng’s sales and presence in the market, although licensing its technologies is potentially a recurring revenue stream for Xpeng.

Volkswagen will likely have to shell out a huge amount of money as a transfer fee for accessing Xpeng’s technology, which has been a common practice in such collaborations, said David Zhang. “Chinese auto manufacturers used to pay tens of thousands of RMB per unit to their foreign counterparts for localizing a vehicle model that came from abroad.”

Zhang added that the collaboration with Volkswagen could be a significant endorsement of Xpeng to boost its credibility in the European market. Aware of Xpeng’s recent momentum following the launch of its G6 crossover last month, Le also believes the cooperation with VW could help it more in Europe than in China. “Xpeng is still two or three successful products away from becoming a sales leader in the Chinese market,” added Le.

“The game has changed”

Kollar sees the Volkswagen-Xpeng partnership as the latest sign that the Chinese market is now ready for consolidation, which means more young, domestic EV makers are either going to go bust or be acquired. The best way for foreign OEMs to regain their previous standing and catch up in the EV sector is to become an acquirer of some of the promising players, Kollar predicts.

The tie-up ushers in a new era where foreign legacy automakers now depend upon Chinese EV makers for their technologies and speed to market, noted Lei. In this context, Volkswagen can be seen as playing a “pioneering” role yet again, having been one of the first major foreign car brands to enter China, and has now opened the floodgates for similar deals involving other foreign legacy automakers and local firms in the future. The German giant on Wednesday also announced an extended partnership between its Audi brand and China’s SAIC.

Global brands are recognizing that Chinese EV companies have progressed to the point that foreign companies have something to learn from them, said Stephen Dyer, a co-leader for AlixPartners’s Greater China business. “We can expect to see more Chinese auto players become part of the global community of strategic collaboration going forward.”

Richards added that, “They now need their local partnerships more than ever, but the shoe is on the other foot.” 

READ MORE: Experts bullish on Chinese automakers’ global push as SAIC seeks EU foothold

Chinese EV maker Nio will roll out a single-motor version of its first mass-market Alps model, as part of a lineup scheduled for delivery in the second half of next year, Chinese media outlet 36Kr reported. 

Why it matters: The plan to produce a more affordable single-motor car marks a rare shift for Nio, which has so far insisted on a dual motor on all its offerings to date, as this is responsible for Nio’s impressive acceleration and premium performance. 

• The move is expected to help the Chinese electric vehicle maker adapt and appeal to a wider group of customers as the country’s months-long EV price war pushes down prices. 

Details: The upcoming sedan under Nio’s mass market Alps marque will come with the company’s self-developed electric powertrain featuring a next-generation induction motor, the 36Kr report said, citing people familiar with the matter. 

• The car, priced between RMB 200,000 and RMB 300,000 ($27,951-$41,927), will be built on the third generation of Nio’s NT vehicle architecture, which features an 800-volt battery system that allows much faster recharging than existing offerings, the report said. 
• The decision was, says the report, made after Nio announced an RMB 30,000 price cut across its lineup on June 12 in a move to defend market share as rivals reduce prices to boost sales. 
• Nio did not respond to TechNode’s request for comment. 

Context: Nio’s chief executive William Li on June 9 told investors that the company is on track to launch the first model under the Alps marque in the second half of 2024. 

• It is also reportedly in the development phase for another lower-end, budget sub-brand codenamed Firefly. The car has a target price range of between RMB 100,000 and RMB 200,000 ($13,985-$27,969) and is expected to first launch in Europe later next year. 
• Year-to-date deliveries of the Shanghai-based EV maker reached 54,561 units as of June, representing a year-on-year growth rate of 7.3%. It currently has eight models on sale, all equipped with dual motors. 
• China recorded sales of more than 3 million new energy passenger cars (a combined total of pure battery EVs and plug-in hybrids) over the same period, up 37.3% from a year ago, according to figures from the China Passenger Car Association. 

A Chinese joint venture between Volkswagen Group and SAIC Group will start building its own plug-in hybrid electric vehicles in a move to follow the growing adoption of PHEVs in the world’s biggest car market, Chinese media outlet Caixin has reported.

Why it matters: The move marks Volkswagen’s efforts to become more localized and step up its introduction of new electric vehicle (EV) models in China, where it is losing ground to electric rivals such as BYD and Tesla. Its premium brand Audi is also looking to develop EVs with the purchase of partner SAIC’s electric vehicle platform.

• The current offerings from global automakers’ JVs in China are not competitive on the EV and software side, resulting in continued market share loss and prices that remain under pressure amid overall lackluster demand, UBS analysts wrote in a June 16 note.

Details: According to the July 22 report by Caixin, SAIC-Volkswagen has yet to reveal detailed plans on any specifications or launch information for the new model.

• And yet, the move is expected to “unleash the power” of the joint manufacturer, and employees were fed a free meal to celebrate the decision, the report said, citing people familiar with the matter. SAIC-Volkswagen did not respond to TechNode’s request for comment.

Context: SAIC-Volkswagen currently has two PHEV models on sale, namely the popular Tiguan sports utility vehicle and the mid-sized Passat sedan, with a starting price of RMB 261,050 and RMB 233,150 ($36,268 and $32,392), respectively, according to its official website.

• Retail sales of the company declined 0.1% year-on-year to 532,509 units for the first six months of this year, while those of rivals such as BYD and Tesla grew 82.2% and 48.9% from a year earlier.
• Sales for FAW-Volkswagen, another China joint venture formed by the German automaker, were down 2.8% to 838,723 units in the same period, figures from the China Passenger Car Association (CPCA) show. VW Group delivered 321,600 battery EVs (BEVs) globally over the period, according to its filings.
• PHEVs have continued to gain momentum over the past few months in China, with year-to-date sales nearly doubling to around 995,000 units in China from a year ago, compared with a 19.8% annual growth rate of BEV sales, according to CPCA figures.
• A PHEV normally carries a smaller battery pack than BEVs with similar specifications, which could mean a lower purchase price. It also reduces owners’ concerns about their EVs running out of power by using both a battery pack and a gas-powered engine.

Nio announced on Thursday that it has updated its battery leasing program to allow drivers to replace their battery packs with a higher energy density one daily rather than after months or years, as was previously the case.

The Chinese EV maker also reaffirmed an earlier commitment to expanding its battery swapping and supercharging network, as a way to showcase what it sees as the superior experience offered to Nio owners, including easy access to recharging ports.

Why it matters: The daily package may present new challenges for Nio, given its already large and dispersed power infrastructure deployment across China. Despite this, it is expected to draw in revenue as it offers greater convenience to users and lowers the purchase prices of Nio’s EVs, senior company executives told reporters at a press briefing in Beijing. Nio has recently experienced cashflow pressure amid slowing sales.

Details: Customers who currently have a 70/75 kilowatt-hour (kWh) battery pack for their Nio EVs may now swap the battery for a so-called “long-range” one (100kWh) for an extra fee of RMB 50 ($7) per day and will be able to return it to any Nio swap station in China.

• The service option is part of Nio’s Battery-as-a-Service (BaaS) leasing program, which was launched in August 2021 and has since allowed Nio owners to upgrade their batteries for longer driving ranges with a monthly and yearly fee of RMB 880 and RMB 9,800, respectively.
• In the last two years to Thursday, Nio has provided 80,000 upgrades, according to the company’s president Qin Lihong. He added that number could surge by “several hundred thousand” over the next year, as customers take advantage of the flexibility afforded by a longer driving range at a relatively low cost.
• Still, senior vice president Shen Fei acknowledged that the move could put the company under “exponential” pressure to operate its consistently growing swapping network when it comes to the transport and allocation of battery packs across the nation (our translation).
• He cited an extreme case in which 100 kWh battery packs could be in short supply during hot weather in Beijing as owners travel to summer resorts. “I believe we’re well prepared, but we haven’t foreseen all the potential problems with this,” said Shen.
• Qin reaffirmed Nio’s efforts to double its number of swap stations to more than 2,300 by the end of the year, adding that the company has established 500 ultra-fast chargers since April, with a maximum power output of 500 kW and a maximum current of 660A.

Context: Nio owns and operates one of the largest recharging networks in China with 1,564 swap stations and 16,745 public chargers as of Thursday. It has swapped over 25 million EV battery packs, meaning a Nio car is starting up with a replenished battery pack every 1.6 seconds, said Qin.

• The automaker faced cashflow issues until recently when Abu Dhabi’s CYVN Holdings provided relief with a $1.1 billion investment. As a result it has scaled back production of its proprietary EV batteries. It cut prices of its vehicle lineups by RMB 30,000 ($4,199) on June 12, with year-to-date deliveries growing by 7.3% to 54,561 units as of June.

READ MORE: Nio bets big on battery swap stations amid growing EV price war

China’s battery giant CATL is considering a bid for exploration rights to two domestic lithium mines in the southwestern Sichuan province. The electric vehicle battery maker recently established a new mining subsidiary to comply with the bidding process, a local media outlet has reported. 

Why it matters: CATL’s interest in two new lithium mines signals its intention to further integrate upstream resources amid already-volatile battery supply chains. 

• However, CATL may find it hard to extract the abundant lithium resources in a safe and cost-efficient way due to poor geological conditions in the plateau areas, the report added, citing a Jan. 12 research note on lithium supply by Guosen Securities. 

Details: CATL set up a new mining company called Maerkang Times Mining (our translation) through a subsidiary, with a registered capital of RMB 300 million ($42 million), according to the Chinese enterprise database Tianyancha. 

• The new firm has listed its main business interests as mineral resource exploration, development of new raw materials, as well as mineral washing and processing. CATL set up the entity with the intention to bid for two local lithium mines, state-owned media outlet The Paper reported on Monday. 
• This comes just days after China’s Ministry of Natural Resources kicked off bidding for exploration rights to two lithium mines in Maerkang city and nearby Jinchuan county on June 20. The two licenses will be put up for an unreserved auction at a combined starting price of RMB 3.76 million early next month, according to government filings. 
• Industry watchers expect the two mines to hold an impressive amount of lithium, as the China Geological Survey reported “significant findings” related to mineral resources in Maerkang during 2019-2020, with an estimated lithium oxide equivalent content of over 1.8%. Jinchuan reserve is expected to hold oxide content reaching 1.3%, the report said. 
• CATL did not respond to TechNode’s request for comment. 

Context: China’s surging adoption of EVs has in turn created more business moves in the mining space. 

• CATL in January reportedly secured regulatory approval for a massive RMB 6.4 billion acquisition of Sinuowei Mining Development Co. Ltd, a bankrupt lithium mining firm that has exploration rights to a local mine with an average grade of 1.18% lithium oxide in western Sichuan. This translates into a reserve of around 24.9 million tons of lithium ore. 
• Zhite New Materials, a lithium miner formerly backed by CATL, in February won an RMB 6.1 billion bid to develop lithium reserves in China’s Xinjiang Uygur Autonomous Region, Yicai reported. However, the firm failed to complete the transaction on time and in April was barred from upcoming auctions for three years by local regulators, Caixin reported. 
• Battery-grade lithium carbonate prices reached a peak of nearly RMB 600,000 per ton late last November before sinking to around RMB 180,000 in China in April. Lithium remains a wild ride for commodity investors as prices then bounced back to around RMB 300,000 on May 18, according to figures from industry consultancy Mysteel Group. 

Audi is considering buying authorization for an electric platform directly from a Chinese electric vehicle company in order to enhance the competitiveness of its electric cars, according to a July 9 report by German media Automobilwoche.

Why it matters: The news has attracted 7.2 million views on China’s Weibo as of writing. BYD, Geely, and Xpeng Motors, with years of experience making cars on their dedicated EV architectures, are seen as among the most likely options by Chinese netizens.

Audi and Chinese electric platform: The Automobilwoche report did not specify which Chinese companies Audi was in talks with. And yet the plan has already been approved by Volkswagen Group CEO Oliver Blume and will be confirmed by Audi’s board this week, according to a Tuesday report by Automotive News Europe.

• The move is expected to accelerate the development and roll-out of Audi’s future electric models in the hope of catching up with rivals, especially in China. A company spokesperson declined to comment when reached by TechNode on Wednesday.
• ​​In September 2021, BYD launched the 3.0 version of its e-Platform, a dedicated battery vehicle architecture, which the Chinese biggest EV manufacturer said would enable a driving range of more than 1,000 kilometers (620 miles) and offer improved driving safety with its combustion-proof “blade battery.”
• Previously, Audi was said to be set to purchase BYD’s DM-i plug-in hybrid drive systems for its A4L sedans, but this was later denied by BYD’s spokesperson Li Yunfei, local media outlet Jiemian reported last November. BYD has been supplying its blade battery packs to Audi’s Chinese manufacturing partner FAW Group for its Hongqi marque since 2021.
• Geely launched its open-source, ground-up EV platform, called Sustainable Experience Architecture (SEA) in September 2020. Multiple EV models have been built upon it since then, including Zeekr’s 001 hatchback, the Smart #1 small SUV, and the Polestar 4. Volvo’s parent is now a partner of Renault in developing hybrid systems, Reuters reported.
• Xpeng Motors in April unveiled its Smart Electric Platform Architecture (SEPA) 2.0 with the debut of its G6 crossover. The platform features an 800-volt battery system, massive aluminum die casts, and assisted driving technology that currently allows vehicles to navigate by themselves on busy streets in China’s first-tier cities.

Context: Audi began selling its Q4 e-tron crossover with partner FAW with a price range between RMB 300,000 and RMB 380,000 ($41,729-$52,857) in China last May. It is built upon Volkswagen’s MEB open vehicle platform, as are Audi’s Q5 e-tron seven-seater and Volkswagen’s ID.6 SUV.

• Sales of Audi declined 15.6% in a year to 136,416 units in China during the first three months of this year, when peers BMW and Mercedes posted around 195,000 and 191,000 units, respectively.
• Volkswagen said on June 29 that a new Audi CEO will be on board from September 1, as it hopes to produce EVs only from 2026. Audi’s current lineup is not “competitive,”, especially in China, Blume told investors on June 21.
• ​​The product offerings from global carmakers are not competitive on the EV and software side, resulting in continued market share loss, while pricing remains under pressure in an environment of overall lackluster demand, UBS analysts wrote in a June 19 note.

As Chinese automakers begin to beat overseas rivals on their home turf for the first time, analysts at AlixPartners, a global consultancy, expect their international push to net them a 30% global market share by 2030.

Among the biggest Chinese car manufacturers, SAIC and BYD have announced plans to build their first regional facilities in Europe and South America for easier access to booming EV markets through local production. Chinese EVs have already made big in-roads into the reputational market for stylish designs, high-tech features, and low cost.

