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

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

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.

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

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 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.

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.

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

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

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.

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

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.

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

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

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.

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.

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

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.”

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).

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.

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

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 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

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.

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.

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. 

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.

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.

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).

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.

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.

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

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

Chinese automakers mostly saw a return to their growth trajectory in electric vehicle sales in February after taking measures to ride out a seasonal lull worsened by Beijing’s phase-out of EV purchase subsidies. 

BYD, GAC’s Aion, and Nio saw strong recoveries, while Xpeng and Huawei-backed Aito continue to fall behind in the competition. However, sales are still down from the historic highs of the past year, and a tougher competitive environment could create more headwinds in the near term, according to executives.

Why it matters: The figures come as many automakers have said they face increasing pressure from competitors just as operation costs mount. 

• Li Auto chief executive Li Xiang told Chinese reporters on Thursday that the lingering impact of the end of EV subsidies and recent price cuts by bigger rivals will continue to weigh on sales in the first quarter.
• Nio also anticipates more pressure on its margins as the company currently undergoes “a transitional period,” CEO William Li told investors on Wednesday, adding that it was clearing out inventory of its older vehicles in preparation for the release of new models in the second quarter.

Strong recovery: BYD has continued its growth momentum in customer demand despite a slowdown in the overall Chinese EV market, reporting delivery of 193,655 vehicles in February, a jump of 119.4% from a year earlier and an increase of 28% from the previous month.

• BYD has retained its dominant position, especially in the price segment of RMB 100,000 to RMB 250,000 ($14,478 to $36,196), according to Sun Shaojun, founder of auto consumer service platform Che Fans.
• GAC’s EV unit Aion also saw a big revival, with sales almost tripling to 30,086 units from a month ago. Sun said Aion was among the few rivals to BYD that “can catch up a little bit in certain regions and car segments.” (our translation)

Back to normalcy: Li Auto’s February sales grew 97.5% year-on-year to 16,620 units, representing a mild increase of 9.8% from a month earlier. Nio and Hozon posted double-digit growth from a month ago with 12,157 and 10,073 vehicle deliveries, respectively.

• Hozon  began offering a de-facto price cut on Feb. 3, as customers who placed an order for its Nezha S electric sedan with a deposit of RMB 5,000 by the end of the month could secure a rebate of RMB 20,000.
• Li Auto and Nio are expected to deliver around 23,200 and 12,300 vehicles respectively in their best-case scenarios for March, as delivery guidance for the first quarter reached 55,000 and 33,000 units.

Lackluster sales: Xpeng Motors is still struggling to get back on track after facing poor sales and criticism over its pricing strategy in 2022. Its vehicle deliveries totaled 6,010 in February, despite a recent price reduction. This is just 15.2% higher than January’s sales and 3.5% lower than a year ago.

• Huawei-backed EV maker Seres also saw little improvement following major promotions on their Aito-branded EVs, as February deliveries fell 21.7% to 3,505 units on a sequential basis.
• Sales of Changan’s EV marque Deepal declined 33.1% sequentially to 4,103 units. On Monday, the automaker kicked off a spat with rival Geely about the design of the latter’s newest EV.
• Geely’s premium brand Zeekr posted deliveries of 5,455 vehicles last month, and sales at Hong Kong-listed Leapmotor were up 180.8% from a 12-month low to 3,198 units.

Context: Sales of new energy passenger vehicles, which include all-electrics and plug-in hybrids, rose 9% year-on-year to around 546,000 units from Jan. 1 to Feb. 19, according to figures published by the China Passenger Car Association (CPCA) on Wednesday.

• Gas-powered cars were worse off, as sales slumped more than 30% annually over the same period. The CPCA has estimated 31% annual growth for passenger EV sales to 8.5 million units this year.

Li Auto aims to double its China market share in high-end sports utility vehicles to 20% in 2023, encouraged by buoyant demand from the country’s emerging middle class, chief executive Li Xiang said on Monday.

The electric vehicle maker also reported a solid rise in fourth quarter revenue and an upbeat outlook for the current quarter. Despite intensifying competition and slowing demand in China’s EV market, Li Auto is on track to launch its first all-electric model later this year.

Why it matters: Li Auto has set an annual sales goal higher than analysts had anticipated and much more positive than those from the likes of Nio and Xpeng Motors. If achieved, it would make Li Auto the first Chinese automaker to capture a significant share of the country’s premium car segment, according to Sun Shaojun, founder of auto consumer service platform Che Fans.

Rosy 2023 outlook: If met, the market share goal would more than double last year’s share of 9.5% and equates to an annual sales volume of around  300,000 vehicles in the Chinese premium SUV segment, Li said during an earnings call. This is higher than the 270,000 units forecasted by Bernstein analysts.

• The key to success on this front is a strong product portfolio that covers a broader customer base, according to Li. The carmaker estimates sales in the segment of between 1.4 million and 1.5 million units this year, including gas-powered and electrified crossovers, with a price range of RMB 300,000 to RMB 500,000 ($43,205 to $72,009).
• Li said that vehicle delivery would likely reach 30,000 units per month during the second quarter as shipments of the newly-launched L7 begin in April. Li sees little chance of cannibalization between the five-seat L7 and its larger sibling, the L8. The former is intended to attract small nuclear families comprising two or three members, while the latter targets two-children or three-generation households.

All-electric lineup: Li Auto is on track to launch its first pure electric vehicle model, which will be equipped with Qualcomm’s latest five-nanometer cockpit chip 8295, Li told investors. He added that the company’s battery EV series will cost between RMB 200,000 and RMB 500,000.

• The company sees high battery costs and inconvenient charging as some of the biggest issues for EV penetration and aims to promise future buyers the ability to add 400 kilometers (249 miles)-worth of charge in 10 minutes. Rival Xpeng pledged a similar experience with its premium SUV G9 late last year.
• Meanwhile, Li Auto acknowledged that it has been negotiating new price terms with suppliers, responding to an analyst question about reports that CATL has been offering big discounts on EV batteries, but declined to provide further details. President Ma Donghui said the company would commit to a multi-supplier strategy to ensure stable supply.

Solid Q4 results: Li Auto’s revenue increased 66.2% year-on-year to more than RMB 17.7 billion in the fourth quarter of 2022, compared with estimates of RMB 17.6 billion, according to Bloomberg. Net income declined 10.5% annually to RMB 265 million but improved from a net loss of RMB 1.65 billion in the previous quarter.

• The Beijing-based automaker’s gross margin came out as 20.2% in the quarter, from 12.7% in the third quarter and fairly close to Tesla’s 25.6% over the same period. Peers Nio and Xpeng posted gross margins of 13.3% and 13.5% in the third quarter of 2022, respectively.
• Li Auto expects to deliver up to 55,000 vehicles in the first quarter of this year, which would represent an increase of 73.4% from a year ago. Overall sales of passenger electric cars declined 6.3% year-on-year in January, according to figures from the China Passenger Car Association.

Context: Nio and Xpeng have both set a delivery target of around 200,000 vehicles this year as China’s EV market shifts into a lower gear, partly due to the phasing-out of EV purchase subsidies by the central government last December.

• Nio CEO William Li has said he expects deliveries this year to surpass the nearly 190,000 units Lexus sold in China last year. Xpeng is aiming for accumulated overall sales of 450,000 EVs this year, of which around 250,000 were delivered as of last year, according to an internal letter obtained by local media outlets.
• Li Auto’s first plug-in hybrid vehicle, the Li One, ranked fifth in terms of sales in the Chinese premium SUV segment with the shipment of 78,791 units last year, the CPCA figures showed. Tesla’s Model Y topped the chart with deliveries of 315,314 units, while Mercedes-Benz’s GLC, Audi’s Q5, and BMW’s X3 each booked sales of more than 140,000 units.

Nio will expand its charging network by building at least 400 battery swap stations across China this year, alleviating a major concern among potential buyers that cars have insufficient driving range to travel between charging points, its president said on Monday.

Riding the wave of China’s speedy EV adoption, the electric vehicle maker also launched a special service campaign for owners during this year’s Lunar New Year holiday season, including unlimited free battery swapping and personalized customer service.

Why it matters: Nio’s recent moves to shore up its charging network and customer service capability are expected to further enhance its place in the Chinese luxury car segment, according to president Qin Lihong, who spoke to reporters in Beijing on Monday.

Charging infrastructure: In what Qin described as “a stress test” to check how Nio could “provide users with seamless services that were beyond their expectations” (our translation), Nio swapped nearly 1.25 million EV battery packs between Jan. 13 and Feb. 5 in China. For comparison, the company completed just over 800,000 swaps with a chain of 143 service stations between May 2018, when its first swap facility began operations, and mid-August 2020.

• Nio ran a network of 1,305 battery swap stations around China for a user base of nearly 290,000 drivers as of last year and will build more swap facilities than its previous estimate of 400 this year, Qin said, without giving a new number. The EV maker initially planned to expand its charging network to 1,700 swap stations in 2023, chief executive William Li said on Dec. 24 at Nio’s annual press conference.
• The eight-year-old company also claimed to be carmakers’ biggest EV-charging provider, with a network of 13,629 charging piles in China as of December. During the Lunar New Year holiday season, 76% of the charging sessions using Nio’s charging piles came from non-Nio cars, of which 17.6% were from BYD, 15.8% from Tesla, and 4.1% from Xpeng models. Official figures showed that China had nearly 1.8 million public charging piles as of December.
• Senior vice president Shen Fei said that Nio would scale up its charging operations at a pace that is in line with the increase in its sales volume. This not only refers to the build-up of swap stations but also applies to hybrid locations that include swap facilities and charging piles, which the company believes will better serve clients at peak times.
• Qin added that the seasonal campaign will not significantly impact Nio’s financial results but rather enhance its reputation for premium service and experience, as the company reduced advertising spend accordingly to keep its gross margin flat. Nio began offering owners six free swaps a month in late 2020, but maintains its policy of unlimited free battery swaps for an undisclosed number of early owners.

Unexpected services: In addition to existing, regular on-call valet charging and parking services it offers to car owners whose vehicles are running out of power, Nio provided a wide range of personalized, value-added services during the recent Lunar New Year holiday season.

• This ranged from family photoshoots at the company’s clubhouse-style flagship stores to the feeding of pets at the homes of Nio owners who were traveling, which a Shanghai-based Nio owner surnamed Dai described as “trivial but touching” when contacted by TechNode on Monday.
• Shen clarified by saying that these service options did not put pressure on its business, as most of them were provided unofficially by frontline employees who were simply working hard to fulfill customers’ needs.

Industry outlook: Nio remains optimistic that this year’s sale figures will exceed the roughly 184,000 units Lexus sold in 2022 in China. The auto upstart expects solid growth momentum for the country’s EV market despite a recent slump as China dropped its COVID-19 prevention measures.

• Qin added that intelligent, electrified, and high-end vehicles will continue to gain traction in the world’s biggest auto market, citing the average sale price of passenger vehicles in China, which is RMB 30,000 ($4,422) more in 2022 than in 2019.
• Industry observers expect rising competition and waning profits for Chinese automakers this year amid Beijing’s phase-out of EV purchase subsidies and a slow post-pandemic recovery. The China Passenger Car Association estimated passenger EV sales will reach 8.5 million units in 2023, representing an increase of around 50% from a year ago.

READ MORE: China’s EV battle 2022: why BYD is leaving Tesla and Xpeng in the dust

Major Chinese electric vehicle makers, from Aion to Nio, are joining the likes of Xpeng Motors in an industry-wide price war ignited by Tesla, offering generous sales incentives to boost demand after posting dismal delivery results for January.

Why it matters: Sales growth for new energy vehicles (NEVs) at the start of 2023 has reached a bottleneck after the central government fully scrapped subsidies for purchasing them at the end of December, the China Passenger Car Association (CPCA) wrote in a post on Wednesday, quoting January sales figures. NEVs is a catchall phrase used in China that includes all-electric cars, plug-in hybrids, and hydrogen fuel-cell vehicles.

• A price war kicked off by Tesla has left many consumers on the fence about buying an EV in the immediate future, as some automakers followed suit with price cuts while others raised prices to help offset rising costs, the industry group added.

READ MORE: Local Chinese authorities unveil stimulus measures to spur EV sales

Flagging January sales: Retail sales of Chinese passenger electric vehicles fell by 1% year-on-year and 43% month-on-month to around 304,000 units from Jan. 1 to Jan. 27, according to figures published by the CPCA on Wednesday. The industry group has yet to publish figures for the full month, but reports by many Chinese EV makers are out, and they show a definite sales slump.

• GAC’s Aion on Wednesday reported a 66% month-on-month drop in vehicle deliveries to 10,206 units in January, during which time the company raised its car prices by between RMB 3,000 and RMB 8,000 to make up for rising costs.
• Figures from Xpeng Motors and Huawei-backed EV brand Aito more than halved sequentially to 5,218 and 4,475 units respectively. Both companies followed Tesla’s move with significant price cuts across their vehicle lineups early last month.
• Nio delivered 8,506 vehicles in January, marking a 46.2% decrease from a month earlier, while Li Auto reported a relatively solid performance with deliveries falling 28.7% sequentially to 15,141 vehicles. CATL-backed Hozon sold 6,016 EVs, down 22.8% from a month ago.
• Zeekr’s January sales of 3,116 vehicles were less than a third of the number delivered in December, which the company attributed to a 22-day production suspension for an upgrade at its Ningbo facility. Hong Kong-listed Leapmotor only delivered 1,139 vehicles, an 86.6% drop from a month ago, but didn’t provide any further details.
• BYD handed over 151,341 EVs, including around 10,400 units overseas, which was 35% lower than December’s sales but 62.4% higher than in the same month last year, according to a Wednesday statement.
• Other than diminishing subsidies, most companies blamed the slide on the seven-day public holiday during the Lunar New Year, as well as the spike in coronavirus infections that swept China after the country’s zero-Covid policy ended in early December, among other reasons.