Established global carmakers, no matter where they are operating, can only maintain their competitive positions by learning from the Chinese industry, Stephen Dyer, a co-leader for AlixPartners’s Greater China business, told reporters on Wednesday in Shanghai. “Those that ignore this future disruptive force do so at their own peril,” he said.

The big picture

AlixPartners sees recent moves by Chinese automakers as a way to further boost sales volumes and reduce risks from volatile exchange rates and potential logistics issues in overseas operations. China overtook Japan as the world’s top vehicle exporter in the first quarter of 2023 and is extending its international presence from under-developed regions to more developed ones such as Europe.

A major threat to western original equipment manufacturers (OEMs) could emerge by 2030 in the shape of Chinese carmakers. AlixPartners expects the latter’s global car sales to grow in market share from 16% in 2022 to 30% in 2030. In Europe, market share could grow from 2% to 15% over the same period, while Latin America and Southeast Asia show even greater potential with Chinese carmakers expected to have an estimated 19% market share in each by 2030, up from just 1% last year.

Dyer said he is convinced that Chinese brands could achieve success in the highly competitive European market, by employing the same “winning formula” they have been crafting at home. “Chinese automakers will have a chance to win favor, especially from younger European buyers, with their in-car technologies,” added Dyer, speaking in Mandarin Chinese (our translation).

Lessons to be learned from China

AlixPartners suggests global automakers may need to rethink their emphasis on traditional vehicle attributes such as durability and handling, adapting fast as Chinese-style competition comes to their markets.

Chinese brands have made a mark by providing feature-rich offerings at affordable prices, responding to local consumers’ preferences for stylish design, engaging interiors, and advanced technologies while accepting “good enough” reliability and performance, said Dyer.

READ MORE: Chinese carmakers showed up big time at Auto Shanghai 2023

Nearly 60% of Chinese-brand vehicles sold in 2022 and priced between RMB 80,000 and RMB 120,000 ($11,040-$16,560) were equipped with advanced driver assistance systems, considered a standard feature on higher-end models, compared with only 15% sold by foreign brands, according to AlixPartners’ analysis.

China’s homegrown makers, especially the younger ones, take a less cautious approach to vehicle development with an aggressive appetite for risk, using digital simulations to reduce the amount of physical testing for fast development and delivery to the market. Traditional overseas carmakers normally complete two years of extreme winter and summer testing, while Chinese brands often carry these out simultaneously in different parts of the world, according to Dyer.

Automakers’ latest plans

AlixPartners estimates that Chinese brands will secure a combined 51% share of China’s auto market this year, taking gas-powered vehicles and EVs into the equation, versus 49% by their foreign counterparts. This would mark the first time that Chinese automakers would have overtaken their more established foreign rivals in the market.

Having become leading forces in the world’s biggest EV market, brands such as BYD, SAIC, and Chery are upping their efforts to expand overseas by announcing the establishment of new plants near their local customers. 

SAIC said on Tuesday that it has been searching for a site for the carmaker’s first EV manufacturing facility in Europe in a move the company said would help secure a stable business environment over the long term, Chinese media outlet Caixin reported. Volkswagen’s Chinese partner expects sales to almost double to 200,000 units this year.

On the same day, BYD unveiled its plan to establish a $620.2 million industrial complex in Brazil, which will include three plants for the production of EVs and key components and is scheduled for operation as early as mid-2024. This would be the first production hub outside Asia for the Warren Buffett-backed EV giant. BYD is also reportedly closing a deal to take over a German factory from Ford.

Another giant Chery is mulling several facilities in the UK and Southeast Asia, while GAC and Great Wall Motor have similar plans in Thailand and Vietnam, respectively.

Note: This article was first published on TechNode China (in Chinese).

China has been making strides in vehicle electrification for some time, with an eye to digitizing its entire automotive industry. As a key part of this shift, Chinese EV makers are currently competing to produce the most comprehensive assisted driving systems, endeavoring to turn their offerings into key selling points as the market matures.

Here, TechNode takes a look at the assisted driving software of three leading players in the Chinese EV sector.

Xpeng’s NGP advanced driver assistance system

The Advanced Driver Assistance System (ADAS) is the standout feature of Xpeng’s new model, the G6. The car has possibly the most advanced autonomous driving technology in China: with its 31 smart sensors, the G6 outperforms its competitors. Dual forward-facing LiDAR sensors, millimeter-wave radar, cameras, and ultrasonic radar throughout give the vehicle the tools to sense and see all around its body. 

In urban settings, the City NGP (Navigation Guided Pilot) smart navigation-assisted driving tool enables seamless travel along accessible city roads. Once a user inputs a destination and activates the tool, the vehicle maintains its position within its chosen lane, performs necessary lane changes or overtaking maneuvers, merges on and off roads, navigates around stationary vehicles or obstacles, recognizes and passes through traffic light intersections, circumvents loop roads, steers clear of construction zones, and evades pedestrians and non-motorized vehicles, on its way from inputted A to B.

The G6 comes with Lane Centering Control (LCC), a Lidar-based adaptive cruise and lane-centering feature that also enables the car to maintain optimal cruising speed. Linked to Xpeng’s advanced XNet neural network, the system processes 4D information on dynamic targets, including size, distance, position, and speed of vehicles and two-wheelers, as well as 3D information on static targets: lane lines and road edges from above.

Compared to Xpeng’s first-generation visual perception architecture, the XNet employs neural networks to replace manual post-processing, enabling end-to-end algorithm optimization. It boasts enhanced 360-degree perception, covering more than eight lateral lanes, demonstrating superior performance, and improving lane change success rates. Uniquely, this vehicle relies on vision-based recognition and display capabilities, becoming the first in the industry to not rely on mapping. It includes detailed rendering and visual representation of traffic participants and road infrastructure surrounding the vehicle. Drivers can see lane markings and nearby vehicles on the in-car map. XNet also recognizes and displays traversable areas, traffic lights and turn signals, setting a new industry standard. 

On highways, the system can efficiently execute autonomous lane changes, lane selection, and overtaking maneuvers by assessing the surrounding environment and required driving tasks, such as avoiding traffic restrictions and adhering to speed limits. It also provides seamless on and off-ramp transitions while switching between high-speed driving modes, ensuring improved straight-line stability and enhanced cornering.

Li Auto’s City NOA smart driving 

By putting strategic effort into smart software and electric power, Li Auto has made huge strides in smart space (SS) R&D, smart driving, and high-voltage fully electric platforms. With its own large model called Mind GPT, Li Auto will soon begin testing its City NOA smart driving system.

Li Auto’s smart driving system doesn’t depend on high-precision maps, as it utilizes a bird’s eye view (BEV) large model to perceive and comprehend road structure information in real time. The BEV large model has undergone extensive training, enabling it to generate stable road structure data on most roads and intersections in real time. Neural Prior Net (NPN) refers to a set of neural network parameters which are difficult for humans to directly interpret when dealing with complex intersection patterns. The large model effectively deciphers these patterns. Compared to high-precision maps, NPN replaces human rules with network models for better understanding and use of environmental information.

For complicated intersections, it’s essential to conduct advanced intersection NPN feature extraction. On a vehicle’s second approach to an intersection, the previously extracted NPN features are retrieved and combined with the BEV feature layer from the vehicle’s large-scale perception model, resulting in what the company says is an optimal perception outcome. In addition, the “AI driver” must comprehend the traffic light regulations at the intersection, posing another challenge on urban streets. The prevailing method involves devising a rule-based algorithm to interpret traffic lights and road use intentions. Li Auto prefers to rely on a large model to address this issue.

To navigate complex urban roads, Li Auto trained a Traffic Intention Net (TIN) to do away with the need for software to interpret pre-set human traffic regulations or even know the exact position of a traffic light. The system will input video footage into the TIN network model, and it will directly indicate the appropriate vehicle maneuver – turn left or right, go straight, or stop and wait. By analyzing the reactions of a large number of human drivers to signal changes at intersections, the performance of the TIN model is highly refined. To ensure the “AI driver” emulates human drivers’ judgment and driving patterns, Li Auto trained the AI with a huge amount of real driver behavior data, making NOA’s decision-making and planning more human-like, while maintaining safety and adherence to traffic regulations.

NOA is designed to accommodate more than 95% of commuting situations for car owners. While using NOA for commuting, each model will receive continual updates and training. In the latter half of the year, Li Auto plans to introduce the NOA commuting feature and expand urban NOA coverage, with the goal of allowing early adopters to commute using NOA’s navigation-assisted driving.

Huawei Aito’s second-generation autonomous driving system

The M5 smart drive edition released by Huawei’s automotive brand Aito sees the debut of the telecom giant’s second generation autonomous driving system ADS 2.0, which offers a comprehensive fusion perception system made up of various sensors working together to provide 360 degree coverage. This fusion perception system consists of 1 LiDAR, 3 millimeter-wave radars, 11 camera sets, and 12 ultrasonic radars, allowing for distance detection of up to 200 meters. The Aito M5 employs network technology based on fused BEV perception capabilities that can identify objects outside the standard obstacle whitelist. Paired with a road topology inference network, the Aito M5 is designed to drive efficiently with or without a map, equipped to see, understand, and navigate regardless.

The Aito M5 can handle changing light conditions in tunnels and minimize the impact of nighttime glare. It can accurately identify pedestrians, vehicles, and obstacles with ease. On urban roads, the car actively maneuvers around obstructions caused by other vehicles and the company claims it can deal with pedestrians carelessly opening car doors or unexpected cyclists emerging from a blind spot. Even in the most challenging conditions, such as intense glare at night, the Aito M5 can brake at speeds of up to 50 km/h.

With assisted driving capabilities, the M5 can merge onto and off highway ramps with a 98.86% success rate. The reliable long-distance piloting system has an average Miles Per Intervention (MPI) of up to 114 km, rivaling experienced drivers.

The Huawei ADS 2.0 package comes with 19 features as-standard, such as high-speed Lane Centering Control (LCC), urban LCC, and high-speed Navigation-based Cruise Assist (NCA). Additionally, the optional advanced package offers urban NCA, Automated Valet Parking Assist (AVP), and enhanced LCC for urban areas.

Huawei’s Aito is the first car brand to achieve high-speed urban smart driving capabilities without relying on high-precision maps, bringing the assisted driving experience significantly closer to the L3 level of autonomy. According to Huawei’s roadmap, its mapless functionality will be introduced in 15 cities, including Shanghai, Guangzhou, and Shenzhen, during the third quarter of 2023. By the fourth quarter, coverage will encompass 45 cities.

A sophisticated race to autonomy 

The race to launch assisted driving in the Chinese market is well underway. As time goes on, we can expect more car companies and self-driving solution providers to join. China’s Ministry of Industry and Information Technology (MIIT) plans to introduce an updated standard system guide for smart, network-connected vehicles, which will accompany the competition as it intensifies further.

Denza, a luxury car subsidiary of Chinese electric vehicle maker BYD, released its first SUV model N7 on Monday, priced from RMB 301,800 ($41,705). The company said it has received more than 24,000 pre-orders since its public unveiling on April 18.

The N7 is also the first model equipped with BYD’s assisted driving technology and will be capable of navigating on complex urban roads in China early next year, general manager Zhao Chaojiang said during the press conference.

Why it matters: BYD’s latest launch shows its intention to elevate the brand and secure a foothold in the premium market. The budget-friendly automaker is hoping its sub-brand Denza will become a luxury marque, and the launch of the N7 is a crucial step towards achieving this goal.

• The N7 will also be seen as a test of the company’s aspirations and its ability to beat rivals like Tesla, Huawei, and Xpeng when it comes to autonomous driving features.

Intelligent driving: The top-end version of the N7 features a hardware suite of 33 high-precision sensors, including two 8-megapixel cameras and two lidar sensors, and is powered by Nvidia’s Drive Orin processor which offers 254 trillion operations per second (or TOPS). By comparison, Xpeng’s G6 features 31 sensors and Nvidia’s dual Orin chips.

• Denza also revealed that its advanced driver assistance system (ADAS) will cost RMB 23,000. It will allow cars to change lanes, speed up, and slow down on Chinese highways when it is updated in the last three months of this year and on city streets by next March.
• By comparison, Huawei-backed Aito and Avatr last week cut the price of their similar offerings in half to RMB 18,000. Both will roll out their assisted driving tech for urban scenarios in 45 cities by year-end, according to Richard Yu, head of Huawei’s consumer business group.

Other details: The N7 has a driving range of 702 kilometers (436 miles) and can be refueled with an additional 350 km of range in 15 minutes by BYD’s proprietary dual charging technology. For comparison, Xpeng’s G6 can travel 300 km on a 10-minute charge.

• The five-seater battery electric crossover is also among several new BYD models to adopt the company’s body control suspension system DiSus for a smooth ride on bumpy roads, with Zhao on Monday claiming the function can eliminate car sickness.
• Zhao also told Chinese reporters that around a third of the N7 reservations were from existing owners of German brands such as BMW, Mercedes, and Audi. Delivery of the vehicle is scheduled to begin later this month and the company expects monthly deliveries to reach 10,000 units as early as October.

Context: BYD and partner Daimler first unveiled the Denza brand in early 2012 two years after the set-up of a joint venture to develop EVs for Chinese consumers. Denza in late 2019 began selling the X, a seven-seater SUV with a starting price of RMB 289,800, which was discontinued two years later.

• In late 2021, BYD announced plans to restructure Denza as the company reached a deal to buy an additional 40% shares of the JV from its German partner, Reuters reported. Last August, Denza launched the D9 multi-purpose vehicle, its first model after the rebranding, with a starting price of RMB 329,800, and posted deliveries of nearly 80,000 units as of writing.
• China’s biggest EV maker has been aggressively entering the high-end market with a growing portfolio of luxury brands including Denza, Yangwang, and an upcoming sub-brand called Fang Cheng Bao. The first two models under the Yangwang brand were priced from RMB 1 million; Fang Cheng Bao will specialize in professional and personalized identities, according to the company.

Chinese electric vehicle makers Nio, Xpeng Motors, and Zeekr on July 1 reported significant volume gains in June after months-long dips amid intensifying competition. Nio’s aggressive price cuts and Xpeng launching new models have spurred each to improved numbers.

Although BYD remains the dominant player in China, Aion, Li Auto, and Great Wall Motor are emerging as rivals with enhanced technologies and competitive prices, with the sector’s intense competition showing no signs of easing anytime soon.

Why it matters: Jefferies analysts forecast an 8% monthly growth in the wholesale volume of new energy vehicles to around 774,000 units in June and a 20% sequential increase in foot traffic in the industry. 