Nio’s big promotion: Nio on Wednesday began offering customers a package of discounts and special offers for its first-generation electric sports utility vehicles, including a more than RMB 10,000 ($1,483) allowance to cover the cost increase caused by the phasing-out of Beijing’s subsidy.

• The EV maker also unexpectedly discounted inventory of the older version of its ES8 and ES6 crossovers by at least RMB 18,000 and offered existing car owners an additional exchange discount of RMB 15,000, local media outlet Powerhouse reported on Thursday, citing two Nio salespeople.
• The company also offered buyers free access to its advanced driver assistance software Nio Pilot which has a sticker price of RMB 39,000, among other promotions. If all these offers are combined, one can purchase a performance version of the 2022 ES6 SUV for RMB 313,700, more than RMB 100,000 cheaper than last month.
• Nio on Thursday responded by saying the company is about to launch its redesigned ES8, ES6, and EC6 models and is therefore offering discounts on the small amount of inventory and showroom cars of the old models it has left.
• Sales of Nio’s ET7, ES7, and ET5 cars, built upon the company’s second-generation technology platform, accounted for 85.6% of its monthly delivery in January, according to a Wednesday statement.

More price campaigns: State-owned automakers SAIC and GAC also announced they would slash prices on their vehicles this week in the hope of grabbing a share of sales during a traditionally slow season.

• Rising Auto, an EV brand launched by Volkswagen’s manufacturing partner SAIC in mid-2020, on Thursday cut the starting price of its base R7 crossover by 7.5% to RMB 279,900. The model is also available at a big discount of RMB 10,000 and can be purchased for RMB 195,900 if customers subscribe to its battery-swap program.
• On Wednesday, GAC’s EV unit Aion also began offering a limited discount of RMB 5,000 on its Aion Y SUVs and Aion S Plus sedans, priced from RMB 137,600 and RMB 149,800 respectively, before the end of this month. 
• A day earlier, Geely’s luxury EV brand Zeekr said that customers who place their orders before the end of March would be able to get certain discounts on car insurance and optional parts.

Skirmishes have surrounded China’s speedy uptake of electric vehicles in the past year, with industry giant BYD reigning supreme but an increasingly large crowd of challengers looking to muscle in on the action. Once-promising startup Xpeng Motors and major automaker Great Wall Motor have been among those to falter in 2022 – and the war is far from over.

Industry observers link BYD’s success to China’s national shift towards electric vehicles, the company’s highly-integrated supply chain across key components, and a rising consumer preference for high-quality, cost-competitive automobiles as recession looms. 

Xpeng’s recent setbacks, however, reflect structural weaknesses at the company, including limited competitiveness and low operational efficiency in a crowded marketplace. Now, the risk of falling behind the competition has become real for the Guangzhou-based company.

Even Tesla faces an eroding market share in a highly competitive field, thanks to an onslaught of new models from various domestic rivals. Meanwhile, foreign auto giants from Volkswagen to Ford have long lagged behind Chinese counterparts in transitioning to green energy.

Here, we look at the annual results of China’s EV leaders and attempt to explain the dynamics behind some of the biggest winners and losers of the past year.

Winners and losers 

Despite being a bright spot in a slowing auto market, China’s two-year run of huge growth in the EV sector hit unexpectedly fierce competition as it shifted into a lower gear in the second half of 2022.

BYD was the biggest winner of the year, with annual sales of 1.86 million electric cars. The company’s output was more than triple 2021’s figure of around 600,000 units, comfortably exceeding its goal of 1.5 million units.

Tesla was left a distant second. The company’s sales started to slow last year as concern grew about an underlying mismatch between supply and demand. In 2022, the US automaker delivered 439,770 China-made vehicles to local customers, a 37% increase from a year ago and significantly lower than its 50% growth target for overall sales volume.

Besides BYD and Tesla, multiple Chinese EV makers including Nio and Xpeng embarked on 2022 with optimism and ambitious sales targets. However, only a handful managed to hit their goals. Aion (the EV arm of state-owned automaker GAC) and Hozon kept their word by selling around 271,000 and 152,000 EVs respectively last year. Geely’s premium EV brand Zeekr also achieved its goal by delivering just over 71,000 vehicles.

China’s US-listed EV makers mostly underperformed. Nio played tough to secure around 80% of its 150,000-vehicle delivery goal, while Xpeng delivered just over 120,000 units of its 250,000 unit target.

Why BYD dominated the market

In December, when most automakers struggled to protect their market shares by offering generous discounts as the Chinese government phased out EV subsidies, BYD went the opposite way by announcing a price rise of up to RMB 6,000 ($870) across its lineup. The move proved BYD’s role as “price maker” in the mass market, analysts at Jefferies wrote in a Dec. 1 report.

Analysts attributed BYD’s dominance partly to its success in ramping up manufacturing capacity and building a secure, integrated supply chain from batteries to chips. In 2022, when the company tripled its annual car capacity to around 3 million units at its eight manufacturing locations, according to public information gathered by investors, it also more than doubled its battery capacity to 285 gigawatt-hours (GWh), according to estimates by Founder Securities. A company spokesperson declined to comment on the capacity figures.

Also, the automaker has adopted a dual strategy of betting on both all-electrics and plug-in hybrid EVs (PHEVs) as range anxiety continues to be a top concern among local buyers. BYD offers nearly 70  models in major configurations and price categories. This helps the company stand out in a crowded market where many competitors pick a type and limit buyers’ options.

Why Xpeng and Great Wall Motor are losing ground

As China’s EV sales reported nearly 100% annual growth in 2022, Xpeng Motors and Great Wall Motor are among the most surprising names for whom sales growth dipped well below the industry average. The two companies sold 120,757 and 131,834 EV units last year, posting a flat increase of 23% and a 4% decline from a year earlier, respectively.

Multiple factors have put pressure on the two companies, including weaker consumer sentiment and interest rate hikes. 

The sales slump at Great Wall Motor indicates a major setback in the company’s slow shift to EVs. In 2022, monthly sales of the company’s Haval H6, once China’s top-selling gas-powered crossover, fell 75% to around 20,000 units from historic highs, as it appeared to be outpaced by popular EV models produced by Tesla (Model Y) and BYD (Song Plus). 

Ora, the company’s dedicated EV sub-brand, saw sales decline by 23% year-on-year to 103,996 units. Nevertheless, Great Wall Motor’s management has big plans for 2023 — promising to launch more than 10 EV models, including five new PHEVs under the Haval brand and two new models under the Ora marque.

Xpeng is facing a more complicated external environment, as well as the threat of increased pressure from rivals, said David Zhang, a school dean at Jiangxi New Energy Technology Institute. Not only are sales of big name rivals such as BYD and GAC’s Aion gaining momentum, but younger makers such as Hozon and Leapmotor are increasingly catching up. That’s the broader context behind Xpeng currently restructuring its business, according to Zhang.

Meanwhile, Xpeng is exposed to a potential demand mismatch risk in the short-term, as consumer confidence in vehicle intelligence technologies lags behind ambitious plans to bring self-driving cars to the market, analysts from Zheshang Securities told local media outlet Jiemian.

The Alibaba-backed EV maker has pledged to put more effort into overall car-making after reporting three consecutive months of dropping sales as of October and losses of RMB 6.78 billion ($1 million) for the first three quarters of 2022. It is also dealing with an aging product portfolio and implementing cost control measures to boost efficiency and drive sales, with chief executive He Xiaopeng promising to refocus on the core company after spending some time and energy on emerging businesses such as flying cars.

“We have high expectations for 2023. It’s a game of both competence and persistence. We have winning cards to play the game, and the evolution is making good progress,” a company spokeswoman said when contacted by TechNode.

Trend 1: Bring everything in-house

In-house manufacturing of key components has become one of the biggest trends in China’s EV industry over the past year, as many automakers look for ways to reduce supply chain vulnerability amid persistent chip shortages and the surging cost of battery materials. Among them, BYD is widely seen as a role model for this vertical integration strategy: the automaker builds its own supply chain and performs most of the activities required to bring its vehicles to market.

Already the world’s second-biggest battery maker and a major domestic supplier of power semiconductors for automobiles, BYD is now looking to expand production capacity significantly and accelerate the development of new products. Founder Securities expects BYD’s capacity to increase to 445 GWh-worth of batteries to close the gap with dominant player CATL by the end of 2023. In November, the company abandoned an initial public offering plan for its semiconductor unit as it decided to focus instead on expanding the capacity of a local plant by 80% to reach 360,000 wafers in 2023.

Other major industry players, from state-owned GAC to US-listed Nio, have also been racing to develop battery and semiconductor technologies in-house to ensure a secure supply of the key components. Here are some recent moves and potential developments for the companies heading into 2023:

• On Nov. 18, Svolt, an EV battery startup backed by Chinese automaker Great Wall Motor, filed initial paperwork for a public share sale on Shanghai’s Nasdaq-style Star market. The company is looking to raise RMB 15 billion to build three manufacturing plants with a combined annual capacity of around 106 GWh.
• On Dec. 29, GAC began building an RMB 2.2 billion drivetrain plant in Panyu, a city in the southern province of Guangdong, with mass production to kick off at the beginning of 2024. Initial capacity will enable it to assemble drivetrain systems for 400,000 battery EVs and 100,000 plug-in hybrid vehicles annually by 2025.
• On Dec. 21, Xpeng confirmed that it has set up an RMB 5 billion subsidiary to produce battery packs on its own but will still source battery cells from partners. On Oct. 25, peer Nio made a similar move by forming an RMB 2 billion subsidiary for battery manufacturing, in addition to a $32.8-million research facility for battery development.
• On Oct. 10, Chinese media outlet LatePost reported that both Nio and Xpeng had formed hundred-strong teams to work on chips for autonomous driving, while Li Auto had been hiring chip designers for more fundamental semiconductor components.

Trend 2: Short-term bumps

Analysts have warned about the prospects of a bumpier year for EV makers in 2023, and sure enough, the industry is already seeing some sharp movements. On Jan. 6, Tesla made a big splash by cutting the prices of its China-made vehicles by between 6% and 13.5%, a move that Sun Shaojun, a popular Chinese car blogger, described as kicking off an industry-wide battle for survival in the year ahead.

Sun added that many rivals would probably have to follow suit in the face of such a big promotion by an industry leader. Meanwhile, analysts at Bernstein expect competition to heat up with as many as 126 new battery EV models and 55 new plug-in hybrid models coming to market in 2023, a 40-50% increase on last year.

In anticipation of a post-Covid recession and in light of EV subsidies being scrapped, sales are expected to slow this year. Credit Suisse’s sales forecast of 9.4 million EV sales in China is one of the more bullish on Wall Street, while Bernstein more cautiously holds that 8 million units will be sold in the country this year.

An ongoing growth story 

And yet, long-term growth prospects remain buoyant, as demand shifts from policy-led to consumer-driven, Bernstein analysts wrote in a Jan. 5 report. UBS shared the sentiment, expecting the new energy vehicle (NEV) penetration rate, mainly for all-electrics and PHEVs, to grow by 10% this year to reach 37% of all new car sales.

2022 proved to be a big year for Chinese EVs. The central government achieved its goal of EV adoption approaching 25% of total car sales three years ahead of schedule, as industry sales nearly doubled to 6.8 million units. Still, pressure on margins is likely to persist in the near term for smaller companies, which have already been exposed to high battery material costs.

Looking ahead, China has cemented its growth momentum in the global EV race, but industry players should expect short-term sacrifices to hit their profits as they glimpse a bigger and brighter future.

The latest member of BYD’s Ocean family of EVs has been inadvertently revealed in China by the country’s Ministry of Industry and Information Technology (MIIT), as the electric vehicle maker looks to extend its leadership in a competitive entry-level market segment.

Why it matters: The compact EV, called Seagull, will likely be the cheapest model in BYD’s lineup, and the Warren Buffett-backed automaker will face stiff competition in a segment dominated by standouts such as Wuling’s popular and inexpensive Hongguang Mini EV.

Details: The Seagull compact SUV will measure around 3.8 meters in length with a wheelbase of 2.5 meters, according to information released by MIIT on Jan. 11. This is shorter than the length of 4.1 meters and the wheelbase of 2.7 meters of BYD’s Dolphin hatchback, both under the company’s ocean-themed EV family.

• Outed in several images from MIIT, the Seagull’s rounded silhouette and sharp shoulder line follow the same sporty design language as the rest of the automaker’s Ocean models, which cater to a younger consumer segment compared with its Dynasty Series.
• Industry observers estimated the Seagull would be priced below RMB 100,000 ($14,916), compared with the Dolphin, which is priced between RMB 116,800 and RMB 136,800. The Seagull will be powered by an electric motor with an output of 55 kW, also lower than the 70 kW delivered to the Dolphin.
• The Chinese government requires automakers to submit documents regarding new product information before launch to gain approval for models sold in the country. A BYD spokesperson declined to comment on launch details when contacted by TechNode on Monday.