• Still, the ongoing price war could intensify across the industry during the upcoming summer slow season, as global automakers such as BMW and Mercedes widen their retail discounts and compete on price, Jefferies analysts wrote in a July 1 note.

Major improvements: Li Auto crossed another monthly delivery threshold, reporting delivery of 32,575 plug-in hybrid crossovers to customers in June, up from the 28,277 units a month earlier. The automaker’s year-to-date deliveries of 139,117 units have already surpassed its total unit sales from 2022. Chief executive Li Xiang previously stated he expects that number to get to more than 40,000 units later this year.

• Great Wall Motor also saw strong growth last month, as sales of its new energy passenger vehicles, including pure electrics and PHEVs, surged 110% year-on-year to 26,643 units following the recent launches of its new Haval-branded SUV and six-seater Blue Mountain. Jefferies analysts said sales of the Blue Mountain reached a similar level to Li Auto’s L8 in some areas last month, citing information from dealerships.
• Nio’s delivery figures bounced back to 10,707 units in June, following two consecutive months of lackluster sales of less than 7,000 units. The firm’s June figures were buoyed by its recent price cut across all lineups. 
• Zeekr reported slightly fewer deliveries of 10,620 units last month when it began shipping its third model Zeekr X, a compact crossover with a starting price of RMB 189,800 ($27,590). This figure was up 22.4% from May.
• Xpeng Motors also saw a solid recovery in June with deliveries of 8,620 units, which marked a 14.8% growth from a month earlier. That figure was still 44% lower than a year ago, however, yet the company’s newest model G6 SUV might give it a chance to get further back on track. Jefferies analysts expected the G6, with delivery scheduled for this month, to “surprise on the upside” with monthly sales likely to reach more than 10,000 units.

Other results: BYD sold 253,046 EVs in June (of which 11,058 were Denza-branded multi-purpose vehicles), a new record compared to the 240,220 it achieved in May. The company had projected monthly sales of its D9 premium vans to reach 15,000 units and is set to begin sales of its second model, the N7 crossover, on Monday.

• Aion maintained its growth momentum and delivered 45,013 vehicles last month, slightly more than the 45,003 units it reached a month earlier. The EV arm of state-owned GAC Group is also moving upscale with the launch on Monday of its Hyper GT, a coupe with a price tag of RMB 219,900.
• EV startups Leapmotor and Hozon are still catching up in the sector, with June deliveries of 13,209 and 12,132 representing a mild growth of 9.5% and a 6.9% reduction from a month earlier, respectively. They’re followed by Changan’s EV brand Deepal with deliveries of 8,041 units.
• Huawei-backed EV brand Aito continues to face growth challenges in an increasingly competitive market, reporting deliveries of 5,668 units last month. That figure brings its total delivery numbers for this year to just 27,541 units.

Context: UBS analysts expect Chinese carmakers to continue market share gains as foreign rivals see a shrinking demand for internal combustion engine vehicles. Chinese EV makers “are acting fast in terms of new model launches, with a better understanding of consumer’s needs,” wrote UBS analysts led by Paul Gong on June 19.

Chinese EV maker Xpeng on Thursday revealed the prices of its G6 sports utility vehicles at a competitive starting price of RMB 209,900 ($28,956), more than 20% cheaper than Tesla’s Model Y in China. The automaker is under growing pressure from investors to drive up sales with the new model after the months-long slump.

Why it matters: Speaking to reporters during an interview on Thursday, Xpeng’s CEO He Xiaopeng said that the G6, which has a similar size and appearance to Tesla’s Model Y, has the potential to achieve monthly deliveries of over 10,000 units.

•  He voiced confidence in a “positive” conversion ratio of its backlog reservations to orders following Thursday’s launch, adding that the company has received more than 35,000 pre-orders for the G6 as of Wednesday after reservations opened on June 9.

Details: The long-anticipated G6 five-seater is almost the same size as the Model Y. The new model measures around 4.75 meters in length, and 1.92 meters in width, and spans a 2.89-meter-long wheelbase.

• The higher-end version is powered by dual electric motors combining an output of 358 kW and maximum torque of 660 Nm, a bit higher than the respective 357 kW and 659Nm of the Model Y.
• The G6 accelerates from 0 to 100 km/h (62 mph) in 3.9 seconds, a bit slower than the Model Y’s 3.7 seconds, yet the crossover has a maximum driving range of 755 kilometers (469 miles), compared with the Model Y’s 660 km.
• Xpeng’s CEO also boasts a faster charging time for the G6, allowing additional travel of 300km on a 10-minute charge and greater powertrain efficiency than peers’ offerings, empowered by an 800-volt silicon carbide power module.
• The charging rate could be more than twice as fast as existing offerings with a 400V charging system, according to a Thursday statement from the company. Xpeng has operated more than 1,000 proprietary charging stations as of Friday and has had plans to add 500 ultra-fast charging stations this year.
• He added that Xpeng owners will be able to access the company’s automotive driver assistance system (ADAS), called the XNGP, for urban traffic roads without the utilization of high-precision maps in 50 major domestic cities during the second half of this year.
• Additionally, Xpeng will begin offering a so-called “AI Valet Driver” function to all XNGP users from the fourth quarter of 2023, allowing its vehicles to navigate on some fixed routes like an “experienced” human driver, according to the company. Rival Li Auto shared similar plans earlier this month.
• The G6 has a price range of between RMB 209,900 and RMB 276,900 ($28,956-$38,134), with the starting price being 7% lower than its previously announced tag of RMB 225,000. By comparison, the China-made Model Y currently costs from RMB 263,900 to RMB 363,900.

Context: Xpeng reported year-to-date deliveries of 32,815 vehicles as of May, a nearly 40% reduction from the same period a year earlier.

• President Brian Gu on May 24 told investors that it expected monthly deliveries to reach 15,000 units starting September when the G6 is scheduled for mass delivery.
• Xpeng’s shares rose 6.85% in Nasdaq during before-hours trading as of writing on Friday, although its shares have fallen 80% since the beginning of 2022.

Chinese automaker GAC Group on Monday showcased an electric, unmanned flying car prototype, a product it says can move both on the ground and through the air, in a futuristic plan to take its urban mobility to another dimension.

Why it matters: The debut makes GAC the latest Chinese automaker to promise riders flying taxis, a still immature technology, after the Toyota manufacturing partner began recruiting for a number of aircraft research and development engineering roles a year ago.

Details: The prototype, dubbed Gove, is being built on a modular system in which the flight and automobile components can be separated, meaning passengers could drive away the concept once it lands.

• GAC envisions a future where passengers can easily access multi-dimensional mobility services ranging from electric air taxis to ride-hailing platforms, according to Wu Jian, president of GAC Research Institute, who spoke at the company’s annual tech day event in Guangzhou.
• The automaker did not reveal many production details about the flying car, with Wu only mentioning that passengers within the Greater Bay Area where GAC is headquartered  would prefer a driving range of at least 200 kilometers (124 miles), Chinese media outlet Caixin reported.

Context: Several Chinese automakers have been working on electric vertical take-off and landing (eVTOLs) air taxis, but none have yet received approval for commercial use from local regulators.

• Aerofugia, an affiliate of Volvo’s parent Geely, said it had filed an application for operations of its prototype test aircraft with the southwestern bureau of the Civil Aviation Administration of China last year. Aerofugia’s AE200 eVTOLs have reached the airworthiness review stage, Caixin reported on April 7.
• Xpeng Aeroht, a startup backed by Chinese electric vehicle maker Xpeng Motors, said in January that it had been granted a regulator-issued certificate to pilot test its Xpeng X2 two-person flying car which has a battery life of 25 minutes. The company plans to start selling the next generation of its flying car with a price tag of around RMB 1 million ($138,596) as early as 2025.

Update: Xpeng Aeroht said on Tuesday that it would not sell its fifth-generation flying car, the Xpeng X2, which was previously referred to in this article as the Traveler X2, but has plans to sell the next generation of its aircraft as early as 2025.

China’s government on Wednesday announced a detailed plan to provide a full exemption of electric vehicles from purchase taxes in the next two years, an exemption that will be gradually rescinded from 2026. Beijing is also planning a pilot scheme to regulate passenger cars with partially and highly autonomous functions for potential large-scale operation, according to a deputy minister.

Why it matters: Industry players have responded positively to Beijing’s recent efforts to stabilize the EV market, where competition has heated up significantly in recent months.

• The extension of the EV purchase tax credit is “a big positive” from the market perspective, since automakers will be able to plan for new models and cost control going forward following Beijing’s early disclosure, BYD said on Wednesday (our translation).
• The government also underscored its strong support for EVs with swappable batteries, as battery prices will not be included in the dutiable value if a customer purchases an EV with a battery lease scheme, Nio’s chief executive William Li said on microblogging platform Weibo.

Analysts’ take: Bernstein analysts have voiced cautious optimism about the prospects for the world’s biggest EV market, as consumer confidence and credit impulses could be supportive of auto demand in the next few months after a slow recovery in car sales early this year.

• The long-term growth outlook for EVs “remains intact” as demand has shifted from government policy-led to consumer-driven, although EV sales growth is set to decelerate amid growing competition and overcapacity issues, Bernstein analysts wrote in a June 21 note.
• Jefferies analysts also hailed Beijing’s longer-than-expected tax credit as a positive sign, on Thursday forecasting China’s new energy vehicle sales, including all-electrics and plug-in hybrids, will reach 830 million units this year, up 27% from the 654 million units sold last year.

Details: EV buyers will be entitled to a 10% purchase tax exemption, or a credit of up to RMB 30,000 ($4,178) until the end of 2025. From 2026 to 2027, they will be taxed by 5% of the purchase price of their EVs, and the reduction amount will not exceed RMB 15,000 per vehicle, according to a government filing published Wednesday.

• The move is intended to maintain Beijing’s efforts to sustain the development of the EV industry and underpin China’s advantage in green car technologies, Xu Hongcai, deputy minister of finance said during a media briefing on Wednesday in Beijing.
• The Chinese authorities have put a limit on the amount of EV tax relief in an aim to ensure fair play and avoid luxury EVs, with some priced as high as RMB 1 million, taking extra resources, Xu said. He estimated total tax breaks to reach RMB 520 billion by 2027, up from RMB 200 billion as of last year.

L3 deployment: Meanwhile, the central government is planning a pilot scheme to officially lift the barriers to entry of passenger cars with semi-autonomous functions, or with the so-called Level 3 automation, said Xin Guobin, deputy minister of industry and information technology.

• Regional government authorities will also issue more permits for the commercial adoption of highly autonomous cars to operate in pilot projects, according to Xu, an endeavor that has been undertaken by a number of Chinese tech companies such as Baidu.
• Automakers are currently not allowed to market cars with L3 capabilities by Chinese regulators. In Level 3, or the partial autonomous level, the driver is required to take over the vehicle in emergencies, according to the definitions set by the Society of Automotive Engineers (SAE).

Li Auto on June 17 unveiled details of its first purely battery-powered electric vehicle with an expected price tag of over RMB 500,000 ($69,955), claiming its supercharging facilities could give up to 400 kilometers (249 miles) of charge in less than 10 minutes.

The company also announced plans to release an automated driving function that it says will allow commuting drivers to relax their grip in urban traffic later this year, aiming to attract tech-savvy Chinese customers.

Why it matters: Li Auto is catching up with rivals in deploying advanced driver assistance systems (ADAS) at a faster pace than expected, which could be a key differentiator in the driving experience for the company, according to a June 18 note written by Jefferies analysts.

• The analysts added that the price range of Li Auto’s first battery EV would be in a “sweet spot” that could ease margin pressure in the future. The Chinese carmaker for now has three extended-range electric sports utility vehicles on sale.

First BEV: Named Mega, Li Auto’s long-anticipated first all-electric is a multi-purpose vehicle with a price range of RMB 500,000 and above, vice president Liu Jie said at a corporate event on June 17.

• Capable of traveling 400 km after 9.5 minutes of fast charging, the vehicle is scheduled for release later this year.
• Liu also spoke of the company’s goal for the Mega to become the top-selling vehicle in its price segment, regardless of vehicle type.
• Li Auto has set an initial goal of delivering 5,000 Mega vans per month, Chinese media outlet Jiemian reported, citing company insiders. By comparison, Geely’s premium EV brand Zeekr in May delivered 2,106 units of its 009 MPVs, priced between RMB 499,000 and RMB 588,000.

Driver assistance software: Li Auto also revealed plans to begin internal testing of its automated driving function for complex urban scenarios, called city NOA  (standing for Navigate On Autopilot), with a cohort of selected owners in Beijing and Shanghai later this month.

• Vice president Lang Xianpeng said the company’s deep learning model would enable vehicles to perceive their surroundings and make decisions similar to human drivers, as its growing fleet of software users has effectively driven over 600 million kilometers (373 million miles) to date.
• Lang added the cars would be able to navigate on fixed routes for daily commuters in big cities with heavy traffic after the initial two to three weeks of training with its collection of datasets. The function will be rolled out to users from 100 major cities by year-end via over-the-air updates.
• Some rivals have announced respective plans to compete for users with similar offerings. Xpeng Motors’ XNGP function for urban driving is available to owners in four major cities, while Huawei aims to release its Autonomous Driving Systems to Aito owners in 45 cities this year.

Second plant: The accelerated move to BEVs also comes as Beijing-based Li Auto recently received a green light to open its second plant in the nation’s capital, according to a document (in Chinese) released by the Ministry of Industry and Information Technology on June 16.

• The company will build its all-electrics in the RMB 6 billion factory later this year, state-owned media outlet Beijing Daily reported in late 2021. Built on the base of an old plant owned by Korean automaker Hyundai, the facility will have an initial capacity of 100,000 units annually.
• Li Auto currently has one factory in operation at a monthly capacity of 30,000 units in the eastern city of Changzhou. Its year-to-date deliveries exceeded 106,542 units as of May and chief executive Li Xiang expected its monthly delivery to reach a milestone of 30,000 units in June.

US electric vehicle startup Fisker is planning to enter the Chinese market. The company has announced plans to establish its first regional delivery center in Shanghai, with deliveries scheduled to begin in early 2024, its China board member Daniel Foa told Chinese media outlet Yicai on Tuesday.

Why it matters: EV newcomer Fisker is trying to enter China at a time when some traditional global auto majors are struggling to maintain their market share in the country due to their slow transition to EVs. The move also highlights Fisker’s ambition to succeed in the world’s biggest auto market, following in the tracks of its US peer Tesla.

Details: Foa declined to comment on whether Fisker would deploy a direct sales model in China, as it has been doing in the US and Europe, or sell its vehicles through franchised dealers when interviewed by local media outlet Yicai.

• The report added that Fisker’s CEO Henrik Fisker held talks with Lingang Group during his recent visit to China earlier this month. Lingang Group is a state-owned industrial park developer that facilitated the establishment of Tesla’s Gigafactory Shanghai back in 2019 in the city’s Lingang New Area.
• Meanwhile, Fisker on June 9 revealed its plans to build a manufacturing plant in China with an annual capacity of 75,000 units as early as 2024.
• “We expect China to be an important growth market for EVs in the future and believe our vehicles will be very appealing,” said Fisker in a statement.
• China’s premium and affordable luxury segment is growing faster than general segments, Foa told investors on June 6, “This presents a vast opportunity for Fisker in China.”

Context: Fisker currently has two models on sale, the Ocean and the Pear crossovers, with starting prices of $37,499 and $29,900, respectively. It started making the Ocean sports utility vehicles with contract manufacturer Magna Steyr in Austria late last year and began delivery in Denmark in May, while rushing to hand the model over to US customers on Friday.

• Another US EV maker Lucid is also exploring a foray into China. The company hired Izzy Zhu, a former vice president at Nio and Baidu’s EV arm Jidu, to oversee its China business development. It has been recruiting for roles including supply chain and charging infrastructure management based in Shanghai since late last year.
• Chinese auto majors led by BYD are extending their lead over traditional foreign counterparts as a growing number of local customers favor EVs over gas-powered cars. Sales of FAW-Volkswagen and GAC-Toyota shrank 4.3% and 12.2% year-on-year in May, according to figures from the China Passenger Car Association.

Note: This article was first published on TechNode China (in Chinese). 

Chinese EV maker Nio announced on June 12 that it would be cutting prices by RMB 30,000 ($4,200) across all lineups and discontinuing its free battery swapping service, an unusual decision from an automaker that has repeatedly refused to enter China’s EV price war.

Among the leading Chinese EV startups (Li Auto, Xpeng, and Nio), Nio is currently facing increasing market pressure. As Chinese EV makers head into a critical competitive period, Nio has to adapt and strategize to secure a larger market share for itself. After all, maintaining a substantial scale is essential for newcomers to survive in the automotive industry. The second half of 2023 and early 2024 is a critical period for young EV makers to secure a healthy market share, as more new models are launched and more traditional major auto companies enter the competition.  

Nio has announced a price reduction of RMB 30,000 ($4,200) across all its new vehicle lineups, as well as adjustments to the rights of first-time buyers for newly purchased cars. Alongside these changes, the company has discontinued its free battery swap policy, replacing it with a paid service effective immediately. According to Nio’s announcement, starting from June 12, 2023, the first owner will receive a 6-year or 150,000 km warranty for the entire vehicle, and a 10-year unlimited mileage warranty for the main electrical systems (battery, motor, and control), among other benefits. The free battery swap service will no longer be included as a basic car benefit; instead, users may opt for a pay-per-use system when using Nio’s battery swapping service. Nio also mentioned plans to introduce flexible charging and swapping service packages for its customers.

In essence, Nio is separating its battery swap service from the vehicle price, leading to a lower overall purchase cost. Instead of a straight price cut like Tesla’s previous approach, Nio is offering a reduced package, by removing perks such as lifetime free battery swaps, extended vehicle warranties, etc. From August 1, Nio will charge new customers for battery swaps at an average cost of about RMB 80 to RMB 100 ($11.2 to $14) per swap. Theoretically, this change should have a positive impact on the company’s financial results.

Nio’s CEO, William Li, disclosed that the company had been internally discussing this change for quite some time. He revealed that they had been taking into account the opinions and suggestions of various users, using the Nio App. Despite the numerous factors involved, the discussions continued, right up to the morning when the news was finally announced. The decision-makers believed that it was the most appropriate time to implement the adjustment. Li recognized the impossibility of pleasing everyone and acknowledged that there may still be some aspects that were not fully considered. 

This drastic price change decision represents Nio’s response to mounting pressure. The pressure stems from multiple sources, and we will explore it from three aspects: 

The first aspect to consider is the product’s competitive edge. Back when new players first entered the EV market, there were fewer EV offerings, and the available models were not as diverse as they are today. However, as the market has matured and charging infrastructure has improved, an increasing number of models have been introduced. This competitive landscape now includes Li Auto and Xpeng, as well as traditional foreign manufacturers and established local Chinese automakers, all of whom have expanded their product lines. Additionally, numerous enterprises and companies from other industries, such as smartphone manufacturer Xiaomi and technology giant Baidu, are now venturing into the EV sector. 

When it comes to competition within its product line, Nio is set to face numerous rivals, particularly in the next one or two years. EVs have a shorter update cycle, and amidst the challenging economic climate, overall consumer demand is unlikely to grow significantly. In such a situation, securing customers is crucial for market dominance. For Nio, adjusting its models’ prices will significantly boost its products’ market competitiveness. From a practical standpoint, the quality of Nio’s vehicles is not in question; they are widely regarded as top-notch products. Strategically implementing price adjustments at this crucial juncture is undoubtedly a means to capture a larger market share for the company.

Additionally, regarding charging infrastructure and policy changes, Xin Guobin, the Vice Minister of China’s Industry and Information Technology, stated that it is essential to guide social capital toward rational investments while avoiding blind expansion and disorderly development. He emphasized promoting the standardization of battery-swapping technology, including the size, interface, and communication protocols involved. Such policy shifts could potentially affect Nio’s future charging and swapping operations, although the extent of the impact remains uncertain. However, leveraging price adjustments might serve as a strategic move to alleviate some pressure on the company’s battery-swap operations, preemptively addressing any potential criticism that may arise.

On June 1 of this year, Nio reduced its battery swapping benefits: originally, customers without a home charging station could enjoy six free battery swaps per month, but this was decreased to four. After only 12 days, the benefits were reduced again, indicating that the once-celebrated battery-swapping feature had become a source of operational pressure. Some users wondered if Nio’s fees for battery swaps were too high compared to supercharging, and whether the prices would be adjusted. In response, Nio’s Vice President, Shen Fei, addressed the issue via Weibo, acknowledging the concerns as valid and promising prompt changes. Soon after, Nio changed accordingly and said the fees for battery swaps will be determined by duration, while the cost of charging will be based on electricity usage. With this change in strategy, Nio’s swap stations should be able to operate more efficiently in the future, potentially leading to a positive impact on the company’s financial performance.

Besides, it is evident that the mounting pressure from sales has compelled Nio to implement this price adjustment. Before the price reduction, Nio had faced two consecutive months of weak sales, with 6,658 and 6,615 units sold in April and May, falling short of the 10,000-unit benchmark. On June 9, Nio announced its first quarter financial results, which displayed a considerable decline in several key metrics: revenue grew by only 7.7% year-over-year to RMB 10.676 billion ($1.5 billion), falling below the anticipated RMB 11.7 billion ($1.64 billion); net loss widened by 166% year-over-year to RMB 4.74 billion ($0.67 billion), marking 19 consecutive quarters of losses since the company’s IPO; the gross margin and automotive business’ gross profit margin decreased to 1.5% and 5.1%, respectively. 

Li Xiang, Li Auto’s CEO, expressed his perspective on the Chinese social media platform Weibo. He said, “For an auto company to be healthy and sustainable, attaining a revenue scale of RMB 100 billion and a product gross margin of 15% to 25% is essential, as demonstrated by sales leaders BYD and Tesla.” In that sense, Nio has to adjust its pricing strategy to increase sales and revenue scale. Only then can the cost per vehicle be reduced. In the intensely competitive EV market, Nio’s price reduction is a strategic move for survival. 

Nio announced aggressive price cuts on Monday. The unusual decision from the premium EV maker, which has previously refused to join the ongoing China EV price war, has drawn mixed reactions from experts, with some speculating on a significant sales recovery for the electric vehicle maker while others remain concerned about worsening margin pressures.

The Chinese EV maker on Monday decided to cut prices by RMB 30,000 ($4,199) across all its vehicle lineups, reversing its previous decision to keep pricing stable as part of “the DNA” of the premium brand. For instance, the base version of Nio’s ET5 sedan, once expected to be a high-volume model, now costs RMB 298,000 ($41,630) after the price cut, and RMB 228,000 if a customer chooses the company’s battery leasing plan, with a monthly battery lease fee of RMB 980.

Nio’s share price surged 8.7% on the news on Monday. But at the same time, the company’s gross margin hit a historic low of 1.5% in the last quarter, and the price reduction could further impact this figure. The company’s changing attitude toward price cuts comes at a time when it has faced a persistent delivery decline this year.  

Whether Nio’s lower-priced ES6 and ET5 cars prove to be popular could be the key to its very survival, as pressures mount on the smaller Chinese players in an increasingly competitive EV market. Nio’s deliveries in the first quarter fell by 22.5% to 31,041 vehicles from the fourth quarter last year; it also gave a weaker outlook for the second quarter: up to 25,000 units.

“Nio is playing a double sword game, and the outcome remains unknown,” said Yale Zhang, managing director of Shanghai-based consultancy AutoForesight.

Sales and efficiency boost

Nio’s recent price cuts could drive sales, especially in lower-tier Chinese cities where battery swap facilities remain inaccessible, according to Sun Shaojun, founder of consumer behavior research agency CarFans (our translation).

Sun expects the move, coinciding with the end of free battery swaps, to help Nio control costs and improve recharging network efficiency. Nio’s public chargers often lie idle as owners use the free swap service instead, Sun told TechNode on Monday.

Lei Xing, an auto industry analyst and former chief editor at China Auto Review, saw Nio’s decision as “a long overdue change” to better adapt to the environment, and the first step in a series of potential measures to save costs and improve efficiency. Xing added that Nio should also eliminate under-performing models from its overly large lineup.

Long-term uncertainty

In a market where most major EV makers are offering big price cuts in recent months, some experts are skeptical about the sustainability of Nio’s sale-boosting move.

Nio is anxious to reverse its declining sales trend and prevent further loss of market share from competitors such as Li Auto and some bigger players, AutoForesight’s Zhang said when contacted by TechNode. The price cuts will further damage Nio’s gross margins, as well as its ability to maintain its premium brand reputation long-term, added Zhang.

Xing thinks the price cut will help Nio deliver 180,000 vehicles this year, its current best-case scenario. Even this figure will fall short of an earlier prediction by the company: double last year’s unit sales of 122,486 cars.

“We believe there is an opportunity for us to still achieve deliveries of 20,000 units per month,” Nio chief executive William Li told analysts during an earnings call on June 9. “We need to make sure we can find a better way to meet user needs and expand their demands.”

Volkswagen has made headlines in China following an incident on Monday in which a VW electric vehicle crashed into a motorway toll station and caught fire in Hangzhou, resulting in the death of four people, according to a report in financial media outlet Caixin.

Why it matters: Video clips that show firefighters working near the burning car have drawn social media attention, with comments voicing concerns about EV safety that may cast a shadow over VW vehicles sold in China.

Details: A passenger vehicle hit a barrier at a Hangzhou toll station in the eastern Chinese city early on Monday, catching fire immediately, and killing the four men in the vehicle, the city’s traffic police confirmed in a post on Chinese microblogging platform Weibo.

• The local authorities did not provide further details about the incident or specify a cause of the blast. Several video clips have gone viral on the Chinese internet showing a VW-branded battery-powered EV at the center of the fatal crash.
• SAIC-Volkswagen, a joint venture between the German automaker and SAIC Motor, is cooperating with investigations, Caixin reported, citing someone close to the company. The firm did not respond to TechNode’s request for comment.

Context: China requires EV battery systems to be designed so as not to catch fire or explode for at least 30 minutes after a crash at 50 kilometers per hour (31mph) or under, an expert from the China Automotive Engineering Research Institute Co., Ltd told Caixin.

• Sales of VW’s battery-powered EVs in China dropped 25.4% year-on-year to around 21,500 units for the first three months of this year, as the German auto major faced growing pressure from Tesla and a slew of Chinese firms led by BYD.
• VW currently sells three models under its purely electric ID. series in China, namely the ID.4 crossover, the ID.3 hatchback, and the seven-seater ID.6, covering the mainstream luxury car segment with a price range of between RMB 150,000 and RMB 350,000 ($21,045-$49106).

Chinese EV makers saw a flat month overall in May, with 0% growth in the market from April. However, some EV makers are squeezing out growth more than others. BYD, Aion, and Li Auto managed to report monthly growth of around 10% to 14%, while Nio saw delivery figures sink to its lowest level in 12 months. Xpeng Motors and Zeekr look on track for a modest recovery. 

Why it matters: Total sales in China of new energy vehicles, including all-electrics and plug-in hybrids, were relatively flat in May despite an outstanding performance by major Chinese electric vehicle makers, highlighting the growing advantage of domestic players over foreign counterparts amid rising competition.

• Automakers mostly saw a slowdown in new order intakes and foot traffic at showrooms during the second half of May due to a new surge in Covid cases, weak consumer sentiment, and the phase-out of regional subsidies by some local Chinese governments, analysts at investment bank Jefferies wrote in a note on Thursday, citing Sun Shaojun, founder of auto consumer service platform Carfans.
• Sun expects a strong recovery during June and July, as multiple domestic players begin mass delivery of new models. Sales of passenger EVs were around 483,000 units during May 1-28, up 82% thanks to a low base from a year ago due to Covid lockdowns. However, May deliveries showed no growth from the previous month, according to figures from the China Passenger Car Association.

Strong growth: BYD reported a record high in monthly vehicle sales at 240,220 units, up 108.9% from a year ago and 14.2% from April. This was buoyed by price cuts from dealerships and the launches of multiple cheaper models, including the new Han and Tang models with smaller batteries and the entry-level Seagull. Its premium brand Denza also posted impressive results of 11,005 vehicles delivered.

• GAC’s EV unit Aion and EV startup Li Auto also hit new milestones with deliveries of 45,003 and 28,277 vehicles last month, representing a monthly growth of 9.73% and 10.1%, respectively. The two companies have set goals of selling up to 600,000 and 300,000 vehicles this year, which would more than double their totals from last year.
• Hozon and Leapmotor both reported strong May sales of 13,029 and 12,058 units, respectively, after announcing “price protection” measures in March to counter a months-long price war ignited by Tesla. Historically a budget carmaker, Hozon said it delivered 1,716 Neta GT sports cars, launched last month and priced from RMB 178,800 ($25,276).