Context: Budget-friendly, entry-level micro-EVs accounted for around one-third of passenger electric vehicle sales in China last year, according to figures from the China Passenger Car Association (CPCA). Competition in the sector has been heating up in recent years, and buyers are more price-conscious than those of luxury cars.

• Wuling’s Mini EV maintained its title as China’s best-selling EV model in 2022 with sales of 404,823 units, representing a slight 2.4% increase from a year earlier. Other popular micro-EVs include Chery’s QQ Ice Cream and Changan’s Benben, with deliveries of each exceeding 90,000 units last year. Meanwhile, Hong Kong-listed Leapmotor also sold 61,919 T03 compact hatchbacks, CPCA figures showed.
• Earlier this month, BYD said it had delivered more than 230,000 Dolphin vehicles since the launch of the first model under the Ocean Series in August 2021. The company also sold more than 50,000 Seal crossovers last year after delivery began in August. The Seal, the second member of the Ocean marque, is a direct rival to Tesla’s Model 3 with a starting price of RMB 212,800.

BYD showed off its first two luxury car models under its new Yangwang brand on Thursday. The U8, an off-roader, and the U9, a sports car, will each be priced at more than RMB 1 million ($150,000) and equipped with four electric motors that boast top-of-the-range performance in extreme conditions.

Why it matters: In the company’s latest move to enhance its leadership position as China’s top-selling EV maker, BYD has become one of the few domestic automakers to enter the uncharted waters of the super-luxury car segment where German auto majors have traditionally had a strong grip.

Details: The full-size U8 off-roader and the high-performance U9 sports car will come with an innovative electric drive system using four separate motors, one controlling each wheel, that allows the vehicles to do a tank turn – a 360-degree spin on its own axis.

• This technology could “totally outperform” the way internal combustion engines work in terms of vehicle control and provide “utmost safety” for passengers, BYD’s chairman Wang Chuanfu said on Thursday during a press conference in Shenzhen (our translation).
• Vice president Yang Dongsheng added that the company’s quad-motor EV drivetrain, along with a new torque control system, could apply torque to wheels with millisecond precision and mean better control over the vehicles than slow-responding gas engines.
• The U9 and U8 are built on an 800-volt integrated architecture, with four electric motors offering a combined output of more than 1,100 horsepower and a rotation speed of 20,500 revolutions per minute. The two models can accelerate from 0 to 100 km/h (62 mph) within two and three seconds, respectively.
• BYD has not revealed the pricing details or launch dates for the two vehicles but will open showrooms in top-tier Chinese cities Beijing, Shanghai, Shenzhen, and Guangzhou from the first quarter of this year. Yangwang will be operated with retail locations independent of BYD’s existing sales networks.

Context: BYD revealed the name of its new luxury EV brand, Yangwang in Chinese pinyin, in November, saying the marque would feature the company’s most advanced technology and come with a target price range of between RMB 800,000 and RMB 1.5 million ($116,707 to $218,825).

• Chairman Wang also confirmed the company’s plans to launch another new sub-brand that “specializes in professional and personalized identities” without giving further details.
• BYD has previously faced setbacks in trying to expand its market reach into the high-end segment. It currently operates a premium sub-brand called Denza in partnership with Daimler. However, the brand, with a target price range of between RMB 300,000 and RMB 500,000, sold just 9,803 units last year.
• Several carmakers have been working to build new high-end auto brands for China. In September, Toyota’s partner GAC showcased its first supercar under the Hyper marque with a starting price of RMB 1.29 million. The company debuted the second Hyper branded car on Dec. 30 during the 2022 Guangzhou Auto Show.
• In November, BeyonCa, an EV startup launched by Soh Weiming, a former executive vice president of Volkswagen China, introduced its first production car. The new model is priced from RMB 898,000 and is set to hit the market by March, Bloomberg reported.
• Human Horizon, another Chinese EV maker, is among the few automakers already active in the super-luxury car segment. It began delivering its first model, the Hiphi X, in May 2021 and reported sales of 2,584 units during the first half of 2022.
• Mercedes, Porsche, and BMW are among the most prominent players in the Chinese high-end auto segment. Porsche sales increased 8% year-on-year to 95,671 vehicles in China in 2021, an all-time high for Volkswagen’s sports car manufacturer. That number dropped 16% in the first half of last year amid Covid-related restrictions.

BYD became the world’s best-selling electric vehicle brand in 2022, managing to sell a record 1.8 million units, more than triple its numbers from a year earlier. Other major automakers also reported improvement in December, according to the latest sales figures. 

Why it matters: The figures show that BYD has had an iron grip on the market in the last year while smaller EV makers faced ups and downs. China’s EV sales in 2022 are set to finish lower than expected as the industry enters a slower period after authorities phased out EV purchase subsidies at the end of 2022.

• China’s wholesale sales of electric passenger vehicles in December will increase by 17% from a month earlier to around 700,000 units, according to estimates by the China Passenger Car Association (CPCA).
• This means China’s new energy vehicle sales for last year could be below the previous estimate of 6.5 million units by CPCA. Passenger EV sales from January to November grew 100% year-on-year to 5.7 million units.

Details: BYD said on Monday that it delivered around 235,200 vehicles in December, an increase of 150.5% from the same period a year earlier. That figure also brings BYD’s total sales for 2022 to more than 1.86 million units, up 208.6% compared to 2021 figures.

• Aion, the electric vehicle unit of Chinese automaker GAC, maintained strong growth momentum with sales of 30,007 units last month. Overall sales surged 126% year-on-year to around 271,000 units in 2022. The company has set a target of selling 600,000 EVs in 2023, according to general manager Gu Huinan.  
• Hozon, a budget carmaker backed by CATL, was another bright spot with deliveries of 152,073 vehicles, an 118% jump compared with 2021. The company exported a significant number of 3,456 EVs and is looking to accelerate overseas expansion in regions such as Southeast Asia and the Middle East in 2023.
• Li Auto also ended the year with a record delivery count, handing over 21,333 crossovers to customers in December and becoming the first Chinese EV startup to reach the 20,000-unit milestone in monthly delivery. The total delivery count in 2022 for the brand was 133,246 vehicles, up 47.2% from a year ago.
• After a difficult third quarter, Xpeng Motors’ deliveries bounced back in December to a normalized level but still fell short of its US-listed peers Nio and Li Auto. The company delivered 11,292 units last month, including 4,020 units of the G9, its first premium crossover, which it launched in September. The final tally was 120,757 EVs, a mild 23% annual increase.
• Huawei-backed EV maker Aito also reported strong deliveries of 10,143 units in December, with total 2022 deliveries topping 75,000 units. 
• Monthly deliveries of Geely-backed EV brand Zeekr also surged 199% year-on-year to 11,337 units, bringing the maker’s total delivery count to 71,941 units.
• Nio delivered 15,815 cars last month, a monthly record high following November’s 14,178 units. Annual deliveries totaled 122,486 vehicles, representing a 34% growth from the previous year.
• Tesla’s deliveries increased 40% to 1.3 million EVs in 2022 from the prior year. The CPCA, which has tracked monthly sales for the company’s China operations since 2020, has not revealed its December sales figure for the Chinese market.

Context: Analysts expect industry sales to hit a plateau in 2023 after several years of strong growth as the Chinese government scraps subsidies for EV purchases.

• Citic Securities forecast sales of new energy vehicles, which mainly include battery-powered EVs and plug-in petrol-electric hybrids, to rise by 31% annually to 9 million units in China in 2023.

Aion and Zeekr, the electric vehicle subsidiaries of Chinese automakers GAC and Geely respectively, each broke their monthly records for vehicle deliveries in October, while US-listed EV trio Nio, Li Auto, and Xpeng Motors lagged behind their peers.

Why it matters: Although Tesla and BYD have long been the undisputed leaders in the Chinese EV market, GAC and Geely are among the traditional automakers leading the chase. The October delivery results also reflect the strong momentum of Huawei-backed EV maker Seres and the mounting troubles faced by Xpeng.

GAC: The state-owned automaker said on Tuesday that it delivered 30,063 Aion-branded vehicles in October, an increase of 149% from the same month last year. That number brings Aion’s total delivery numbers this year to 212,384 vehicles.

• Toyota’s Chinese manufacturing partner is ramping up efforts to meet an annual delivery target of 250,000 Aion-branded EVs this year, with its second auto manufacturing plant for Aion beginning operations in Guangzhou in early October.

Geely: Zeekr made deliveries of 10,119 EVs in October, a record high for Geely’s premium EV brand. Year-to-date sales totaled almost 50,000 as of last month, with the brand close to reaching its goal of delivering 70,000 cars this year.

• Geely is looking to spin off Zeekr for an initial public offering, through which Volvo’s parent company expects to fund its plans to introduce six Zeekr-branded models within five years.

Seres: Huawei‘s manufacturing partner delivered 12,018 Aito-branded EVs last month, a 461% jump from a year earlier. October was also the third straight month that it has delivered over 10,000 units in a single month since the delivery of its first production car began in March.

Xpeng: Deliveries of the eight-year-old EV maker more than halved year-on-year to just 5,101 vehicles last month. Vehicle deliveries totaled 103,654 units from January to October, far from the company’s unofficial 2022 guidance of 250,000 vehicles set early this year.

• A total of 623 G9 crossovers were handed over to consumers last month after delivery began on Oct. 27. The company expects monthly deliveries of its second sports utility vehicle to surpass the threshold of 10,000 units next year after production ramp-up.
• The company’s second sedan model, the P5, which the company expected to be a hit in the mainstream segment with a starting price of RMB 157,900 ($21,707), has underperformed with deliveries of around 33,700 units as of October this year.

Nio and Li Auto: The two other EV upstarts each reported October deliveries of more than 10,000 units, slightly lower than the previous month. Yet both have enjoyed a solid performance despite ongoing supply chain issues amid the post-pandemic rebound.

• Nio’s premium sedan ET7 is the company’s most in-demand model on sale, recording deliveries of 3,050 units. At the same time, the company only handed over 1,030 units of the ET5, its second sedan model, as production is still ramping up.
• The automaker was also forced to cut production at its facilities in the eastern city of Hefei in mid-October due to Covid restrictions, Chinese media outlet 36Kr reported Tuesday, citing people familiar with the matter.

Hozon and Leapmotor: With three entry-level cars on sale, Zhejiang-based Hozon managed to exceed deliveries of 18,016 units in October, representing a 122% year-on-year rise, while Leapmotor deliveries dropped by more than a third to 7,026 units.

BYD and Chinese state-owned carmaker GAC reported strong growth in revenue and profits in the third quarter, further expanding their lead among Chinese peers. Other Chinese automakers — state-owned SAIC, and Huawei partners Seres and Changan — have reported mixed results with slowing growth or stagnated earnings. Rising material costs and intense competition are among the factors contributing to the companies’ woes.

Why it matters: BYD reported significantly stronger profitability than its peers with a gross margin of 22.75% in the third quarter, followed by Changan’s 17.4%, SAIC’s 9.6%, and GAC’s 4.6%, while Huawei-backed Seres is still losing money.

• BYD and GAC are showing their advantages as their EV models consistently top sales chart. Other automakers’ disappointing third-quarter results came against the backdrop of soaring lithium prices, an ongoing price war between major automakers, and the looming phase-out of EV purchase subsidies by the government by year-end. Experts anticipate that many automakers will reduce prices in exchange for market share, which could further impact their profitability in the short term.
• The spot prices of lithium carbonate in China exceeded the RMB 500,000 ($68,776) threshold on Sept. 13, a nearly 80% increase from the beginning of this year, according to figures from the metal research institute Shanghai Metals Market.

BYD: The Shenzhen-based manufacturer reached an average of around RMB 10,000 profit per unit sold from July to September, a significant increase from RMB 6,400 in the previous quarter, according to estimates from Jefferies Financial Group. Net profits reached RMB 5.7 billion, a gain of 350% from the same quarter in 2021.

• Analysts listed both an increase in average selling price and better economy of scale as contributing factors. Yet, BYD’s profitability is still much weaker than rival Tesla’s, which made $3.3 billion in net income in the same quarter.
• Shares of BYD jumped 6% in Hong Kong on Monday after the EV giant on Friday posted sales of RMB 117 billion ($16.1 billion) for the third quarter, up 116% from the same period in the previous year. 

GAC: State-owned GAC also reported strong third-quarter results, with revenue up 51.6% year-on-year to RMB 31.5 billion and profit growth of 144%. Toyota’s Chinese partner is aiming for a delivery target of 250,000 Aion-branded EVs this year and has sold around 182,000 units as of September.  

SAIC: On the opposite end of the spectrum was SAIC, which has seen its stock price fall 30% since 2022. Sales from China’s biggest automaker grew 12.9% year-on-year to RMB 205.2 billion in the third quarter, but profit fell 18.4% annually to RMB 5.74 billion.

• The results also revealed that SAIC’s manufacturing partner Volkswagen is under big pressure as it struggles to catch up with pure-player EV makers. The German automaker saw the overall market share of its venture SAIC-VW slide to 5.8% from 8.2% two years ago.

Huawei partners: Results from Huawei’s EV partners were also less impressive. Seres saw losses widen 57.3% from a year earlier in the third quarter to RMB 947 million, partly due to rising costs of raw materials, having recorded a sharp growth in sales of its Aito-branded EVs.

• Changan’s revenue rose 28.4% but profits fell 17.5% in the quarter. Avatr, the automaker’s EV subsidiary, will begin selling vehicles via Huawei’s retail stores as early as December, China Securities Journal reported Friday, citing a company spokesperson.

Context: Early this year, more than a dozen Chinese automakers raised EV prices to offset the rising cost of electronic components and battery materials used in vehicles. However, Tesla went the other way by slashing as much as 9% of its car prices last week, with Huawei-backed Seres quickly following suit. Analysts from China Merchants Bank International expected general car sales to slow into 2023 in China, while EV makers are also facing growing competition given a challenging macro environment, according to an Oct. 24 report by Reuters.

BYD, China’s biggest producer of electric vehicles and the world’s third biggest batteries supplier, is making a series of aggressive moves to carve out a slice of the global auto market led by European and American giants.

BYD is systematically entering the passenger EV markets of Southeast Asia and Western Europe, facing stiff competition from well-established local majors as well as younger rivals such as Tesla and Nio.

Experts say that Chinese carmakers have an edge due to their head start in EV technology and have enjoyed the advantage of a fully developed EV supply chain from battery cells to control units. Thus, the ongoing global shortage of critical components allows them to ensure relatively stable production and hand over vehicles to customers more quickly than many of their global competitors.

The Shenzhen-based firm is undoubtedly the poster child for China’s shift towards EVs. In April, it became the world’s first automaker to end the production of gasoline-powered cars. The Warren Buffett-backed company sold nearly 201,300 EVs in September, of which 7,736 passenger cars were exported. Consultant LMC Automotive estimates BYD’s annual sales could reach 1.9 million units in 2022, including 18,000 units from overseas operations. McKinsey & Co expects at least one Chinese carmaker to reach annual sales of up to 5 million vehicles by 2030, with more than a third of that figure coming from overseas markets.

Here are some notable moves made by the automaker as it expands overseas.

Europe

BYD announced big plans for the European region in September, with an initial goal of cracking the passenger EV market of nine European countries by the end of the year. Besides forging alliances with established car retailers, the automaker will supply an additional group of 100,000 EVs to German-based car rental giant SIXT over the next six years as it expands its presence into all major markets on the continent.

Norway

BYD made its first major attempt as a passenger carmaker in Europe back in July 2020 by showcasing several of its Tang electric sports utility vehicles with dealership partner RSA at an event in Oslo.

However, it was not until last August that the Chinese automaker officially started its expansion into the region by delivering the first batch to Norwegian customers, quickly followed by the celebration of handing over its 1,000th vehicle in December.

With a starting price of 599,900 Norwegian kroner ($56,670) and a maximum driving range of 528 kilometers (328 miles), the seven-seater luxury SUV is by far the top-selling vehicle model by Chinese carmakers in Norway. A total of 2,526 Tang SUVs have been registered in the country as of Oct. 19, compared with 1,251 SAIC MG Marvel Rs, 980 Nio ES8s, and 812 Xpeng Motor G3s, according to data provider Elbilstatistikk.no.

Rest of Western Europe

BYD began its push into the European passenger car market in September, announcing plans that its three popular EV models – Tang, Han, and the Atto 3 – will be available in eight other European countries in addition to Norway, by year-end. Those countries are Sweden, Denmark, the Netherlands, Belgium, Luxembourg, Germany, France, and the UK. The introduction of its Seal sedan and Dolphin hatchback is also reportedly in the pipeline.

BYD’s Tang crossover and its premium Han sedan will cost 72,000 euros ($69,740), while the Atto 3, a compact five-seater SUV, will target a more mainstream segment with a pre-sale price of 38,000 euros. Delivery of the first batch was celebrated during this year’s Paris Motor Show, and the company has partnered with three European car retailers to expand in the region, the Automotive News reported on Oct.17. 

Asia-Pacific

BYD’s EV strategy for Asia is very different from its strategy for Europe. In the latter, it tried to pursue luxury status among relatively affluent buyers by launching top-end models. However, in the Asia region, the Chinese EV maker is offering more affordable options in a crowded market dominated by Japanese and Korean rivals. As a result, competition could get even more intense as BYD pursues this market.

Australia and New Zealand

Despite having sold its E6 electric taxis for at least two years in Australia, BYD made a big step into the country’s market with the launch of its Atto 3 in February and quickly expanded its reach to New Zealand five months later. The car has been selling in 12 showrooms across seven states in Australia in a partnership with EVDirect, a regional distributor for BYD.

Japan

Aware that Japan is moving slowly amid the global transition towards EVs, BYD is forging into the prominent market with a group of hit products, including its sports sedan Seal, hatchback Dolphin, and the Atto 3.

BYD Japan executive officer Atsuki Tofukuji said that all three models are priced between 3 million yen and 6 million yen ($20,028 – $40,058). The first deliveries of the Atto 3 are scheduled for early next year, and the company is targeting no earlier than the middle of 2023 for the other two models.

The Chinese carmaker has no near-term plan to start a manufacturing plant in the country but aims to set up 100 showrooms with partners in the next three years. Its electric buses have entered into service in several Japanese cities including Tokyo and Kyoto over the past few years and the company hopes its accumulative sales will surpass 4,000 units around 2028.

Thailand

Thailand is a strategically important market for BYD, where the Chinese automaker will establish its first fully-owned factory for passenger cars outside of China, hoping to not only meet local demand but also satisfy the needs of Southeast Asia in general.

The $491 million facility is scheduled to become operational in Rayong, Thailand, in 2024, with a production capacity of 150,000 vehicles annually. The automaker announced earlier this month that it would bring its Atto 3 to Thailand with local retailer RÊVER, which will build more than 30 dealership stores by year-end for its Chinese partner and more than triple that number next year. Vehicle launch happened on Oct. 10, and the company has not revealed expected time of delivery.

India

Positioned to surpass Japan as the world’s third-biggest economy in 2025, India holds great potential for BYD’s cars. Earlier this month, the company announced a goal of selling at least 15,000 Atto 3 SUVs in the country next year and taking around a 40% market share by 2030.

Since it started making buses with a local partner in 2013, the Chinese automaker has invested over $200 million in the world’s fourth-biggest car market, running a manufacturing plant with a partner with an annual production capacity of 15,000 vehicles. However, no investment plan has been set in the near term amid increased scrutiny by Indian regulators toward Chinese investments.

Correction: An earlier version of this article incorrectly cited BYD’s dealership numbers in Australia and Thailand. The story was updated on Oct. 21 to include BYD’s comments on the launch of its Atto 3 in Thailand.

China’s electric vehicle market continued to trend upwards in September, with year-to-date sales already surpassing last year’s total of 3 million, according to the latest figures compiled by the China Passenger Car Association (CPCA). However, the growth rate of overall car sales in China hit its lowest point in the last two decades owing to an economic slowdown, the industry group said.

Why it matters: The industry-wide sales figures released Tuesday further indicate a broader recognition among Chinese consumers of locally-made EVs, as well as a rising trend of Chinese automakers growing their international business.

• Retail sales of new energy passenger vehicles, mostly all-electrics and plug-in hybrids, soared by 82.9% in a year to around 611,000 units in September, bringing the total sales number for this year to nearly 3.9 million units as of last month, according to CPCA.
• Meanwhile, the overall industry reported a monthly growth of only 2.8% in new passenger car sales in September, reaching its lowest level since 2002, as the pandemic hit some of the most populous provinces, such as Sichuan, weakening demand.

Details: Last month, domestic auto majors, such as BYD and Geely, enjoyed a 67% share collectively in the passenger car market, up 9.2% from a year earlier, while those numbers for both younger EV startups and Tesla declined to 14.6% and 12.7%, respectively. The share of the market for traditional overseas carmakers further narrowed by 3.3% from a year ago to only 5.7%, CPCA figures showed.

• BYD ranked top with an annual growth of 144.3% to reach more than 191,000 EVs last month, taking nearly 10% of China’s auto market. It was followed by FAW-Volkswagen and SAIC-Volkswagen (two joint ventures of the German carmaker) at 165,000 and 122,000 automobiles, respectively.
• Geely reported its September retail sales of passenger cars increased by 24.4%  from last year to around 109,000 units, followed by Changan at roughly 107,000 units. Zeekr, a premium EV unit of Volvo’s parent company, delivered 8,276 vehicles last month, up from 7,166 units a month earlier. Changan is set to begin delivery of its first car model under the Avatr marque with partner Huawei in December.
• Meanwhile, Tesla China achieved a new record by selling 83,135 vehicles, of which 5,522 were overseas exports, bringing the year-to-date number to 483,074. The US automaker has an annual capacity of over 750,000 vehicles at its Shanghai facility, according to its second-quarter financial report.
• Chinese EV startup Li Auto delivered 11,531 plug-in hybrid crossovers last month as production of its second model, the L9, began to ramp up. Nio recorded a monthly delivery of 10,878 vehicles, with its new crossover ES7 making it to customers since late August.
• However, the numbers for Xpeng Motors declined 18.7% year-on-year and 11.6% month-on-month to 8,468 units, as the EV maker faces stiff competition from bigger names such as BYD in the mainstream EV segment. The company also reduced the prices of its first premium crossover, the G9, just two days after launch.

Context: The CPCA has maintained its sales projection of 6.5 million new energy vehicles (NEV) this year, with EVs expected to make up 28% of the country’s new car sales. The central government previously set a sales target of 25% of all new car sales to be NEVs by 2025.

• Nearly 14.9 million passenger cars, including internal combustion engine vehicles and EVs, were handed over to customers from January to September, a bit higher than the 14.5 million units during the same period of last year.
• Speaking to reporters on Tuesday, Cui Dongshu, secretary general of the CPCA, said he expected China’s general car market to recover with “explosive growth” over the last two months of this year, buoyed by easing Covid restrictions and tax breaks for vehicle purchases.

BYD has begun building a new portion of an electric vehicle manufacturing facility to build car components in Shenzhen, as China’s top-selling electric vehicle maker gears up to meet growing demand.

Why it matters: This is the latest example of BYD aggressively expanding key components on the supply chain, such as batteries and chips, at a time when many of its rivals are struggling with industry-wide shortages.

Details: BYD said that construction of the RMB 20 billion ($2.87 billion) industrial park has started at the Shen-Shan Special Cooperation Zone on the city’s east side after receiving official approval, according to a report by the regional broadcaster Shenzhen Satellite TV on Wednesday.

• The facility will produce “critical components” for 600,000 electric cars per year on an area of 3.79 million square meters (40.8 million square feet), the report said. Mass production is scheduled to kick off in July 2023, and the firm expects to achieve an annual production value of more than RMB 100 billion.
• This is the Phase 2 portion of BYD’s manufacturing facility. Construction of Phase 1 in the industrial park has continued rapidly, with the main buildings now almost complete, suggesting that part of the facility will soon be operational, according to a July 29 report by the Shenzhen Economic Daily (in Chinese).
• In August 2021, the carmaker revealed plans to spend RMB 5 billion to build a 1.71 million square meter industrial facility producing car parts, such as clutches and wire harnesses, and later showed interest in more space. Additional investments were announced in January.

Context: BYD has been working with local Chinese governments to establish multiple new manufacturing facilities to ensure the in-house supply of crucial parts, including batteries and chips for its EVs, as part of the major player’s plan to more than double its sales this year.

• On Sept. 10, the company announced that it had begun constructing a 15 gigawatt-hours (GWh) battery pack factory in the southern city of Nanning, Nanning Evening News reported (in Chinese). Another chip plant will begin production next month in the central city of Changsha.
• The Warren Buffett-backed EV giant currently has a total production capacity of between 1.5 and 2 million vehicles annually, according to estimates by Bloomberg Intelligence analysts. It currently runs or is establishing nine vehicle production sites in major Chinese cities, including Shenzhen, Changsha, and Xi’an, in the northwestern Shaanxi province.

BYD on Monday reported better-than-expected profits for the first half of 2022, buoyed by strong demand for its electric vehicles and a stable supply of much-needed car components when many peers are struggling with the economic slowdown and persistent supply-chain challenges. 

Despite these rosy figures, the auto major saw its stock price slide after Warren Buffett’s Berkshire Hathaway reduced its stake in the company.

Why it matters: Analysts have pushed for significantly higher stock prices, given BYD’s all-around strength in the EV operations and battery business.

• Credit Suisse analyst Wang Bin on Tuesday retained his bullish thesis on BYD’s stock and raised the price target to HK$400 ($60) from HK$380, anticipating that sales in the third quarter could reach 480,000 vehicles with profits hitting a new record-breaking figure of RMB 5 billion.
• Meanwhile, Chinese car expert Zhang Xiang said in a virtual conference that he sees  BYD as a “Huawei of autos” in the making, pointing to its diversified business model that covers consumer products, components, and various technologies.

Details: On Monday, BYD reported a record half-year profit of RMB 3.6 billion ($521 million), hitting the upper end of its forecasts released in July of between RMB 2.8 billion and RMB 3.6 billion, as well as surpassing last year’s total of RMB 3.04 billion.