Under pressure: Nio on Thursday revealed that its monthly delivery figures have fallen for four months in a row to 6,155 units in May, as fierce competition and an aging product lineup continue to weigh on the Shanghai-based EV maker. On May 24, the company began handing over its all-new ES6 crossovers to customers and said mass delivery of its redesigned ET5 sedans would begin later this month.

• Xpeng’s May delivery was 6% higher from a month earlier, as the EV maker began delivering the P7i, a revamped version of its popular P7 sedans in March. The modest growth was due to supply chain constraints, with chief executive He Xiaopeng recently telling investors the company would “significantly” ramp up production of the key components for P7i with partners in June.
• Geely’s premium brand Zeekr posted deliveries of 8,678 units last month, a 7% increase from April. Its new compact SUV, the X, is scheduled for delivery this month. Rival Deepal began shipping the S7, its second model, on Tuesday, with monthly deliveries of Changan’s EV marque reaching 7,021 units in May, a 9.5% decline from April.
• Aito’s sales rose 22.8% month-on-month to 5,629 units in May. The Huawei-backed EV maker began selling a top-end version of its M5 plug-in hybrid crossover equipped with Huawei components and software for automated driving in April, with delivery scheduled to begin on June 18. Meanwhile, sales of Dongfeng’s EV unit Voyah fell 10.1% to 3,003 units from a month ago.

Chinese electric vehicle battery maker CALB is reportedly withdrawing job offers to fresh college graduates who signed contracts late last year to join the company full-time this summer, Caixin reported. The company attributed the move to “changing market conditions” as it attempts to address customer demand.

Why it matters: The decision by Hong Kong-listed CALB, China’s third-biggest battery maker by volume, reflects growing pressure in the world’s biggest auto market as fierce competition and concerns of a slowdown have seeped into the EV supply chain.

Details: At least five “class of 2023” graduates who signed employment contracts with CALB were told the battery maker had rescinded its offers, according to Caixin. Having signed up in October 2022, the students were due to start work in July, but have now instead received a payment of RMB 3,000 ($424) in compensation. 

• The company said the move was necessary to ensure it could adapt to new circumstances in light of “chances and challenges going forward” in the EV industry.
• All of the company’s seven manufacturing facilities in China have taken back some of their job offers to fresh graduates, according to Caixin. 
• The report did not say how many of the firm’s graduate hires were affected but that hundreds of people had started chats on messaging platform QQ to share information.
• CALB did not immediately respond to TechNode’s request for comment.

Context: CALB’s shares slipped 6.8% to HKD 17.1 on Monday following a 4.28% fall on May 26, taking its market capitalization to HKD 30.3 billion ( $3.9 billion), down more than 50% from last October, when the company went public in a HKD 10.1 billion deal in Hong Kong.

• CALB mainly focuses on the Chinese market, with overseas revenue only accounting for 1.5% of its total last year. 
• CALB generated RMB 20.4 billion in revenue in 2022, triple its revenue from the previous year. A major supplier to Chinese carmakers GAC and Xpeng Motors, CALB is the third-largest battery maker in China. 
• Manufacturers in China collectively sold the equivalent of 25.1 gigawatt hours (GWh) of batteries in April, representing a 9.5% decline month-on-month, according to figures released by China Automotive Battery Innovation Alliance (CIBIA).

Nio on Wednesday launched a new version of the ES6, the brand‘s top-selling SUV. The EV maker has priced the new vehicle from RMB 368,000 ($52,027) and said it offers a driving range of 930 kilometers (578 miles) with its new 150 kWh solid-state battery pack. 

Why it matters: First launched in 2018, the ES6 has long been Nio’s top seller and performed strongly in China’s electric SUV category. The new version of the ES6 has the potential to become a high-volume car for the luxury automaker, which has faced slow growth as more established automakers enter the EV sector.

• Nio first unveiled details of its 150 kWh battery packs in January 2021, when the company claimed the battery would use a solid electrolyte instead of the liquid electrolyte found in existing offerings, providing high energy density and improved safety.
• The EV maker initially planned to deliver its ET7 sedans with the battery pack in the fourth quarter of 2022. However, in September 2022, CEO William Li told investors during an earnings call that production would be delayed “for several months.”

Details: The new ES6 with a 75 kWh battery pack is on sale for RMB 368,000 ($52,027) and offers a 490 kilometer driving range. The 100 kWh battery pack version is priced at RMB 426,000, offering a 625 kilometer driving range. Delivery began immediately after the launch on Wednesday night.

• The price of the ES6 can be reduced to RMB 298,000 if buyers choose Nio’s “Battery-as-a-Service” program, but they will have to budget in a monthly RMB 980 battery leasing fee. 
• The company did not reveal the pricing for the 150 kWh version of the new ES6, but CEO Li promised that delivery would begin in July during an online press conference on Wednesday, without providing any further details.
• The compact SUV can accelerate from 0 to 100 km/h (62 mph) in 4.5 seconds and has a dedicated computer to control chassis components, which the company said would improve the car’s balance and control.

Context: The five-seater ES6 has been Nio’s most popular vehicle model since it was first introduced in December 2018 and was the top-selling electric SUV in 2020, according to figures from the China Passenger Car Association. Nio has delivered more than 120,000 units of the original ES6 as of writing.

• The company currently has seven models on sale and covers a price range between RMB 300,000 and RMB 650,000. Li said it had set a target to double the company’s delivery volume from the 122,486 units it achieved last year.
• However, it delivered just 31,041 vehicles for the first three months of this year amid fierce competition, a 20.5% increase from a year earlier but a 22.5% decline from the previous quarter. By comparison, peer Li Auto delivered 52,584 units over the same period.

Chinese battery maker Gotion High-Tech on Friday unveiled an “affordable,” iron-based electric vehicle battery called Astroinno, saying it offers a more than 1,000 kilometer (620 mile) range on a single charge without using expensive materials such as cobalt and nickel.  

Why it matters: The battery, which uses a manganese-based cathode, is a potential offering to a group of automakers for their mainstream models. The new battery could mean a higher energy density than conventional lithium-iron-phosphate (LFP) batteries and come at a lower cost than ones which rely mostly on nickel and cobalt.

Details: The Astroinno battery has a cell-level energy density of 240 watt-hours per kilogram (Wh/kg) and reaches 190 Wh/kg at a system level. By comparison, larger rival CATL’s latest Qilin battery reaches around 255 Wh/kg systematically, while giant maker BYD is working to increase the energy density of its blade battery to 180 Wh/kg from 150 Wh/kg before 2025.

• The new battery provides a driving range of over 1,000 km to EVs powered by a 140 kilowatt-hour (kWh) battery pack, Cheng Qian, Gotion’s executive president of the international business unit, said at a press event in the eastern city of Hefei. This points to a performance similar to that of CATL’s Qilin battery, Bloomberg has reported.
• Cheng added the batteries could be charged from a low-level to 80% in 18 minutes and maintain an 88% yield rate when the temperature drops to minus 20 degrees Celsius, which would ensure EVs maintain their ranges in cold weather. 
• The company plans to start manufacturing the battery as early as 2024, but did not reveal any client names.

Context: Gotion said on May 10 that it had signed a new contract to be Volkswagen’s primary supplier of cobalt-free, unified LFP battery cells outside China, catering to all of its EV series. It has yet to reveal how many batteries it plans to make for Volkswagen’s vehicles under the contract.

• The company signed a pilot deal a year ago to mass produce both energy-dense nickel-containing battery cells and economical LFP ones for Volkswagen in the Chinese market.
• The Chinese battery supplier told investors it will be ready to begin delivering its products to VW during the first half of 2024, which would be applicable to the vehicles built upon the Scalable Systems Platform (SSP), VW’s next-generation platform for smart electric cars.
• Volkswagen has been Gotion’s largest shareholder following a $1.2 billion investment deal announced in 2020. China’s fourth biggest battery maker, Gotion shipped 14.1 gigawatt-hours (GWh) of batteries last year, following CATL, BYD, and CALB, according to SNE Research.

Correction: an earlier version of this article included Volkswagen as a potential automaker that might use the Astroinno battery. Volkswagen has since reached out and said the current cooperation between Volkswagen and Gotion is focused only on unified cell, and no other type of battery is involved.

The Chinese government has approved an action plan to push for the buildup of charging infrastructure across the country, a move Beijing says will step up the adoption of electric vehicles especially in the country’s vast rural regions, state broadcaster CCTV has reported.

Why it matters: The plan could pave the way for a sales boost of green energy cars in Chinese lower-tier cities and rural areas where EV penetration has so far remained low, according to Cui Dongshu, secretary general of the China Passenger Car Association (CPCA).

• China’s countryside is expected to provide a new source of growth for what is already the world’s biggest EV market, Cui wrote in a May 7 article (in Chinese). Less than 20% of new car sales were EVs in small-sized Chinese cities and towns in March, compared with 34% in first-tier cities, official figures showed.

Details: The plan will adopt a “forward-thinking and moderately progressive” (our translation) strategy to scale up the number of charging stations for EVs across the country, state broadcaster CCTV reported on May 5, citing a meeting of China’s top executive body, the State Council.

• The cabinet said it would also release measures that would facilitate businesses’ expansion of their EV sales and service networks in less developed regions, as well as boost the training of technical workers for EV maintenance from vocational schools.
• The Council said these efforts would allow it to step up its focus on removing the major bottleneck for EV popularity in rural areas. Policymakers expect a nationwide charging network to sustain at least 20 million EVs traveling on Chinese roads by 2025.

Context: China’s EV market has seen slower growth this year, after being partly disrupted by a major price war amid fierce competition and Beijing’s scrapping subsidies for EV purchases in December.

• Sales of new energy passenger vehicles, mainly all-electric cars and plug-in hybrids, increased 22.4% year-on-year to 1.3 million units during the first three months of 2023, significantly slower than the 93.4% growth last year, CPCA data shows.
• China operated an EV infrastructure network of more than 1.9 million public chargers as of March, of which nearly 60% were less powerful AC chargers with the rest being DC ones, according to figures from the Chinese Electric Vehicle Charging Infrastructure Promotion Agency.
• Multiple automakers have pledged to expand their EV charging networks. Nio and Xpeng Motors have set goals of making 2,300 swap stations and 500 fast charging stations available nationwide this year, respectively, while Li Auto opened its first batch of charging facilities last month.

Traditional Chinese automakers GAC and Geely, along with market leader BYD, have reported impressive electric vehicle delivery figures in April, taking market share away from young competitors such as Nio and Xpeng. 

Why it matters: April deliveries show the growing importance of traditional auto manufacturers in the Chinese EV market, putting additional pressure on EV upstarts, especially Nio and Xpeng.

Details: BYD has maintained its dominant position as sales nearly doubled to 210,295 vehicles in April from a year earlier. In particular, it sold 10,526 units of the Denza D9, a multi-purpose vehicle under its premium brand Denza, surpassing the threshold of 10,000 units for a second month.

• GAC’s EV unit Aion has also enjoyed strong growth momentum with sales of 41,012 units, representing a year-on-year increase of 302%. Li Auto also saw impressive growth, becoming the top-performing brand among EV startups with reported deliveries of more than 20,000 vehicles for a second consecutive month in April.
• More traditional Chinese manufacturers, namely Geely and Dongfeng, showed small but gradual rises. Geely reported deliveries of 8,101 of its Zeekr-branded vehicles, up 22% from the previous month. Dongfeng’s Voyah family cars reported 3,339 deliveries, a 10% growth from the previous month.  
• Meanwhile, deliveries of Changan’s EV arm Deepal declined by 9.5% to 7,756 units from a month ago. Yet, that number surpassed those of Nio and Xpeng for the first time following the launch of the brand by Ford’s manufacturing partner last April.
• Nio and Xpeng now face serious pressure. Xpeng saw relatively flat deliveries of 7,079 units for the month, although the automaker has managed to stall the delivery declines that began late last year, thanks to the launch of its revamped P7 sedan in late March, which began to offset the slump in sales of its G9 crossovers.
• Nio’s April deliveries plunged by 36% month-on-month to 6,685 units. Speaking on the sidelines at the Auto Shanghai show last month, president Qin Lihong said the company is in a period of model transition, clearing out most of its older models and still racing to introduce redesigned and new models.
• Seres did not reveal the numbers for its Aito brand. However, a total of 4,585 units were handed over to customers last month, according to data obtained by Chinese financial media outlet Caijing. The Huawei-backed car brand delivered 16,244 units from January to April.  
• Hozon and Leapmotor have settled into a period of steady growth, with deliveries of 11,080 and 8,726 vehicles, respectively. Both companies are increasingly focusing on higher-price segments rather than the budget offerings they are known for. Leapmotor said its pricier C series accounted for 83% of April’s sales.

Context: Established Chinese automakers commanded 67% of the country’s passenger EV market in March, a 6% increase from a year ago, according to figures published by the China Passenger Car Association. For “new forces,” which refers to younger EV startups, market share declined by 6.7% annually to 10.4%. In addition, Tesla took a 14.1% market share in China.

• The CPCA has yet to reveal detailed April figures but estimated on April 25 that passenger EV sales would decline by 8.4% month-on-month to roughly 500,000 units, as the market faced disruption from the recent price war and continued to slowly recover from the Covid-19 pandemic.

Speed is key if Continental and its auto clients are to have any hope of defending their market share in China, given the competition they face. Auto suppliers might be used to providing very specific solutions for single customers in Europe, “but in China this is not a good idea,” said Frank Petznick, Executive Vice President of the Autonomous Mobility Business Area at Continental AG.

While foreign auto executives express nervousness about the rise of their Chinese rivals, Continental’s global mobility head says he is not surprised. He says he has been “pretty aware of” of the pace of China’s progress in electric vehicle technology for a long time.

Offering products ranging from tires to dashboard displays, Continental is now growing its business in high-performance computers for automated driving, with GAC’s Hyper GT luxury coupe one of its early adopters. Speaking on April 19 on the sidelines of the Auto Shanghai show, Petznick told TechNode that companies must be lean, localized, and standardized in developing technology for the world’s biggest and most vibrant auto market.

Having lived in China for a decade before the Covid-19 outbreak, he also gave a broader perspective on the Chinese autonomous car industry and competition between global Tier-1 suppliers and local tech companies. The German auto parts giant is pushing to develop advanced electric and connected solutions not only for the China operations of multinational car majors but also for local manufacturers with global ambition.

READ MORE: Baidu and Huawei take on global giants with new in-car software offerings at Auto Shanghai 2023

Below are Petznick’s comments on the rapidly changing Chinese auto industry. The text has been condensed and edited for clarity.

China speed

The Chinese market is working completely differently from Europe, and much faster. In order to be prepared for the market, we need local companies that can put pressure on us to speed up and become more dynamic in the market. That’s why we decided to form a joint venture with Horizon Robotics two years ago. We wanted to make a Chinese joint venture that would be closer to the local market.