• Despite this, revenue in the six months ending in June missed estimates of RMB 166 billion, hitting RMB 150.6 billion instead, still up 65.7% over last year, according to figures compiled by Bloomberg.
• The earnings were driven by success in BYD’s EV manufacturing and car-related businesses, which account for more than 72% of its total revenue. Revenue grew 130% to RMB 109.3 billion from a year earlier.
• With its in-house supply of batteries and some of the microchips required for its vehicles, the Shenzhen automaker has been able to maintain production with relatively little disruption at a time when many of its competitors have been hit by multiple problems, including Covid restrictions and supply constraints, Zhang added.
• Meanwhile, the automaker said its dual strategy of betting on both all-electrics and plug-in hybrids had offered consumers a vast selection, boosting sales and profitability.
• BYD has identified a general concern among Chinese buyers about the lack of wide EVs charging infrastructure and then addressed their needs with mature plug-in hybrid technologies, Zhang told reporters during an online conference on Tuesday.
• A wide portfolio of vehicles also allows BYD to target different consumer segments. For example, its DM-i series is designed to provide reliable and energy-efficient transportation to the working class, while its DM-p series targets the wealthier middle class with better performance, according to Zhang.
• BYD stock nevertheless ended down 0.86% to HK$310.85 on Tuesday, before slumping 7.1% during Hong Kong morning trading on Wednesday. The sell-off came after Warren Buffett’s Berkshire Hathaway trimmed its holdings in BYD’s Hong Kong-listed shares from 20.49% to 19.92%, selling a near $47 million stake in the carmaker, Reuters reported on Tuesday.

Context: BYD’s market share in the Chinese EV market reached 24.7% for the first six months of this year, representing an increase of 7.5 percentage points from last year, thanks to strong delivery numbers.

• The auto giant sold the equivalent of 24 gigawatt-hours (GWh) of batteries from January to June, taking an 11.8% share of the global EV battery market, according to figures compiled by SNE Research.
• Some of its rivals are starting to catch up by deploying similar strategies. GAC and Nio plan to bring some battery manufacturing in-house, while both Xpeng Motors and Li Auto have promised to launch two new vehicle models in 2023 targeting different consumer segments.

CATL and BYD are facing the prospect of cutting electric vehicle battery production after authorities in China’s southwestern province of Sichuan extended the power cuts from six days to 11 days, local media reported.

Why it matters: The extended duration of electricity outages has forced multiple Chinese auto firms to idle production for a week and sparked concerns about worsening supply-chain disruptions to the industry following the country’s strict Covid-19 control measures.

Battery production taking a hit: On Aug.20, Sichuan province extended its six-day power cuts by five days and ordered all factories to remain shuttered until this Thursday, according to a notice issued by the provincial government and obtained by financial media outlet Yicai.

• Tesla’s supplier CATL has a production facility in Yibin, Sichuan, which currently produces 30 gigawatt-hours (GWh) of batteries annually. The city still faces an electricity supply crunch with no likelihood of local factories resuming operations in the coming days, Chinese media outlet Caixin reported on Aug. 21, citing people with knowledge of the matter.
• Manufacturers from several districts in the neighboring Chongqing municipality, where BYD has a battery plant with an annual production capacity of 35 GWh, are being forced to slow assembly lines or completely halt production on the back of extended power cuts. The Chinese auto major develops and builds batteries mainly for its vehicles at the facility.
• BYD has turned to Shaanxi authorities for help, after the latter sent a letter to their Chongqing counterparts last Thursday requesting Sichuan to prioritize electricity supply for the battery maker’s local facilities, the Caixin report said. The Shenzhen-based automaker has a regional headquarters in Shaanxi.

LCD production also taking a hit: Sichuan’s expansion of power cuts will also lead to a 20% decrease in large-sized LCD production for TVs worldwide, Li Yaqin, an analyst from Sigmaintell, told Yicai. 

• Li said that the extended 11-day power cut has had a notable impact on this industry. Production is estimated to decrease by 45,000 LCD base plates, based on production lines at BOE and BHK both being affected. 
• Production of widely used LCD screens will take a larger hit than OLED, which is mainly used in smartphones. As Chongqing, a municipality next to Sichuan, follows suit by limiting power supply, conditions for the industry are expected to worsen due to BHK’s LCD production line. According to Li, that 20% estimate may even be conservative. However, the analyst also highlighted the positive side of this issue, saying that the power cuts would help to clear factories’ inventory and stabilize prices.

Context: Sichuan’s weeks-long power restrictions have had a spill-over impact on the Chinese auto industry, with Tesla and Volkswagen’s partner SAIC having difficulties getting enough supply from local parts makers. Sichuan-based automakers Changan and Seres have also idled production facilities since Aug. 15.

Ward Zhou contributed to the reporting of this story.

BYD has started supplying electric vehicle batteries to Tesla’s factory in Germany, Chinese media outlet Sina Tech reported on Wednesday.

Why it matters: This is the latest development in the partnership between Tesla and BYD, two of the world’s biggest EV makers. It comes two months after a BYD executive confirmed to state broadcaster CGTN that the Chinese manufacturer would supply batteries to Tesla “very soon.”

Details: For the first time, BYD begins supplying its “blade battery” to Tesla’s gigafactory in Berlin, with the first batch of Model Y vehicles with BYD batteries expected to roll off assembly lines by early September, Sina Tech reported, citing people familiar with the matter.

• It is unknown whether Tesla plans to equip its EVs with BYD batteries at its Shanghai facility, the sources said. Tesla and BYD did not respond to TechNode’s request for comment.
• BYD’s blade battery comes with a lithium-ion phosphate (LFP) makeup and boasts better thermal stability and stronger resistance to collisions than lithium-ion batteries that use cobalt or nickel and which enable longer range but at a higher cost.

Context: A growing number of Chinese automakers are preferring LFP battery chemistry to traditional cobalt- and nickel-based batteries due to lower costs, better safety, and improving energy density, a trend analysts expect to accelerate globally.

• During an online media briefing on Wednesday, UBS analyst Paul Gong said that the Swiss investment bank expects LFP batteries to capture more than 40% of the global EV battery market by 2030, an increase from its previous estimate of 25%.
• The blade battery cells cost $136 per kilowatt-hour (kWh), at the same level as that of Panasonic’s lithium-ion cells with nickel-cobalt-aluminum (NCA) cathode chemistry and lower than the $142 kWh of the cobalt-based batteries sourced from LG Energy Solution, according to Gong.
• However, CATL’s LFP battery cells for Tesla’s Model 3 are currently more competitive cost-wise than its rivals’ offerings at $131 per kWh, Gong added, as per the recent teardown results of CATL and BYD battery packs presented by UBS.
• Tesla has been sourcing nickel-manganese-cobalt (NMC) batteries from CATL for its China-made vehicles to date, while Panasonic and LG Energy Solution are major battery suppliers to Tesla globally.
• BYD sold the equivalent of 7.9 gigawatt-hours (GWh) of batteries in the first half of this year, surging 206% year-on-year and taking an 11.8% share of the global EV battery market, according to figures compiled by the South Korean industry tracker SNE Research. CATL is the dominant player with a 34.8% market share, followed by LG’s 14.4%.

Chinese automaker BYD and other manufacturers are asking workers in Shenzhen facilities to work and live in the workplace until the end of this month, as the southern Chinese city sees new outbreaks of the omicron variant, local media reported. Chinese companies often keep employees in the so-called closed-loop system so they can produce even in cases of regional lockdowns. 

Why it matters: It remains to be seen whether the latest wave of the Covid-19 pandemic will again strain automakers in China, but this news shows the continued impact of Covid control measures on auto supply chains.

Details: BYD is one of the dozens of companies operating its Shenzhen factories under a closed-loop system that requires employees not to leave the plants for one week starting on July 24, financial media outlet Yicai reported on Monday (in Chinese).

• Workers are confined in their workplace and must take one nucleic acid test daily. A BYD spokesperson told Chinese media Yicai on Tuesday that production is unaffected by the current outbreak.
• BYD produces two popular electric vehicle models in Shenzhen, the Han sedan and Tang crossover, with a monthly capacity of around 30,000 vehicles. The car giant also has manufacturing sites in multiple cities, such as Changsha and Hefei, and projects its annual capacity to be more than 3 million vehicles this year.

Context: Other large tech companies in Shenzhen are doing the “closed-loop” system, including Huawei, ZTE, and drone maker DJI. Foxconn, a manufacturing partner of brands like Apple and Samsung, said that its Shenzhen facilities are under “normal” operation, Reuters reported on Tuesday.

• BYD’s Shenzhen plants also stayed in a closed loop system for about a week in March, when China’s technology hub went into a two-week lockdown to contain the spread of Covid-19 infection. Shenzhen recorded 21 new Covid infections on July 24, including 13 asymptomatic cases.

Chinese automaker BYD reported an estimated profit between RMB 2.8 billion to RMB 3.6 billion ($410 million to $530 million) in the first half of 2022 on Thursday, with the potential to beat last year’s total profit of RMB 3.04 billion. The results pushed the company’s share prices up 3.89% on the Hong Kong stock exchange on Friday.

Why it matters: The performance of BYD contrasted sharply with many other traditional Chinese automakers, which reported significant drops in profit, reflecting BYD’s ability to navigate the ongoing supply-chain challenges and an economic downturn. 

Details: BYD’s estimated figures of net profit in the first half more than doubled from last year’s RMB 1.17 billion. The company attributed these numbers to strong electric vehicle sales, according to a Thursday statement (in Chinese).

• The estimate suggests that the company could post a better-than-expected profit of at least RMB 1.99 billion for the second quarter of this year, analysts at Goldman Sachs said in a note, as the investment bank maintained BYD on its Conviction Buy list, Chinese media outlet Sina Finance reported Friday.
• Basic earnings per share would be between RMB 0.96 to RMB1.24, compared with RMB 0.41 for the same period last year. BYD may further improve its margins in the near future as raw material prices decline from recent highs, state-owned media agency Yicai reported Friday, citing a company representative.
• On Thursday, BYD peers JAC Group and BluePark New Energy Technology, BAIC’s electric unit, expected net losses of the first half to be around RMB 700 million and at least RMB 1.8 billion, respectively. The automakers blamed these lackluster numbers on Covid lockdowns, auto chip shortages, and surging battery prices.
• Huawei’s manufacturing partner Chongqing Sokon Industry Group posted an estimated loss of between RMB 1.6 to RMB1.76 billion for the first six months of this year, compared with RMB 481 million for the same period in 2021, as the company ramps up its EV development efforts.

Context: This rally by Shenzhen-based BYD put its market value at about $133.2 billion on Friday, maintaining its position as the world‘s third-biggest automaker during the month, although some analysts now view it as greatly overvalued.

• BYD’s market valuation is over-optimistic, GF Securities analysts wrote in a July 7 report, adding that the company’s in-house supply chain could lower its operational efficiency while ensuring the supply of key components.
• The brokerage also worries about the future profitability of BYD’s EV battery business, as its efforts to challenge CATL could lower its prices to gain market share, financial media outlet Caixin reported (in Chinese).
• The Warren Buffett-backed automaker posted a record sales volume of 641,350 EVs for the first half of 2022. It also sold the equivalent of 19 gigawatt-hours (GWh) of batteries as of May this year, closely following second-placed LG Energy Solution but falling far behind first-placed CATL, according to figures from Seoul-based SNE Research.

China’s electric vehicle industry has experienced a strong recovery in June, recording over 140% growth in passenger EV sales amid the ongoing impact of the Covid-19 pandemic and supply chain challenges, data from the China Passenger Car Association (CPCA) showed on Friday.

Why it matters: The growth was driven mainly by a strong comeback from BYD, Tesla, and other Chinese auto brands like Nio and Li Auto, after Shanghai and other cities lifted pandemic-related lockdowns, showing the impressive resilience of the Chinese EV space.

Details: The CPCA said on Friday that the wholesale volume of passenger EVs in China hit a record monthly high in June with a total sales of 571,000 vehicles, a whopping yearly 141.4% increase. In June, passenger car sales, including combustion engine cars and EVs, increased by 22.6% from last year to 1.94 million units.

• The boost in sales comes as China rolls out hefty stimulus measures, which include additional subsidies and tax cuts, Cui Dongshu, CPCA secretary-general, told reporters during an online conference on Friday. 
• Tesla’s Shanghai Gigafactory came back “with a vengeance” after a 22-day stoppage in April due to Shanghai’s lockdown, chief executive Elon Musk previously told investors, with shipments surging 145% month-on-month and 135% from a year ago to 78,906 vehicles.
• BYD has maintained its top place with almost 25% of the market share, with sales in June hitting 134,036 units, tripling 2021 levels. Meanwhile, EV sales from domestic auto majors Geely and GAC’s EV unit Aion rose by 393% and 182% to 29,671 and 24,109 units, respectively.
• Young EV makers Nio, Xpeng Motors, and Li Auto are also getting back to previous levels by ramping up production and working closely with suppliers, while Sokon, a manufacturing partner of Chinese tech giant Huawei, delivered 7,658 Seres-branded EVs last month, a 41% monthly growth.

Context: Forecasts for the Chinese EV market have remained bullish. Morgan Stanley raised its outlook for this year’s EV sales by 24% to 5.7 million vehicles in a research note on Li Auto on Friday, Chinese media outlet Sina Finance reported.

• CPCA expects China’s EV sales to edge up 84% to 5.5 million units this year, while consulting firm AlixPartners forecasts that number to be 5.1 million, with Chinese-brand vehicles retaining an enormous share of the market.

Chinese automakers have moved quickly in the first five months of 2022, securing a lion’s share of the country’s electric vehicle market. The country’s EV makers are likely to keep that momentum going for the rest of the year, according to management consultant firm AlixPartners.

Domestic auto brands have extended their lead over their foreign rivals in the EV segment this year, making up 85% of all new EV sales in the first five months of 2022, up from 80% in 2021 and 74% in 2020, official figures show. This number may remain unchanged by the end of the year as Chinese brands continue to launch more new EV models than their foreign counterparts, Stephen Dyer, co-leader of AlixPartners’ Greater China business, told TechNode on Thursday.

However, as more traditional global automakers prepare to launch new EVs in the next few years, this share will likely go down due to the increased availability of foreign EVs, Dyer said, predicting an increasingly competitive environment for less experienced automakers.

China’s growing EV industry is holding up better than that for combustion engine vehicles and will likely maintain an upward trend in the coming months, despite Covid-19-related lockdown measures and supply chain constraints. AlixPartners projects that there will have been 5.1 million EV sales in China by the of the year, representing a 45% increase year-on-year and accounting for 22% of total new car sales.

With that said, overall auto sales may fall by 11% year-on-year to 23.4 million units in 2022, as stringent Covid control measures disrupt offline sales, the firm said during an online briefing on Thursday. Meanwhile, supply chain issues will continue to be a headwind for Chinese automakers until 2024, when chip supply issues will largely be resolved, allowing China’s auto sales to return to normal growth rates, according to Dyer.

Chinese EV makers have been moving upmarket and squeezing most international competitors out of their home market. Major Chinese automaker BYD’s EV sales more than tripled to 507,314 units as of May this year, driving its market cap to nearly $130 billion and making it the third-largest automaker in the world in early June.

SAIC-GM-Wuling, a joint venture between General Motors, SAIC, and Wuling Motors, is by far the country’s second-biggest EV maker, with sales of 164,552 vehicles over the same period, mostly thanks to its affordable Hongguang Mini EVs. US-listed EV makers Li Auto and Nio last month launched their new electric crossovers with price tags starting from RMB 459,800 ($68,418) and RMB 468,000 respectively, aiming to take on luxury carmakers such as BMW and Mercedes-Benz.

Tesla and Volkswagen are the only two global automakers with a major presence in the Chinese EV race, selling around 172,000 and 54,000 vehicles respectively to local customers from January until May. In November, Volkswagen moved to replace its China head Stephan Wöellenstein, in part due to lower-than-expected EV sales, according to a Reuters report. The German automaker announced on June 17 that it has set up a regional China board with a new leadership team that includes Marcus Hafkemeyer, a former adviser at Huawei, as technology chief.

BYD on Tuesday unseated Volkswagen and became the world’s third-biggest automaker by market capitalization. The milestone came at the same time when the Chinese automaker also announced plans to supply batteries to Tesla.

Why it matters: This is an unprecedented high for BYD, reflecting investors’ excitement around the Chinese automaker’s potential to be a dominant force as the auto industry makes the transition to EVs.

Details: BYD’s market capitalization as of Tuesday was $128.8 billion, as shares in the Shenzhen-listed automaker rose 6.4% to hit an intraday high of RMB 320.47 ($48) on Monday, according to market valuation data.

• BYD took over the third spot from Volkswagen (market cap of $117.5 billion). BYD’s market cap is only a little over half of Toyota, the second place with $228.4 billion. Tesla ranks first with a market cap of $742.5 billion.
• China’s second-biggest battery maker will also begin supplying batteries to Tesla “very soon,” BYD’s executive vice president Liang Yubo said in an interview with CGTN released on Wednesday, without offering further details.
• This confirms previous reports that BYD’s lithium-ion phosphate batteries, also known as blade batteries, have already been tested in Tesla’s locally-made vehicles in the Chinese market.

Context: BYD is among the biggest winners in China’s decade-long push into green energy vehicles and has maintained strong momentum despite coronavirus outbreaks and lockdowns. The company made sales of 507,314 vehicles for the first five months of 2022, up 348% compared with a year earlier.

• The Warren Buffett-backed automaker also had a market share of 11.1% in the global EV battery market from January to March, following CATL and LG Energy Solution at 34.4% and 15.9%, respectively, Bloomberg reported, citing figures from SNE Research.
• Tesla’s deal with BYD could scale back the US automaker’s reliance on its current suppliers CATL and LG Energy Solution. CATL shares declined as much as 6.9% intraday following the news but closed up 0.22% on Wednesday.
• Chinese automakers Great Wall Motors and Nio were also high on the list of most valuable vehicle companies, ranking eleventh and thirteenth, with a market cap of $39.3 billion and $32.8 billion, respectively.

Nio is building a new battery research and development center near its headquarters in Shanghai, intending to develop and use new types of battery cells in its electric vehicles (EVs), a Shanghai government filing showed on Monday.

Why it matters: Nio’s move is part of a growing trend among automakers attempting to develop their own batteries to secure an advantage in China’s fast-growing EV segment, which has been hit by supply chain bottlenecks in recent months.

Details: The facility will be approximately 22,090 square meters (roughly 237,775 square feet), and located in the city’s northwestern Jiading district. It will involve an investment of around RMB 219 million ($32.8 million), according to a filing (in Chinese) by the environmental assessment firm conducting a feasibility study for the project.

• The new facility will encompass 31 laboratories, one trial production line for lithium-ion battery cells, and one assembly line for battery packs made from lithium-ion cells, which could pave the way for Nio to make new batteries with improved performance capability and better safety measures at scale, the filing said.
• Slated for construction as early as August this year, the center will operate 250 days per year and employ about 400 staff, the EV maker said in the filing, but it did not reveal when the facility will start operations.
• Nio did not respond to TechNode’s requests for comment.

Context: Nio has been sourcing cells manufactured by Chinese battery supplier CATL and assembling them into battery packs at one of its factories in the eastern city of Nanjing since mid-2019, in addition to undertaking in-house production of electric motors.

• Leapmotor, another local EV startup, revealed (in Chinese) its so-called “cell-to-chassis” technology last month, which skips the need for battery packs and integrates modules directly into the vehicle body. Typically, battery cells must first be fixed into a battery module when being added to an EV.
• Tesla has been producing battery packs with cells from its partner Panasonic at a factory in Nevada since 2016. Chinese EV giant BYD is currently the world’s third-biggest battery maker with a market share of 11.1% as of March 31, Bloomberg reported on May 2, citing figures from South Korean research firm SNE Research.

READ MORE: Nio, Xpeng, Li Auto see dismal April deliveries as coronavirus lockdowns disrupt production

China’s biggest electric vehicle maker BYD on Sunday announced it has started mass production of a newly designed lithium battery which boasts high energy performance and eliminates the risk of spontaneous combustion in EVs.

Why it matters: The new product may help BYD recover ground lost in the EV battery market to CATL, which has been the world’s biggest battery maker since 2017 in terms of kilowatt hours sold.

• EV makers in recent years have rushed out to buy nickel-cobalt-aluminum (NCA) batteries, which enable longer driving range with higher energy density, rather than those powered by lithium iron phosphate (LFP), one of BYD’s major products.
• However, safety remains an issue as EVs can catch fire or explode in the case of a thermal runaway event, which happens when the battery is overcharged and the heat is not dissipated. EV companies including Tesla and Nio reported repeated cases of car combustion or explosion last year.
• An unreasonable pursuit of energy density in the industry has made EV makers pay “an extremely high price” in reputation, according to Wang Chuanfu, BYD chairman and president. EVs with blade batteries, he added, will “never spontaneously ignite.”

Details: The mass production of a so-called “blade battery” has started, Warren Buffet-backed BYD said on Sunday, a product which boasts energy density of 332 watt-hours per liter, 50% better than a conventional LFP battery.

• The company boasted that the new battery cells have better thermal stability and stronger resistance to collisions. The product has passed nail penetration tests, a type of safety testing done to stimulate internal short-circuiting.
• “Today almost all vehicle brands that you may know are in discussion with us for future cooperation based on blade battery technology,” He Long, vice president of BYD said. The Shenzhen-based automaker last year formed partnership with Toyota and Daimler for EV development and battery supply.
• Still, the company is on track to equip its flagship sedan model, Han, with the new battery technology. The Han’s maximum driving range is 605 km (376 miles)—outpacing Nio’s ES8 and the Tesla Model 3—and is expected to go on sale in June. No other vehicle plans for the battery have been revealed.
• “Han’s range performance has surpassed a number of EV models equipped with NCA batteries,” (our translation) China-based equity firm Zheshang Securities said in a report published Sunday. Analysts said the flat structure could largely help cope with heat dissipation while improving vehicle range.

Context: China’s biggest EV maker and a major battery supplier, BYD trailed CATL in the EV battery market, reporting sales volume of 10.75 gigawatt hours (GWh) last year, just over a third of CATL’s, according to figures released by China Automotive Battery Innovation Alliance.

Chinese electric vehicle makers are in a strong position to take advantage as the mass adoption of new energy buses takes off worldwide, especially in Europe where half of all new models sold by 2030 will be electric, according to a research note from analysts at UBS.

Why it matters: Rapid growth in the European electric bus market provides a great chance for Chinese makers as they have already gained years of product development and commercial operation experience.

• Buses are still largely produced by hand, unlike sedans and trucks, and therefore Chinese companies can remain cost-competitive compared with European rivals, UBS said.
• Chinese firms also boast mature comprehensive industry chains integrating batteries, motors, and controls.

“For years, Chinese automakers have lagged behind in the development of traditional vehicles. However, we believe they have great advantages in the new era of electric vehicles,” (our translation)

UBS China Auto Analyst Shen Wei

Details: Europe posted electric bus sales of about 1,000 units last year, roughly 5% of total sales. UBS estimates the number will increase four-fold next year to make up one-fifth of the total.

• Annual new energy bus sales in Europe could hit 12,000 by 2030, according to UBS.

Context: Beijing adopted a plan to subsidize its EV industry in 2009 and started the nationwide deployment of electric buses in 2015 with the aim of turning the country into a global leader in new energy vehicles.

• The number of new energy buses used for public transit in China reached 350,000 units as of last year, making up around half of the country’s total in urban areas. UBS expects that percentage to rise to over 80% by 2020.
• Chinese EV giant BYD is by far the largest electric bus supplier to Europe, selling over 700 battery-electric buses. It has secured a 20% market share in the region since it entered in 2010.
• Yutong followed BYD into the market and the Zhengzhou-based firm delivered around 100 electric buses to the continent as of the end of last year.

Toyota announced Friday that it will work with BYD to jointly develop all-electric vehicles and onboard batteries following an announcement in June about a battery deal with the Chinese electric automaker.

Why it matters: Growth in domestic new energy vehicle (NEV) sales are ramping up, and global OEMs are looking to grab share in the world’s largest auto market. June NEV sales rose 80% year on year to 152,000 as the central government continues to promote mass adoption of electric vehicles to fight climate change.

• The National Development and Reform Commission, China’s top economic planner, said in a statement last month that municipal governments are prohibited from imposing limits on new energy vehicles in the form of license plate quotas. 

Details: Toyota and BYD will jointly develop battery electric vehicles (BEVs), including sedans and low-floor SUVs, as well as onboard batteries for the BEVs and other vehicles.

• The vehicles are expected to hit the China market under the Toyota brand name from 2020 to 2025.
• Toyota was the first company in the world to launch mass production of hybrid electrified vehicles in 1997, while BYD has been the top seller globally of all-electric vehicles since 2015.

Context: The deal is the latest in a series of recent partnerships between global automakers and Chinese OEMs as the Chinese EV industry accelerates.

• France’s Renault SA earlier last week said it was embarking on a second electric vehicle joint venture (JV) in China with a $145 million investment to form a JV with JMEV, an electric car unit of China’s Jiangling Motors Corporation Group (JMCG). It partnered with Dongfeng Motors in 2017 for EV development and manufacturing.
• Volkswagen expanded its presence in the electric-vehicle charging industry in collaboration with Chinese automakers FAW and JAC, and Star Charge, China’s third largest EV charging operator, to install fast-charging facilities at its 30,000 charging stations. The German automaker had launched a mobile app in 2017 which provided updated information charging station locations in Beijing, according to a Chinese media report.

All-electric double-decker buses delivered to London – Mass Transit

What happened: Chinese electric vehicle (EV) company BYD, which partnered with British manufacturer Alexander Dennis Limited (ADL) in the UK, delivered five double decker electric buses to London bus operator Metroline earlier this week of the total 37 purchased. The buses will serve Route 43 which runs nine miles from Friern Barnet to London Bridge. The fully electric, emission-free BYD ADL Enviro400EV bus model is assembled at ADL’s facility in Britain while the powered chassis is built at BYD’s plant in Hungary.