Global automakers underestimated China’s speed [with regard to EV transition] over the last three years, but now they are getting super nervous because they have seen what’s going on. EV companies in China have a higher demand for autonomous driving. They integrate the entire technology into their cars and can sell to local young people who just want to buy fancy cars.

A lot of the cost of ADAS [Advanced Driver Assistance System] comes from developing specific software, and what Continental can do very well is integration. We figure out what is a common part, roll out standard components in a fast and cost-competitive way, and then add specific functions to make a difference. I think this is the key [to success] in China, but many Western companies have not understood that yet.

Think local

We are working closely with our Chinese customers and developing systems in China and for China. Global automakers in China also want to use local solutions because they are afraid of being too slow and too late. The other thing is that many Chinese brands are going global very fast. It means we could also help some of our Chinese customers use a more global approach.

Every Chinese brand now has a global ambition, though new OEMs [original equipment manufacturers] are much faster at going global than traditional ones. Since the border opened [late last year], we have seen a growing number of Chinese OEMs coming to our headquarters in Frankfurt and Hanover to talk about having a global setup. In the meantime, we have the same discussions when we come here.

We have different solutions for different regions, but the software and functions are the same. We would like to help the global OEMs develop in China and help local OEMs develop in the global world. This is what we are trying to do: bridge the two.

Autonomous driving

There are some very good startup players in the US, but I believe robotaxis will become real in China before the rest of the world. There are still many difficulties in getting approval for vehicles with close to Level 3 driving capabilities. Some cities have allowed this, others have not. It’s very scattered. 

I see significantly faster development in terms of the infrastructure and the regulations needed in China. That’s why I think China could be the world’s first robotaxi-friendly country. The rest of the world could focus more on commercial trucks, which are more of a highway thing and not as complicated as robotaxis in the cities.

We are developing software basically for all levels of autonomous driving by using a lot of the expertise from our partners. The competition is very tough. You always see companies jumping forward and others catching up, but the good news is that if you can survive in this market, you can survive anywhere in the world.

Competing with tech giants

Tech companies such as Huawei and Baidu are going to be Tier-1 suppliers, while we are shifting to be more on the tech side. We need to be more agile and have a more local mindset in order to be fast enough.

We have launched a couple of products, such as a full-fledged smart camera based on processors from a Chinese partner. We are also making high-performance computers where ADAS will also be a part of it. We will be going into series production with the partners we have now. You will see these cars on the road very soon.

I don’t think we have to turn ourselves into a new Baidu. This would be going too far over to the other side. Chinese tech firms are trying to be more Tier-1 and we are trying to be more like a tech company. We are basically learning from each other. We have discussed globally that we have to become a tech player, and in the China context, we need to do that tomorrow.

BYD on Thursday reported strong revenue growth in its first quarter, with net profit up 410% from last year despite concerns about slowing demand following a Covid-hit 2022. The EV giant’s profit growth is slowing, however, and was down 43.5% from the previous quarter due to an ongoing national price war and a rush of purchases before subsidies were ended late last year. 

Why it matters: BYD’s figures reflected a broader trend of growing competition and shrinking profits for automakers in China, as car brands were hit by the phasing-out of electric vehicle subsidies and a price war started by Tesla’s price cuts. BYD continues to lead the sector however, with a 35% share of the country’s electric vehicle market. 

Details: China’s biggest electric car maker said on Thursday it made RMB 4.1 billion ($597 million) from January through March, representing an impressive surge of 410.9% year-on-year, but a 43.5% drop from the previous quarter.

• The firm’s profit margin also fell slightly from 19% in the fourth quarter of 2022 to 17.8%, as it was hurt by Beijing’s subsidies cuts and its reduced sales volume, Jefferies analysts wrote in a Friday report.
• Sales nearly doubled from a year ago to 552,100 vehicles during the period, although that number represented a decline of 19% from the previous quarter. January and February are traditionally low seasons due to the Lunar New Year holidays.
• The Chinese auto giant is significantly ramping up its spending on research and development, with R&D expenses jumping 164.2% annually to RMB 6.2 billion during the first quarter, close to rival automaker Geely’s spend of RMB 6.8 billion for the entirety of last year.
•  Analysts expected the automaker’s profitability to recover as lithium prices began falling after a strong two-year run, and its dominance in the mainstream car segment could continue on better cost control.

Context: China’s auto industry has faced downward pressure as general passenger car sales declined 4.5% from last year to 4.9 million units in the first quarter of this year. 

• Industrial profit from the automobile manufacturing sector dropped 24.2% over the same period from a year ago, according to data from the National Bureau of Statistics.
• Sales of Volksagen’s partner SAIC fell 27% annually to around 891,200 units in the first quarter. At the same time, Chinese automaker Great Wall Motor reported RMB 217 million in net loss.
• BYD is among the Chinese automakers forced to match Tesla’s repeated aggressive price cuts to maintain their sales volumes. On March 16, BYD launched a new version of its popular Han sedan priced from RMB 209,800. Previously, the cheapest version cost RMB 269,800.
• The company on Wednesday began selling the Seagull budget car with a price range of between RMB 73,800 and RMB 89,800. At the same time, BYD is also venturing into the ultra-luxurious sector, recently announcing pre-sales of the U8, an off-roader from its Yangwang brand, for a little over one million yuan. 

As China’s car industry quickly embraces new energy vehicles, the country’s tech giants and startups are competing head-on with established global auto parts manufacturers to help automakers develop unique in-car software experiences and assistant driving features.  

Tech majors like Huawei and Baidu are positioning themselves as automotive suppliers by providing comprehensive software systems along with a full range of electronic components for the smart, connected, and electric vehicles of the future. Meanwhile, global tier-1 suppliers Bosch and Continental are localizing more of their tech capabilities to adapt to the fast-changing Chinese market.

Here’s a roundup of some of the upcoming automotive tech that debuted at this year’s auto show in Shanghai.

Baidu: Seeking long-term ties with carmakers

Two years after setting up a dedicated unit to develop self-driving tech for consumer cars, Baidu made a strong commitment to automakers by declaring itself their “best partner” in smart, electric vehicles in China in a statement made on April 16 ahead of this year’s show.

Low-cost deployment is one of its major selling points. The search engine giant launched the Apollo City Driving Max on April 16, claiming it is by far its most powerful advanced driver-assistance system (ADAS). The AI giant also claims that the new system is the only pure vision-based approach for automated driving on Chinese urban roads, meaning it operates without the use of pricier lidar sensors.

Baidu also introduced its new high-definition mapping technology at a relatively lower cost than rivals, adopting a crowdsourced approach to compile map data to help EVs get around by themselves. “This is unique to Baidu,” said corporate vice president Rob Chu. The company expects such efforts to pay off in the long run, allowing it to form consistent and reliable partnerships with auto manufacturers.

Huawei: Competing against Tesla’s software offerings 

Huawei has had a bumpy ride after making a splash at Auto Shanghai 2021 with the public debut of its assisted driving technology, as two of its major manufacturing partners – BAIC’s Arcfox and lesser-known Seres – have both found themselves facing lackluster sales.

On April 16, the technology giant unveiled the second generation of its Advanced Driving System, which was designed to let vehicles navigate not only on highways but also around complex city streets like Tesla’s full self-driving beta software. Huawei’s consumer business head Richard Yu made the announcement in Shanghai, claiming that the Chinese telecom firm has surpassed Tesla in handling on- and off-ramps among other traffic scenarios, according to its testing results.

The system will be released to users in at least 45 Chinese cities by the end of this year, where high-definition mapping services are currently unavailable to them.The system was built upon multiple sensors and cameras to reduce the reliance on mapping. A high-end version of the Aito M5 electric crossover is the first model to adopt the technology, while the Avatr 11, co-developed by Huawei and its partners Changan and CATL, and the Arcfox Alpha S will also adopt the system. 

Bosch: Chinese OEMs a major growth driver

German auto supplier Bosch debuted its fourth-generation computing platform for in-car entertainment at the Shanghai auto show, highlighting the ongoing trend of cars relying on software to differentiate themselves in a crowded marketplace.

Entirely developed by its Chinese team, the information domain computer has undergone four upgrades over the past two years, facilitating automakers’ fast and customized development of in-car applications, according to Dr. Markus Heyn, chairman of Bosch’s mobility solutions business sector. This also enables vehicle owners a seamless and smart cockpit experience both in the vehicle and on the cloud.

Heyn said he was personally impressed by the wide range of new brands and electric vehicles that are on display at this year’s Auto Shanghai. “I am extremely proud that Bosch is a part of this rapidly growing and evolving industry and serves as a global partner for our customers in China,” added Heyn. Chinese original equipment manufacturers (OEM) accounted for nearly 60% of the mobility solutions business sector of the engineering group’s total sales in China last year.

Continental: Keeping up with China’s fast transition to EVs

Continental on Wednesday showcased for the first time a high-performance computer that is capable of assisted driving and body control, giving carmakers a more agile process of software development. More than 30 new vehicle models will be using Continental’s supercomputing solution by 2024, the company said, with GAC’s EV unit Aion becoming one of its early adopters.

The German auto parts maker sees standardization as a strength in keeping up with China’s fast transition towards smart EVs. The company set up a joint venture with local startup Horizon Robotics back in late 2021.

“A lot of the cost in ADAS is coming from developing specific software. We figure out what is a common part and roll out standard components in a fast and cost-competitive way, and then we add some specific functions to make a difference,” said Frank Petznick, head of the autonomous mobility business area at Continental. “I think this is the key [to success] in China and many Western companies have not understood that yet.”

Horizon Robotics: Landing BYD as a major client

This year’s Auto Shanghai also reflected the rise of domestic suppliers. Horizon Robotics is one of the Chinese suppliers helping auto companies to secure their supply chain and reduce costs. Horizon said on Tuesday that it will team up with Chinese EV leader BYD to develop software and hardware systems for automated driving to use in the latter’s cars.

Multiple BYD cars will be manufactured later this year based on Horizon’s Journey 5, which is made specifically for computing in connected and intelligent vehicles. The move marks “a significant achievement” in the two companies’ strategic collaboration since 2021, according to Dr. Yu Kai, founder and CEO of Horizon Robotics.

Backed by a list of auto majors including Volkswagen, Horizon already supplies tech to automakers including Geely and Li Auto. The company also announced a partnership with EV maker Hozon Auto on Tuesday to build assisted driving platforms set to hit the market as early as 2024.

The biennial Auto Shanghai Show is traditionally a time for global automakers to flex their muscles and woo Chinese consumers. Yet this year’s edition, China’s first major auto exposition since the country reopened after Covid, has been very much dominated by local manufacturers.

The growing presence of Chinese brands reflected the mounting pressure on traditional global carmakers and also new makers such as Tesla, a notable absence at this year’s event. The US electric car pioneer launched one of its biggest-ever price cut campaigns this January, sparking a price war in China’s competitive EV market.

Below, TechNode highlights new releases and updates from major Chinese EV makers at the Auto Shanghai Show 2023, including BYD, Geely, Nio, Xpeng, and Li Auto, which all displayed an impressive portfolio of electric vehicle models.

BYD: Song L concept, Chaser 07, and Seagull

As China’s best-selling new energy vehicle brand, BYD came to the exposition with a wide range of updates covering all major price points, from budget-friendly compact cars to luxury off-road sports vehicles, as well as everyday SUVs. 

BYD’s main brand focused on three car models. The first one is the Song L concept car, a pure electric sports SUV equipped with an electric rear spoiler and BYD’s e-platform, and DiSus electric body control technology. BYD said it will be launched within the year but did not specify the exact model that will be made available or a launch time. The Song L may be a new supplement to BYD’s best-selling Song Plus SUV.

The brand also showcased the Chaser 07, a medium-sized plug-in sedan that is a new model in the Ocean family. It will be priced at RMB 200,000 to RMB 250,000 ($31,000-$39,000) and will be launched in the third quarter of this year. It is BYD’s effort to attract young car owners with an everyday hybrid. 

At the same time, BYD also announced the start of pre-sales of its entry-level mini car Seagull, which is priced at a budget-friendly RMB 78,800 to RMB 95,800 ($12,200-$14,800), and has two driving ranges of 305 km or 405 km. The car is equipped with four safety airbags, an ESP electronic vehicle stability system, and a fast charging capability of 30kW or 40kW.

BYD’s luxury car brand Yangwang unveiled new versions of its U8 and U9 models at the auto show on Tuesday. 

The U8, a new energy off-road vehicle with 1100 horsepower and the ability to accelerate from 0 to 100 km/h in 3.6 seconds, has officially started pre-sales and comes in two versions: the luxury edition and the off-road player edition. The official pre-sale price for the luxury edition is nearly RMB 1.1 million($170,000) and the model is expected to be delivered in September. The off-road player edition will be delivered later, with no specific timeframe announced yet. This high-end off-road vehicle will use BYD’s independently developed core technologies, E4 technology and DiSus (Yunnian) intelligent hydraulic body control system.

Meanwhile, Yangwang also unveiled a new look for its luxury sports car the U9, which now features a rear wing design that was not present in the version unveiled in January this year. The delivery time and specific price of the U9 have not yet been announced.

Geely: Zeekr X, Lynk & Co 08, and overseas plans

Zeekr X, the first SUV model launched by the Geely-affiliated brand Zeekr, made its public debut during this year‘s Auto Shanghai. The vehicle is aimed at attracting the country’s growing young and affluent population with a price tag of RMB 189,800 ($27,590). This is lower than what one of the firm’s executives projected early this year, considered a reaction to a months-long price war first launched by Tesla and now engaged in by dozens of automakers.

Zeekr also announced detailed plans to expand into Europe. Regional CEO Spiros Fotinos announced on Tuesday that the company will open proprietary showrooms and begin delivering the X along with its 001 sedans in the Netherlands and Sweden later this year. The brand is expected to enter most western European countries by 2026, Fotinos added.

Geely on Tuesday also focused on the Lynk & Co 08, the first model equipped with its in-house produced in-car software co-developed with Meizu after the carmaker completed its acquisition of the Chinese smartphone maker last July. The plug-in hybrid will have a maximum driving range of 1,400 km and a power output of up to 400 kW, with vehicle delivery scheduled during the second half of this year, according to Lin Jie, a senior vice president at Geely Auto.

Volvo’s parent expects its Flyme digital cockpit system not only to offer a connected and seamless experience to users across devices with its latest crossover but also to provide additional computing power to existing vehicle models from Meizu smartphones. The mainstream luxury brand, jointly unveiled to the public by Geely and Volvo in 2016, plans to innovate its current dealership model by opening direct sales stores in major Chinese cities, Lin told the Economic Observer earlier this month.