Why it’s important: The alliance between BYD and ADL began in July 2015 when the two companies inked its first deal worth £19 million ($24 million) to build London’s first zero emission fleet of 51 single deck buses, reported Sina Finance. BYD’s iron-phosphate battery technology enables the buses run all day on a single charge using cost-effective off-peak electricity, according to the company. Chinese automakers are stepping up moves into the global market as the domestic auto market shrinks. BYD recently opened its sixth electric bus plant outside China in Canada focusing on assembling buses for the country’s largest public transport operator. Great Wall Motor, reportedly set a goal at the beginning of the year to make its sub-brand Haval the world’s biggest SUV maker within the next five years.

北京计划分阶段将出租车替换为电动车 – Caixin

What happened: Beijing municipal government will replace all gas-powered taxis with electric cars over the next two years, Xu Heyi, chairman of BAIC Motor Corp, said on Tuesday. Speaking at the first World New Energy Vehicle Congress (WNEVC) in the southern Chinese city of Boao, Xu said that gas-powered taxi replacement is ongoing and the new vehicles are equipped with functions such as fast charging and exchangeable batteries. Last month, the city government released a two-year action plan, requiring local taxi operators to deploy a total of 20,000 new EVs over the next two years. BAIC will supply all the new vehicles.

Why it’s important: China is accelerating its pace to develop new energy vehicles as it take aim at the global EV auto race. Electric vehicles are a featured government sustainability initiative along with the tougher vehicle emission standards which took effect in the beginning of the year. Beijing is not the first Chinese city aggressively promoting new energy vehicles: Shenzhen replaced all gas-powered taxis with electric cars in December, and Shenzhen-based BYD was the sole supplier. China’s largest EV maker, BYD sells more than 60% of its pure electric cars for public transport.

BYD, China’s largest electric vehicle maker, will promote its focus on design to a strategic level following Tuesday’s opening of the company’s global design center in the southern city of Shenzhen, manned by an all-star team of industry veterans from Audi, Ferrari, and Mercedes-Benz.

“Technology is BYD’s hard strength, and design will become the soft strength of the company,” said Wang Chuanfu, president and chairman of the Warren Buffet-backed company, at the opening ceremony. BYD’s product strategies will shift from focusing on technology to also incorporating design, he said, adding that it not only sells cars to business clients, but also seeks a larger presence in the consumer-facing market as well.

The move comes months after BYD brought on-board two renowned designers from Ferrari and Mercedes-Benz. JuanMa López, former head of exterior design at Ferrari, joined as global exterior design director in December, while Michele Jauch-Paganetti, the former design center head at Mercedes-Benz, came in as chief interior design director earlier this year. Wolfgang Egger, previously chief of design at Audi, has been BYD’s head designer since late 2016.

BYD is ramping up efforts to snare customers from premium brands by evolving its utilitarian cars into more desirable models. The carmaker unveiled the E-SEED GT, the first joint effort from the new design team, at this year’s Auto Shanghai industry show in April. The futuristic design concept reflects the sleek lines of the Chinese dragon, and the company plans to feature more Chinese cultural symbols in future models.

The Chinese automobile market moved into a lower gear late last year and there are no signs of a catch-up so far in 2019. The country’s total sales of passenger vehicles slumped 17.4% year-on-year to 1.6 million in May, according to the latest figures from the China Association of Automobile Manufacturers (CAAM). May sales at top-tier domestic automakers SAIC and Chang’an fell 16.7% and 34.7%, respectively.

Chinese OEMs have also suffered flagging sales of EVs, reporting overall growth of just 1.8% last month, as the government scales back purchase subsidies to cool the overheated market. Sales at Chang’an and BAIC fell 53.5% and 49.2%, respectively, year on year in May in sharp contrast to BYD, which posted a rise of 53.8% to 21,899 units. However, BYD failed to halt sliding gasoline vehicle sales last month as they fell by almost half to 12,021.

BYD says it works with more than 200 designers around the world when coming up with models for local markets, including passenger cars, commercial vehicles, and urban railways. The company opened its first Canadian plant on Tuesday with an initial focus on bus assembly and has secured an order for 10 EV buses from Toronto Transit Commission, the country’s largest public transport agency, with an option for 30 more.

BYD, China’s largest producer of electric vehicles, says that recently announced cuts to government subsidies for new energy vehicles won’t impact the industry’s long-term growth.

In a filing to the Shenzhen Stock Exchange (SZSE) on Tuesday, the company said that the reductions will help shift the sector away from being policy driven to one driven by market conditions. BYD filed the disclosure after the company was asked by the SZSE to clarify issues in its 2018 annual report.

“Subsidies will have a short-term impact on demand and the profitability of new energy vehicle makers, but they will not alter the long-term growth trend of the new energy auto industry,” (our translation) the company said.

BYD added that it is difficult to predict the impact of the subsidy cuts on the company’s profits from new energy vehicles.

In March, the Chinese government announced changes to its subsidy structure, saying that automakers rely too heavily on government support to sell vehicles, thereby sacrificing innovation in the sector.

By mid-2019, the government will cut contributions by up to 50% for vehicles with a range of 400 kilometers or more. Meanwhile, those that can travel up to 250 kilometers will not be eligible for an allowance. The cuts mean that automakers will be forced to absorb the costs or pass them on to their customers, both of which could be potentially damaging for their businesses.

The government implemented the subsidy system in 2009 in order to spur growth in the industry. There are now nearly 500 registered new energy vehicle manufacturers in China, prompting concerns that a cull is on the horizon.

“The leading companies are expected to continue to increase market share and achieve faster growth,” BYD said.

The government has also implemented a “cap and trade” system, in which manufacturers producing more than 30,000 electric vehicles per year are required to earn credits equal to 10% of their output. Companies that don’t reach this can be fined. The system aims to ensure traditional manufacturers also produce new energy vehicles while providing a potential revenue stream for smaller players by allowing them to sell excess credits.

Amid headlines of the impending arrival of autonomous vehicles (AVs) on China’s roads, Michael Shu, general manager of the Auto Intelligent Ecology Institute at Chinese automotive manufacturer BYD, says the technology should be viewed with a level head.

“We need to look at self-driving cars with a calm eye,” he told attendees at TechCrunch Shenzhen today (November 19). “Driverless cars need to become more mature, rules and regulations still need to be formulated, and ethical issues need to be solved.”

AVs have become a hot topic—especially in China. Earlier this year, the country issued a set of national standards for AV testing. Before this, regional standards had been implemented, slowing the development process. To speed up advancement, Chinese tech companies have been partnering with vehicle manufacturers. Search giant Baidu has partnered with automotive firms including BYD and Ford to develop and test self-driving cars.

China is betting that intelligent vehicles will be a vast market, projecting the industry to reach $14 billion in the next two years. China’s planning body, the National Development and Reform Commission, has issued guidelines for autonomous and semi-autonomous vehicle adoption to reach 50% of all cars by 2020.

But there are still a significant number of challenges in AV development. Shu says another major issue is data security.

“If an autonomous vehicle is hacked, the physical safety of the passengers can be compromised. Vehicles need to be more secure,” he said. He also says that the technology needs to improve.

Self-driving vehicles are categorized from Level 0 to Level 5. Most cars currently on the road are wholly dependent on their drivers to function, putting them in the first category. Level 1 vehicles include the seeds of automation with features like cruise control. US auto manufacturer Tesla’s AutoPilot, which can control the speed of the car and its steering, is an example of a Level 2 system.

Self-driving car firms are currently focusing on Level 4 capabilities, fully autonomous vehicles within certain road and weather conditions.

However, Baidu, China’s poster child of AV development has faced significant roadblocks when testing its vehicles in the US. According to data released by California’s Department of Motor Vehicles, the company’s test vehicles required human intervention when driving every 66 kilometers on average. In comparison, GM’s Cruise required “disengagements” every 7,400 kilometers and Google’s Waymo every 9,900 kilometers.

汽车132年史上首次！比亚迪发布D++开放生态：要做“长了腿”的超级手机 – ifeng Tech

What happened: Yesterday (September 5), during BYD’s Worldwide Developer Conference, the company revealed an ecosystem called D++ which will provide open APIs, vehicle data, and access to developers. BYD hopes to accelerate the process of smart vehicle development by inviting developers to create on an open-source-like platform. The first model on the platform will be the Qin Pro, a model which Baidu’s Apollo autonomous driving program has acknowledged as an L3 candidate qualified for future mass production.

Why it’s important: BYD’s step to offer an open system to developers signals an important move to collaborate. Instead of building a tightly-controlled self-owned ecosystem, the company’s cooperation gesture will quickly establish a vibrant smart vehicle ecosystem and developers’ community. The company also invited high-level officers from companies including Microsoft, Tencent labs, Alibaba Cloud, and Roadstar.ai to the conference.

Explainer: China’s tech ecosystems and the barriers between them

BYD, China’s well-known car manufacturer and new energy solution provider, released a Carbon Credit App which the company co-developed with DNV GL, an international risk management company, and VeChain, a Shanghai-based blockchain application company.

BYD has been the world’s top manufacturer of plug-in electric cars for the last three years. The new app was created to encourage travel by new energy vehicles to reduce carbon emission with smart collection and management of data. It was presented during BYD’s Worldwide Developer Conference on September 5th and is part of the carbon banking solution devised by the three partners.

VeChain, the key tech contributor to the app, enables BYD to calculate a user’s carbon emission level with a smart contract built on VeChainThor, VeChain’s public blockchain. The technology helps gather data on mileage, fuel consumption, and electricity consumption, and then issues carbon credits that can be exchanged for goods and services. A user can log into the app’s calculation system from an application programming interface (API) installed in BYD’s new energy cars by scanning a QR code.

According to an official release TechNode acquired from VeChain, the company believes that “this will be the first enterprise-level application moving the data of millions of cars, buses, trains, and other vehicles onto a public blockchain platform.” The confident statement implies the company’s vision to expand the footprint of their business to a wide range of sectors in the transportation industry.

This is not the company’s first cooperation with leading Chinese enterprises. On September 2, VeChain entered a partnership with the People’s Insurance Company (Group) of China (PICC), the country’s leading state-backed insurance solution provider. The partnership, according to PICC, will provide a “robust digital trust platform” for enhanced data management and processing.

The cooperation with BYD will allow VeChain to approach vehicle maintenance shops and other after-sale sectors who will function as data providers for lifecycle data management of the vehicles.

Interestingly, the debut of the app is just 3 days after VeChain’s announcement of its partnership with PICC. Though VeChain said today that the data VeChainThor collected for BYD’s new energy solutions will cast light on improving efficiency and reliability of insurance, there is no sign of a three-party partnership between VeChain, BYD, and PICC.

VeChain has been keeping its profile low in China’s blockchain field, but the company’s achievements have raised interest. According to a report on the ranking of global companies’ blockchain patent qualified so far, Alibaba topped the list with 90 patents. Tencent ranked 8th (40) and VeChain ranked 10th (38).

For one well-known Chinese electric vehicle maker, two recent PR crises reflect a deeper dilemma playing out all over the world. After a string of high-profile, highly-leveraged overseas corporate expansions in recent years, many investors, consumers, and employees both in China and overseas have been left with only broken promises and unpaid bills. Even for those who seem credible, the specter of recently failed expansions now haunts all globalizing Chinese firms, regardless of whether or not they have done anything to deserve it.

The company in the middle of these crises is BYD, the Chinese automaker backed famously by Warren Buffet’s Berkshire Hathaway.

Fraud, football, and a lot of questions

The most recent case has raised eyebrows among many observers and involves accusations from the Shenzhen-based company that an individual had fraudulently conducted business on their behalf.

The alleged fraud involves complications around a marketing deal with London football club Arsenal.

The would-be partnership between Arsenal and BYD was announced in April of this year, with the club publicly celebrating the deal to cooperate with “the world’s best-selling electric vehicle manufacturer”.

In an announcement on the club’s official site, the deal would have provided BYD with a broad range of marketing rights including pitch-side LED signage and branding on dugout seats at Emirates Stadium. BYD would have also had access to Arsenal legends for promotional events in China.

BYD announced in a statement last week, however, that a woman by name of Li Juan, also known as Liki Li, posing as an employee at its Shanghai branch, had signed multiple contracts with advertising agencies to promote the company, using a forged company seal.

“BYD has informed Arsenal that they believe they have been the victim of a fraud in relation to various advertising agreements,” said Arsenal in a brief statement on their Chinese company web site. Neither side has released any additional information as to the future of the partnership, aside from that they are “investigating the situation.”

Details of the case had many observers publicly expressing skepticism of BYD’s claims, as BYD executives were clearly involved with the deal early on, but now seem to be claiming that they did not in fact officially authorize certain aspects of it. Reports suggest that the alleged fraudster and her firm had worked for years as a known representative and vendor for BYD, and had conducted transactions on their behalf, although BYD fervently denies any relationship.

Some are speculating that this is an attempt for BYD to back out of the deal.

“With senior officials from BYD clearly involved in the partnership with Arsenal, including being present at the signing ceremony and launch event, it would be disingenuous for them to claim that the entire deal was fraudulent,” says Mark Dreyer, a China sports media veteran and founder of China Sports Insider. “In addition, how has it taken them two or three months to say anything about it? It is far more likely that they are having second thoughts about the deal, and are looking for a way out.”

As both Arsenal and BYD have offered limited information, it is difficult to come to any conclusion at this current time as to BYD’s intent, or as to their relationship with the accused.