Nio: 2023 ES6 crossover and ET7 sedan

Nio unveiled a new version of its popular ES6 sports utility vehicles, which the company boasts can hit a speed of 100 km/h (62 mph) within five seconds. The models also feature a supercomputer that can perform over 1,016 trillion operations per seconds (TOPS). Current Nio cars have a maximum driving range of 900 kilometers equipped with a 150 kilowatt-hour (kWh) battery pack. The EV maker has not yet revealed the driving range of the updated vehicles. 

The five-seat crossover has been the company’s most popular vehicle model since it was first introduced in December 2018, with total deliveries of more than 120,000 units at the time of writing. Official release dates and pricing details have yet to be announced, though the EV maker has now begun taking orders for the latest version of its ET7 sedans priced from RMB 458,000, which was first launched in January 2021.

Xpeng: G6 crossover

The G6 is Xpeng’s first offering built upon its latest SEPA vehicle architecture and is expected to be a key test of the company’s efforts to return to a leading position in the country’s crowded EV race. With an estimated price range of between RMB 200,000 and RMB 300,000, the midsize SUV is set to be a mainstream, high-volume model compared with its more premium-oriented G9 sibling.

The electric coupe SUV will be capable of traveling up to 300 kilometers (186 miles) on a 10-minute charge, empowered by an 800-volt silicon carbide power module. Meanwhile, the EV maker boasted of its assistant driving tech, claiming drivers will only need to control the car once per 1,000 kilometers in complex traffic environments with the latest version, which it will roll out later this year. 

Li Auto: details of first all-electric model

Li Auto shared further details regarding its all-electric strategy at this year’s Auto Shanghai Show, co-announcing with CATL that its upcoming battery vehicle will be the first in the market to install the latter’s next-iteration Qilin battery that could provide a 4C charge rate. Charging at a 4C rate normally means that the battery could be charged from 0 to 100% in just 15 minutes, according to Quantumscape, a Volkswagen-backed battery startup and a spinout company from Stanford University.

Set to go on sale later this year, Li Auto’s first battery EV will also be built upon an 800-volt architecture for a range of up to 400 km after 10 minutes of fast charging. Chief engineer Ma Donghui added that the company is rushing to build 300 supercharging stations on Chinese highways by year-end and expand the number to 3,000 in three years, by which time it will have a lineup of at least five battery EVs. Li Auto currently has three plug-in hybrid crossovers on sale.

On Monday, BYD unveiled DiSus (“Yunnian” in Chinese), an electric-powered body control suspension system that it claims is the first comprehensive Chinese solution for vertical vehicle dynamics. Overseas automakers have already mastered a similar technology for their internal combustion vehicles.

The Chinese electric vehicle pioneer plans to scale the technology to various models across its Dynasty and Ocean lineups, as well as premium sub-brands including Yangwang and Denza, as it expands its presence in the luxury car segment.

Why it matters: BYD Chairman Wang Chuanfu said that the company’s latest-iteration suspension system is set to “fill the gaps” China has in handling core functional capabilities such as driving dynamics and chassis control (our translation).

• The system will give the car “a very smooth ride” using intelligent algorithms to adjust to most road conditions and driving situations, Wang told reporters at BYD’s headquarters in Shenzhen.

Fully-active body control: BYD said customers could expect an upgraded experience using the new DiSus system, as it keeps the body level and cabin stable on bumpy roads.

• The top-end version of the DiSus adjustable suspension system can be raised or lowered by as much as 200 millimeters and includes a hydraulic spring assembly for each wheel in reaction to the road surface.
• Another variant uses adaptive dampers and air springs to reduce vibrations and keep the ride smooth, and the vehicle’s ride height can be adjusted by 150 mm to help passengers in and out of the car.
• The system also promises to provide high vertical dynamics capabilities, as body roll during cornering and load changes can be cut down, which the company hopes to use to gain a significant edge in the luxury Chinese consumer segment. 
• The Chinese name of the system “Yunnian” combines “Yun,” which refers to clouds, and “nian,” which refers to the highest level of carriage in ancient China, reserved only for emperors and concubines. 

AI techniques and algorithms: Having historically provided few details about autonomous driving and in-car software, BYD said the body control technology will use a sensor suite and central processor, making the car adaptable to certain automated driving applications.

• The equipped vehicle will be able to detect objects and potential road hazards at a distance of up to 150 meters, while algorithms for motion control will allow the suspension to deal with bumps before a wheel even reaches them.
• BYD will first use the technology in the upcoming U8 off-road vehicle under the Yangwang sub-brand with a price tag of more than RMB 1 million ($150,000), and the Denza N7 crossover set to go on sale later this year.
• A base version of the system will also be available to owners via over-the-air updates with their high-end versions of the Denza D9 van, the Han sedans, and the Tang crossovers. The company did not give a precise time frame for the update.

Context: Vehicle control technology of this kind is a mature feature in high-end foreign brands and has been almost completely dominated by global suppliers such as German’s Continental, analysts at Chinese brokerage Essence Securities wrote in a research note on Oct. 29 last year.

• Mercedes-Benz introduced its Magic Body Control system with a road sensing system for road surface detection to its S-Class vehicles in 2013.
• Ferrari in September 2022 launched a $400,000 crossover equipped with an exclusive, electric-powered active suspension system supplied by Canadian maker Multimatic, Reuters reported.
• Several Chinese EV makers, including Nio, Li Auto, and Geely’s premium brand Zeekr, have sourced active air suspension systems from global suppliers for luxury offerings priced between RMB 386,000 and RMB 554,000.

READ MORE: BYD’s super-luxury cars: four motors, 360° tank turns, and RMB 1 million-plus price tags

Tesla is considering a massive expansion of its global production capacity for its long-rumored entry-level compact car, with its Shanghai factory potentially being lined up to deliver 1 million units of the new model annually, Chinese media outlet 36Kr reported.

Why it matters: Unofficially dubbed the “Model 2” or “Model Q” by Tesla observers online, the new car is expected to be priced as low as RMB 150,000 ($21,800) and is aiming to take more shares of the Chinese electric vehicle market.

Details: Citing several industry insiders, 36Kr reported on Tuesday that Tesla is targeting an annual capacity of 4 million units worldwide for the new budget model, adding that the plan is still in its early stages.

• The company’s planned factory in Mexico will mainly be responsible for a yearly output of 2 million units in North America, while its assembly plants in Shanghai and Berlin will share the rest evenly.
• Mass production of the new model can’t happen until next year at the earliest, as Tesla has to ensure that the supply chain ramp-up is synced to the output expansion, the report said.
• Tesla did not respond to TechNode’s request for comment.

Context: Tesla on Wednesday revealed the latest part of its overall company plan, which included details for an unnamed compact vehicle model to come with a 53 kilowatt-hour (kWh) battery pack. The company said there would be a goal of selling 42 million units of the new model globally, without giving a timeframe.

• In September 2020, chief executive Elon Musk said the company aims to eventually make 20 million EVs per year by the end of this decade, the Wall Street Journal reported.
• Tesla shipped nearly 230,000 China-made EVs during the first three months of this year, according to figures from the China Passenger Car Association, with its Shanghai Gigafactory having the capacity of making 1.1 million EVs annually.
• The US automaker will be able to cut the cost of its next-generation vehicles by half from those of its existing offerings, chief engineer Lars Moravy told investors on March 1, Reuters reported.
• Tesla has been selling its popular Model 3 sedans at a starting price of RMB 229,900 and Model Y crossovers from RMB 261,900 in China after announcing an overnight price cut of up to 13.5% on Jan. 6.

Chinese electric vehicle makers posted a slight increase in monthly deliveries in March, boosted by industry-wide price cuts since early this year. However, the gains were minimal and uneven, bolstering the market’s view that competition will remain fierce, with dwindling margins amid weakened demand.

Why it matters: Retail sales of Chinese passenger EVs during March 1-26 rose slightly by 10% from last year and just 1% from a month earlier, according to figures from the China Passenger Car Association. Meanwhile, overall sales of Chinese passenger cars declined 1% year-on-year and 17% month-on-month. BYD and GAC’s Aion still lead in deliveries, while Li Auto continues to outperform EV startup rivals Nio and Xpeng. 

• China’s auto industry is in a period of transition. New energy vehicles are fast growing but many brands have yet to achieve profitability, while gas cars are still profitable despite declining sales, Ouyang Minggao, a member of the Chinese Academy of Sciences, said at an industry forum on April 2.

Details: BYD said on April 2 that sales almost doubled from March last year to 207,080 units, reflecting its growing dominance in the country’s EV market. Notably, the giant manufacturer saw strong gains for its premium marque Denza, sales of which increased 42% month-on-month to 10,398 units.

• GAC’s EV arm Aion reported sales of over 40,000 units last month, marking the first month in which deliveries exceeded the critical threshold. On March 7, the company began selling a more affordable version of its compact crossover Aion Y, lowering the starting price of the model by 17% to RMB 119,800 ($17,380).
• Li Auto has maintained strong growth momentum due to the popularity of its L series family sports utility vehicles, delivering 20,823 units in March. The automaker aims to deliver as many as 30,000 vehicles per month in the second quarter of the year, as delivery of its entry-level L8 and L7 crossovers begin in April, chief executive Li Xiang told investors on Feb. 27.
• Other US-listed EV makers posted a relatively weak performance. Having stuck to its pricing strategy despite demand concerns, Nio said March deliveries fell by 15% from a month earlier to just over 10,000 units. Xpeng’s March deliveries grew by 16.5% sequentially to 7,002 units, boosted by sales of a revamped version of its popular P7 sedans.
• Hozon reported flat March deliveries of 10,087 units, while rival Leapmotor said that number increased 93% to 6,172 units. Both companies are among a group of automakers that recently assured customers no price cuts were on the horizon.
• Changan’s EV marque Deepal said sales more than doubled to 8,568 vehicles last month after offering customers cash incentives of RMB 22,000 from March 10. That number of Geely’s premium EV brand Zeekr rose 22.1%, boosted by an incentive package worth RMB 80,000 launched on March 16.
• Huawei is under bigger competitive pressure, as manufacturing partner Seres reported lackluster sales of 3,679 vehicles in March. Its accumulative sales surpassed just over 11,000 units during the first quarter of this year. The Chinese tech giant on March 31 reassured carmakers once again by saying it would not manufacture cars on its own.

Context: Ouyang from the Chinese Academy of Sciences suggested Chinese carmakers develop both all-electrics and plug-in hybrid EVs in the next ten years, as the latter is normally equipped with smaller battery packs and therefore less affected by the volatility of raw material prices.

• Speaking at this year’s China EV 100 forum in Beijing, he estimated that plug-in hybrids could take nearly half of the Chinese EV market in 10 years from last year’s 22%.

Nio announced on Tuesday that it has begun deploying its latest generation battery swap facilities as part of an aggressive expansion plan to double its recharging network to more than 2,300 swap stations and 24,000 chargers across China this year.

The electric vehicle maker expects its expensive bet on power infrastructure to put it ahead of competitors amid a fierce price war, as most owners are turning to battery swapping as the main solution to refuel their EVs, senior Nio executives told TechNode.

“Many users can never have home chargers in China so they choose our vehicles for the battery swap technology,” senior vice president Shen Fei said on March 23 in Shanghai. “Rather than lowering vehicle prices, we prefer offering users an excellent recharging service and driving experience.”

Grappling with flat sales amid growing pressure from larger rivals, Nio is hoping the battery swapping stations can help achieve its annual delivery goal with greater service capacity. The move could also pave the way for the release of its mainstream sub-brand scheduled for 2024, according to executives.

Third generation swap station

Unlike many of its rivals, Nio has long preferred swapping over charging. Swapping stations give drivers a fully-charged battery pack in a few minutes compared to varying charging wait times, which can range anywhere from 30 minutes to several hours. But the former tends to come with a higher price tag to the provider, given the more complex infrastructure and equipment. 

On Tuesday, Nio announced that its third generation power swap station could offer up to 408 swaps per day, an increase of 30% compared with the previous generation. Each swap takes less than five minutes, meaning 20% less time spent for users.

Shen said that 90% of the 1,000 swap stations in the pipeline this year would comprise the latest version, creating the possibility of serving different brands – both those under the Nio umbrella, including the forthcoming Alps sub-brand, and those of other carmakers if compatible. The latest swap facility features the potential to accommodate more vehicle models with wheelbases between 2.8 meters and 3.3 meters, an increase from the upper limit of 3.1 meters of the previous generation.

Meanwhile, Nio is pushing for more hybrid locations that will include a swap facility and a number of charging piles. Such an approach could almost double the service capacity of existing charging stations offered by competitors with a field of the same size and for the same grid capacity, allowing the station to offer both swapping and charging during peak hours and charge batteries for future swaps during off-peak hours, Shen added.

The company did not reveal how much it would cost to manufacture and operate the latest version of its swap station. “The value is more important than its cost,” said Shen.

‘Power swap district’

For some Nio buyers, battery swapping (although a capital-intensive approach) is the reason they choose Nio over other EV brands since many have difficulties installing private chargers.

A Shanghai owner surnamed Dai picked Nio’s ET5 over Xpeng’s G9 late last year after finding he couldn’t set up a home charger in his residential area due to load safety considerations. Citing other reasons, such as vehicle design and customer service, Dai told TechNode he was also impressed by the fact that there are at least two Nio swap stations near his office.

Dai is among the Nio owners living in a so-called “power swap district,” a term coined by the company to describe areas where drivers have a swap facility within three kilometers of their residential or office buildings.

The EV maker said that at least 68% of Nio owners live in a “power swap district,” and the final goal is to push the proportion to 90% across the country. “Some of our users still have places 10 kilometers (6.2 miles) away from a swap station, and I believe we owe them one,” said Shen.

Nine-year-old Nio expects battery swaps to create a model for its luxury car business and underpin its goal of delivering 250,000 vehicles this year. One of the key focuses in 2023 for Nio will be the expansion of its infrastructure to Chinese lower-tier cities, as long as each city has a base of around 100-200 users, according to Shen.

READ MORE: Nio ramps up charging and battery swap network as execs remain bullish on 2023 growth

CATL has signed an agreement with HGP Storage that will see the Chinese battery manufacturer supply the Dallas-based entity with around 450 megawatt-hours of lithium-ion batteries for a Texan energy storage operation, the company said on Monday.

Why it matters: The collaboration highlights CATL’s exploration of new avenues of growth in the energy storage sector. It is also the latest landmark for the Chinese electric vehicle battery giant as it expands overseas.

Details: Powered by CATL’s containerized liquid-cooling battery system, the facility will be able store up to 450 MWh of electricity in a single cycle and will begin operation in 2024.

• For comparison, UK clean energy developer Harmony Energy said it began running Europe’s largest battery energy storage system with an energy capacity of 196 MWh in Yorkshire, UK, last November.
• CATL and HGP Storage are forging a long-term partnership with plans to push for the deployment of another five gigawatt hours (GWh) of energy storage systems for public utilities.

Context: Energy storage is the second biggest revenue source for CATL, accounting for about 14% of its total revenue in 2022. The sector sustained strong growth momentum for CATL in 2022 as the company’s revenue from energy storage more than tripled to RMB 45 billion ($6.5 billion) from a year earlier.

• The world’s biggest battery maker, CATL had a 39% share of the global EV battery market in 2022 and accounted for more than 40% of the power battery usage segment, according to figures compiled by industry tracker SNE Research.
• The company has facilitated multiple grid-scale battery storage projects worldwide, including a 1.4 GWh solar power and battery storage facility near Las Vegas. It has also partnered with Ford to build a $3.5 billion battery plant in Michigan, scheduled to begin operations in 2026.
• In a policy proposal sent to Beijing earlier this year, CATL chairperson Zeng Yuqun called for more efforts to accelerate the adoption of lithium-ion batteries for energy storage. Zeng was a delegate of the Chinese People’s Political Consultative Conference, the country’s top political advisory body.

Geely’s high-end car brand Lynk & Co will be the first sub-brand from Geely to incorporate an in-car operating system called Flyme Auto in its upcoming sports utility vehicle called the 08, the brands announced on March 24. Flyme is developed by Xingji Meizu, a company established by Geely’s founder after Geely acquired smartphone brand Meizu last July. 

Why it matters: Lynk’s use of the Meizu operating system is the result of Geely’s long-term effort to develop more car technology in-house. The collaboration will be a test for both brands — Geely and Meizu — with the former focusing on building its software self-sufficiency and the latter looking to revive its diminishing smartphone business by testing its system on its new owner. 

Details: The operating system, Flyme Auto, is built jointly by Meizu and Ecarx (an auto tech startup backed by Geely). It is an all-new digital cockpit and infotainment system based on the electronic architecture of Meizu.

• The news was made public by Ecarx’s chief executive Shen Ziyu who made the announcement at a corporate event on Friday in the central city of Wuhan. He also added that Lynk & Co’s 08 crossovers would be the first model to use Flyme and Ecarx’s Antora 1000 Pro supercomputer platform.
• Shen said he expected the Lynk & Co 08 crossover, scheduled for release Thursday, to be a flagship example to automakers of how Ecarx could empower the development of in-car technology ranging from autonomous driving to video streaming.

Context: Geely made its first foray into the Chinese smartphone market in late 2021, hiring talent from domestic electronics companies such as ZTE and Xiaomi, and setting up a venture called Xingji Shidai in which chairman Li holds a 55% share. Xingji Shidai acquired the majority stake in Chinese phone maker Meizu last July, TechCrunch reported.

• Many Chinese automakers have been using high-performance chips from US chip giants Nvidia and Qualcomm for their automated driving systems and car dashboards. Some models of Geely’s Lynk have also used Qualcomm. These supply routes are now threatened by US restrictions on chip exports to China. EV upstarts Nio, Xpeng Motors, and Li Auto are also developing chips in-house to ensure their supply of the key components.

BYD is setting up separate divisions with corresponding executive appointments and dedicated operation teams for each brand under its diverse portfolio in a move to improve efficiency and boost internal competition, local media outlet 36Kr reported.

Why it matters: The move comes as BYD pursues a wider customer base, especially in the luxury car segment, rolling out several new brands and offerings. The firm is also seeking to maintain its leadership of the Chinese electric vehicle space amid rising competition.

• The automaker originally set an ambitious sales target of 4 million units this year, which will more than double 2022’s number, financial media outlet Caixin quoted chairman Wang Chuanfu as saying. The company later declined to provide a guide figure for 2023, citing multiple challenges.

Details: Early this year, BYD carried out a reorganization under which its Dynasty, Ocean, and Denza series would be run as separate units in terms of vehicle development and project management, 36Kr reported on Friday, citing people familiar with the matter.

• The Chinese manufacturer has named executives, mostly existing automotive program directors or heads of the respective businesses, to lead each unit, calling them “brand research and development institutes” (our translation).
• Each team should be able to better allocate resources with its own leadership structures and profit-and-loss statements while maintaining access to company-wide vehicle technologies, the report said, adding that the new structure has also been adopted by rival carmakers such as Geely.
• BYD has implemented various measures to streamline operations and boost internal competition since last year, such as revamping its evaluation scheme for employee performance and letting go of those with the lowest grades, according to the report.
• BYD did not respond to TechNode’s request for comment.

Context: China’s top EV maker by sales volume has been quickly expanding its product offerings to a broader range of vehicle types than the affordable, down-to-earth offerings it has traditionally marketed.

• BYD debuted the first two models under its high-end Yangwang brand at the beginning of 2023 and is on track to set up another premium, more personalized brand (codenamed F) later this year. Both new brands will have showrooms independent of BYD’s existing sales networks.
• The company also operates Denza, a mainstream luxury brand initially co-developed by the Chinese carmaker and Daimler in 2010 and which posted sales of 9,803 D9 multi-purpose vehicles as of December, five months after its launch. Denza is expected to introduce two new electric crossovers this year.

Nio and Li Auto this week reaffirmed plans to stick to their pricing strategy, bucking an industry-wide trend of significant price cuts in China initiated by Tesla and followed by dozens of auto majors from Toyota to Volkswagen. The young electric vehicle makers are looking to protect their superior brand images and achieve profitable growth despite concerns of a slowdown in sales in the short run, according to industry observers.

Why it matters: The ongoing price war in the Chinese auto market has created an unhealthy situation, as it might cause a growing number of consumers to wait on the sidelines in anticipation of further price reductions, UBS analysts told investors in a Wednesday note.

• Sales in provinces with local subsidies such as Hubei could see a temporary boost, wrote analysts led by Paul Gong. However, they also cautioned that for many companies, their brand premiums could be negatively affected, making it more difficult to sell their cars at normal prices in the future.
• China’s passenger EV sales increased 9% year-on-year to around 131,000 units during March 1-12, while total retail sales of passenger cars declined 17% against the same period last year to around 414,000 units, according to figures published Wednesday by the China Passenger Car Association.

No price cuts planned: Nio has no plans to cut prices for, or release affordable versions of, its flagship models to counter recent price cuts by competitors, Pu Yang, assistant vice president of sales operations, told Chinese reporters on Tuesday. A Nio spokesperson confirmed the report.

• In-store visits to Nio showrooms over the past weekend rose to a new three-month high, according to Pu, who added that some potential customers are holding off on purchases and waiting for prices to stabilize, which has affected order intake.
• Nio will compete for a larger market share by offering competitive prices in the premium car segment and shoring up services with the expansion of its battery swap facilities, Pu said, citing the strength of its products and brands.
• Nio’s domestic sales declined to 2,170 units during the week of March 6-12 from 3,345 units a week earlier, according to figures compiled by Chinese auto trade media outlet EV Observer. In comparison, Li Auto’s sales grew by 32% to 4,243 units during the same week.

Protection against price cuts: Li Auto also made a related move on March 11 by offering a price guarantee on its EVs until the end of the month to reassure customers that no price cuts are on the horizon. CEO Li Xiang said on March 2 that the company would stand by its pricing strategy.

• Four car brands are following suit. On Monday, Denza, BYD’s premium EV brand, announced an upfront price protection program through which it will give customers a rebate if there is a price reduction for its D9 multi-purpose vehicles within 90 days of purchase. This comes soon after the company slightly raised the price of its electric minivan to RMB 395,800 ($57,302) on March 1.
• Lynk & Co, owned by China’s Geely Auto Group, as well as younger makers Hozon and Leapmotor, had made similar moves as of Thursday. However, on Feb. 27, Lynk & Co began selling a cheaper version of its 01 models, which will be available until the end of April at a price of RMB 159,900, an 11% reduction compared to the 2023 version of the hybrid crossover.

An all-out price war: China’s car price war was in full swing last week when state-owned manufacturer Dongfeng Motor slashed the prices of some models, such as the Citroen C6, by up to RMB 90,000, with the help of incentives from the government of the central Hubei province.

• At least 30 domestic and international carmakers have joined the fight, Bloomberg reported. SAIC-Volkswagen on Monday announced a massive cut of up to 20%, or RMB 40,000, for EVs under the German automaker’s ID family, SCMP reported. Meanwhile, some local BMW dealers reportedly offered a discount of as much as RMB 100,000 on its i3 sedans.
• Experts cited excess inventory of gas-powered vehicles, waning competitiveness of joint brands by Chinese makers and their overseas partners, and Beijing’s full implementation of new emission rules this July as reasons for the price reductions. Analysts from China’s Huatai Securities expected most price campaigns to last until the end of March.
• Multiple EV makers have been tempted to follow Tesla’s lead and reduce the prices of their vehicles since late last year when the US carmaker launched price promotions to boost sales. This was followed by a reduction of up to RMB 48,000 on select models early this year, forcing rivals from BYD to Xpeng Motors to lower their prices to stay competitive.

READ MORE: Chinese EV makers rush to offer big incentives as sales slide

Hozon, a Chinese electric vehicle maker backed by CATL, broke ground at its first overseas car plant in Thailand on Friday, as the company eyes growing demand for green vehicles in Southeast Asia.

Why it matters: The move is the latest example of Chinese automakers looking to crack global markets and find new revenue sources while dealing with increased competition and weakening demand at home.

Details: Hozon announced on Friday that construction of the company’s first overseas factory, located on the northeast side of Bangkok and due to have an annual capacity of 20,000 vehicles, has started, with mass production set to begin in January 2024.

• The Thailand plant will be built with local partner Bangchan General Assembly Co., Ltd. and become a major base to produce and export right-hand-drive EVs to ASEAN countries, according to chief executive Zhang Yong.
• Also known as Neta Auto in China, Hozon aims to sell 10,000 vehicles in Thailand as part of its goal of selling 300,000 vehicles this year. The company also has plans to enter the Middle East and Europe, though it has not revealed further details.

Context: Hozon began selling its third production model, the Neta V, in Thailand last August, marking its entry into the country’s growing EV market.

• Sales of the entry-level crossover reached 1,809 units in Thailand in the first two months of this year, making it the second best-selling EV model in the country following BYD’s Atto 3, according to figures compiled by Autolifethailand.
• Thailand reported total sales of 8,515 EVs over the same period, of which 3,108 were BYD compact sports utility vehicles. Fitch said it expected EVs to account for 4% of the country’s total car sales in 2023, and in the medium term, the Thai government is aiming for 30% of all new cars made in the country to be EVs by 2030.
• Multiple Chinese carmakers have been piling into the regional Southeast Asian market. BYD began establishing a $491-million Thai car plant, with a proposed maximum output of 150,000 vehicles, last year. The plant is scheduled to start operating in 2024.
• Great Wall Motor opened a factory in the country in mid-2021, which it acquired from General Motors a year earlier, and can churn out up to 80,000 hybrid and electric cars annually. SAIC has been manufacturing MG-branded cars with local conglomerate CP Groups since 2014.

READ MORE: Meet the Chinese carmakers racing to get a larger share of the global market

Two of Xpeng Motors’ vice presidents are stepping down after more than five years in their respective roles as the EV maker carries out a wider leadership restructuring, according to two people familiar with the matter.

Why it matters: The departures are Xpeng’s latest leadership reshuffle after it appointed Wang Fengying, a former executive at Great Wall Motor, as the company president on Jan. 30. Xpeng is undertaking a drastic reorganization in the hopes of turning its prospects around as falling sales add to its stresses in an increasingly competitive EV market. 

• The reshuffle is also meant to help chief executive He Xiaopeng reinforce his control over the company and give more weight to Wang, the sources said. Industry observers expect Wang to guide Xpeng through these difficult times.

Details: Liu Minghui, a long-standing vice president of powertrain engineering at Xpeng, stepped down last month after more than five years in the role and was replaced by Gu Jie, who recently joined the company from US auto supplier Delphi.

• Gu will report directly to CEO He Xiaopeng. Xpeng is looking to improve its development and manufacturing competitiveness, especially regarding electric powertrain and battery-related technologies, one of the sources told TechNode.
• As part of the overhaul, Liao Qinghong, a vice president of sales and chief of talent at Xpeng, handed over some of his responsibilities to Yi Han, a former executive at Geely, in preparation for leaving the company.
• Before joining Xpeng earlier this year, Yi led marketing efforts and brand execution for Volvo, Lynk & Co, and Smart within the Geely Group for more than a decade, public records show.
• The ongoing reorganization will dilute the authority of some founding members, a potential hindrance to the company’s refocus on efficiency and profitability, according to one of the sources and a third person with knowledge of the situation.
• This significant change follows the late January appointment of president Wang to a role that includes responsibility for major operations from vehicle planning to sales management, roles that used to be overseen by co-founder Henry Xia and Liao, respectively.
• An Xpeng spokesperson declined to comment when contacted by TechNode on Thursday. Chinese tech media 36Kr first reported the news.

Context: Xpeng has made a series of moves over the past months as it hopes to drive sales back up amid growing competition from larger players. Soaring battery material prices have also weighed on the company’s profitability in the past year.

• The Guangzhou-based automaker set up multiple cross-functional teams to encourage collaboration and boost efficiency last October, followed by new measures aimed at lowering costs and streamlining the company’s workflow weeks later.
• The company is rushing to launch two all-new vehicles and three redesigned models in the hope of reaching a modest delivery target of around 200,000 vehicles this year. P7i, a revamped version of the company’s best-selling model P7, launched sales on Friday with a starting price of RMB 249,900 ($35,904).
• Meanwhile, sales of the G9 crossover, initially supposed to be a flagship, high-volume model, flagged to 2,249 units in January from 4,020 units a month earlier, following heated criticism of pricing and specs from customers when it was launched in September. The company delivered a total of 6,010 vehicles last month without specifying the breakdown of models.
• Xpeng’s total deliveries were 11,228 units during the first two months of this year, falling further behind rivals Li Auto and Nio, who delivered 31,761 and 20,663 vehicles respectively. Li Auto reported a gross margin of 20.2% as of the fourth quarter of 2022, while Nio’s margin plunged to 3.9%. Xpeng generated a 13.5% gross margin as of the third quarter of last year.