What is worth taking note of, however, is that this is just one case among a broader trend of odd instances that, at the very least, merit a closer look. Some are directly related to BYD’s business dealings. For others, BYD may be an innocent casualty, simply by association, of a string of highly-publicized failed global expansions in recent years by Chinese firms.

BYD’s LA electric bus deal: Overpromising, underdelivering, and a little corruption

Meanwhile, an ocean away, BYD has been dealing with another PR mess.

BYD, in English, stands for “Build Your Dreams,” which is fitting, as the company certainly had lofty dreams of its own. It aims to be a global leader in electric vehicles, and in recent years, the firm has been in the midst of an aggressive global expansion. One early step in their globalization journey was the success of a 2008 bid to provide electric public buses for the Los Angeles metropolitan area. With the prospect of local job creation and cleaner air, local politicians were quick to get on board with the proposal.

A decade into the deal, however, the results have been less-than-stellar.

An investigation by the Los Angeles Times, published in May of this year, found that the fleet of BYD buses was contending with a record of poor performance and mechanical problems. Buses were known to stall on hills and required service much more frequently than older buses. They also reportedly had unpredictable driving ranges which were less than the advertised distances and were impaired by the heat, the cold, or the way drivers braked.

Despite claims from BYD executives that they have received overwhelmingly positive feedback on the vehicles, Times reporters found that government emails and bus inspection records showed multiple agencies had confronted the company regarding their quality and range issues. In response, BYD executives directed blame to outside forces, including drivers braking too hard, and a negative publicity campaign by labor activists pushing to unionize BYD’s workforce. They also cast blame on some transit authority officials for being “insufficiently committed” to transitioning to electric vehicles.

A response that seemed particularly tone-deaf from BYD was a claim that, despite receiving hundreds of millions of taxpayer dollars with insufficient results, they should be “lauded for providing an important public service.”

“If you want to find the problem for the new technology, you always can try to,” said Stella Li, president of BYD Motors Inc, BYD’s US-based subsidiary responsible for the buses. “If you want success,” she said, “everything is positive.”

But…. There are many ways to look at this case

Reading the detailed, well-researched takedown from the LA Times, one may be alarmed by the case. It would be very easy, perhaps natural, to adopt this narrative:

This Chinese company uses corrupt, backdoor channels to ensure lucrative deals from dirty politicians at the cost of the local taxpayer.  They consistently lied about the capabilities of their buses and how many workers they could employ. They violated local laws, underpaying their workers while treating them poorly, all while their executives got rich. When confronted with their misdeeds, they refused to accept responsibility and pointed fingers at others, expressing self-righteousness and disdain for the good, hardworking local people.

While the words used in that description may be a bit sensational, many, if not all of them do seem to be factually true, at least to my knowledge. However, someone could also adopt this narrative:

BYD is a forward-thinking company that is bringing environmentally-friendly transportation to the Los Angeles metropolitan area, and jobs to the town of Lancaster. Their buses are competitively-priced and comparable in quality to their competitors. Electric vehicles are different than diesel-powered ones, and in a relatively new industry. Therefore, it can be expected that there may be some problems along the way. Sure, they may have overestimated the distance that the batteries could last and the people they would employ, but at the time of the proposal, they chose a number at the high end of their estimated range. After all, they wanted to win the bid, and it is not unheard of to slightly exaggerating one’s capabilities a little in those circumstances.

That narrative seems plausible. But which story will most people choose to accept, and why? That could be determined by whether an individual tends to be more trusting or more skeptical, or by prejudices based on racism or nationalism. It could also be influenced by someone’s experiences with local government, corporations, or labor unions in general.

Ultimately, though, an individual’s decision to offer the benefit of the doubt comes from whether or not they have trust in priorities and intent, whether or not they feel as though they understand what is in someone else’s heart. It is this issue which, I believe, is a question being increasingly asked regarding Chinese firms. Recent events also indicate that it is for good reason.

China’s global corporate spending spree, and its many ripple effects

BYD is not the only Chinese company to be caught in awkward financial entanglements with a European football club.  After a surprise acquisition of AC Milan in 2017 by mysterious Chinese billionaire Li Yonghong, the club now seems to be getting taken over by infamous US “vulture capital” fund Elliott, after Li has been unable to provide them with the funds he had promised.

While he is undeniably entertaining, Aston Villa’s eccentric owner Tony Xia now seems to be driving the club into financial ruin after two years of mismanagement, failing to qualify for the Premier League, and what seems to be an inability on Xia’s part to supply the necessary funds from China.

These cases are littered throughout professional football but are hardly limited to sports. Anbang, HNA, and Wanda are just a few of the most recognizable names on a long list of Chinese firms that in the past few years have frantically purchased overseas company after overseas company, only to suffer from a cash crunch, unable to come up with the funds to follow through on their commitments.

Many of these have resulted in dramatic stories of a number of larger-than-life business tycoons, rapidly ascending to glorious heights, followed by dramatic, tragic downfalls. But in all of the focus on the money and the power and the drama, the people most affected usually get overlooked.

For over a year in total in 2016 and 2017, I worked in some capacity or another for a firm that went through one of these “global expansion supernovas.” The company was a well-known local internet and entertainment firm in China, with an ambitious and intelligent CEO, who had plans to build a global technology empire the scale of which the world had never seen. They opened sizable offices in high-profile locations in major global hubs of technology, entertainment, and finance. They put on elaborate events and aggressively recruited top talent with lucrative compensation packages.

Being at the same time excited and taken aback by what seemed to me as an effort to defy the fundamental “laws of physics” that govern business and finance, I consulted with knowledgeable experts on the topic to try to get the full picture before joining the company. I ended up taking the job, but hedged my bets, hoping for the best, but knowing that I would be fine if the worst were to happen as well. I admired the CEO and what he was attempting to do, but I know that I could not really count on any promise I was given, and so I positioned my life situation with an understanding of that knowledge.

I still hear stories here and there, of employees still owed significant amounts of money by the company, or whose long-term romantic relationships were unable to withstand the pressure brought home every day from the office. Some have suffered far worse fates.

For each of these people who I know to have suffered the most, both in China and overseas, there was a theme: They believed what the company, what their managers, what the CEO told them. Things were fine for me and others largely because we didn’t. In other words, they suffered because they were better employees. Skepticism reaped benefits, while trust brought about pain.

How much can we assume?

When asking around about these Chinese corporate tragedies, different reasons are offered by different people, in different circumstances. Some blame the ambition and ego of the leaders of these companies, aiming too high and becoming detached from reality. Others point to China’s financial and economic situation, in which getting money out of the country is growing increasingly difficult, credit is tightening, and the regulatory environment is uncertain. And yet others claim that corruption is the culprit, that these expansions, no matter how reckless, offer a way for ill-gotten gains to be transferred out of the country.

To be clear, I have no evidence or knowledge that would justify making any claim as to BYD’s finances. What I do know is that they are a Chinese company that has been undergoing a global expansion. I also know that for those both Chinese and foreign who I have seen take globalizing Chinese firms at their word, they seem to have paid a price for it.

There is also no shortage of poor behavior from the large companies of other countries as well. For any of the misdeeds a Chinese firm may make, a foreign company has probably done a similar act already, at least in one way or another. However, Chinese firms are relatively new to the global stage. Compared with other major international firms, they also tend to have far less transparent corporate governance structures. The Chinese financial system is also quite opaque, as is its legal system. I study, work in, and write about this country’s business world for a living, and every day, I feel like I understand it less.

How then, should any overseas investor, government official, consumer, or employee know what to expect when a Chinese firm sets up shop in their town?

BYD, by all accounts, seems to be imperfect. However, they seem to be a serious, legitimate business, making a product that is useful and beneficial. There is a reason that a conservative investor like Warren Buffet is willing to support them. But the stories and attention directed at globalizing Chinese firms over the last few years have not gone to the imperfect, modest successes, but to the loud, brash, messy failures that leave in their wake nothing but unpaid debts and unanswered questions.

Foreigners’ concerns about the transparency of Chinese systems and organizations is nothing new. It is a theme that has existed for centuries. After all, if there were one topic most frequently discussed China’s economic and diplomatic relations with the rest of the world, it would likely be “opening up.”

It is certainly possible to be trusted without being transparent. After all, Japanese corporate cultures are notoriously impossible to understand but represent some of the world’s most trusted products and brands. But the world generally knows how Japanese manufacturing methods work. After all, Toyota’s model has been adopted as standard practice throughout the automotive industry. Japanese corporate culture tends to adhere strictly to detailed processes, and their companies are less likely to try new or risky things.

But most importantly, the world has used their products for decades, and have come to know that they can be relied on. They may not be open to the world, but they are consistent. Their mysterious global misadventures in recent years seem to indicate that for many Chinese organizations, neither is true.

I would like to believe that a company like BYD is worth trusting, but the harsh reality for any Chinese firm going global at this moment is that they now must dig themselves out of a hole of skepticism, even if they deserve better. Can BYD and others earn the benefit of the doubt of a skeptical world? Possibly, but only if they are seriously committed to honesty and transparency. I personally am not convinced that they are, but would welcome the opportunity to be persuaded otherwise.

Didi Chuxing is launching a program to alter the very nature of car ownership and shake up the automobile manufacturing supply chain in China—and beyond. The company masterminded a shift to “car operation” announcing the move at a glitzy event in Beijing attended by auto industry top brass.

“In the future, software, hardware, and user services will be integrated,” said Cheng Wei, Didi CEO. “And we will be the service provider.” He has hopes that China will become a great automotive nation (汽车强国) in the next five to ten years. This involves Didi becoming the biggest one-stop solution to transport worldwide, to manage the car operation platform and be the world leader in smart transportation.

Didi will also be involved in the design of a car specially developed for ride-hailing with a predicted market of 10 million units in 10 years’ time with the help of the D-Alliance. The alliance, also called Didi Auto Alliance or Torrent (洪流联盟), is a platform that brings together 31 auto partners. The name in Chinese (hongliu or “torrent”) comes from the water drops in the characters for Didi (滴滴 or “drip drip”) as the company sees its drivers and vehicles coming together as droplets to form a torrent.

The platform includes some of the biggest players in China’s automakers and original equipment manufacturers (OEMs)—FAW, BYD, Beijing Automotive Group (BAIC), and Guangzhou Automotive Group (GAC). Didi is already working with BYD to develop the “D-1,” the first car developed specifically for ride-hailing. According to the figures, the D-Alliance would let DiDi control 50% of the transport needs of 2 billion people.

The platform would mean car manufacturers become car operators in an end-to-end chain from car manufacturing to refueling/recharging to maintenance. Private individuals would not need to own their own cars, nor would Didi. Instead, the ride-hailing giant would be involved in car design and would coordinate the entire system, making the vehicles available for ride-hailing or short-term hire. The platform will even look into ways of providing financing.

As the biggest provider of transport both in China and the world, Didi is well positioned to lead such an alliance—and take a cut in more areas of transportation than just rides. The company has 30 million rides per day and envisions a user base of 2 billion people worldwide.

Ride-hailing by Didi is based on private car owners in countries such as China. However, in markets where private car ownership is low, a new model is needed. Didi has tried leasing vehicles to drivers, but it was not cost-effective. The current solution could be to do away with private ownership and, eventually, with leasing.

“No cars have been designed specifically for sharing [ride hailing] as they are all owned by drivers,” said Cheng, “Manufacturers should provide more customization of vehicles that are used for sharing.”

Safety, efficiency, and emissions reduction are three of the goals of the Alliance. 260,000 electric vehicles—almost a third of all electric vehicles in China—are currently taking passengers for Didi. The company has China’s largest fleet of EV numbering around 15,000 at present via a joint venture with BYD, with the aim to be “operating” over a million by 2020, said Didi VP Jesse Yang Jun.

Didi has already been working with BYD for two years, including on the D1—the first car to be designed for sharing. “The data from our hundreds of millions of journeys show the importance of safety,” said Yang. The model, expected to be ready within five years, will incorporate AI features to enhance traffic safety, passenger safety, and battery safety.

Efficiency modifications focus on city-wide traffic congestion, but also on the cost per kilometer for operating the vehicles. The aim is to reduce the overall running cost of a vehicle by half, in part by utilizing the company’s big data.

“We want Didi to become the incubator for the whole chain,” said general manager Chen Xi referring to the manufacturing to maintenance model of “car operation.”

Members of the alliance shared their opinions in a panel hosted by Didi president Jean Liu who shared that it was a Didi requirement that senior management all learn to drive so they can experience it for themselves. Xu Heyi, chairman of Beijing Automotive Group, said the D-Alliance supports the call of Chinese President Xi Jinping and the central government to embrace innovation.

The general consensus among manufacturers was that attention would shift from the exterior design and appeal of cars to the interior. Xu Heyi said the car constitutes the third most important place in people’s lives after the home and the office.

Editor’s note: This was contributed by Jamie Manley, a former Program Associate at the Paulson Institute, a think-and-do tank focused on strengthening US-China relations and advancing sustainable economic growth in both countries. He can be contacted on LinkedIn or by adding jamiemanley on WeChat.

The race to develop autonomous vehicles is on. But how soon will self-driving cars actually become available? A motley crew of companies have joined in the race to find out, ranging from traditional auto manufacturing giants to small software startups. Perhaps the most interesting entrants are Chinese tech companies and auto manufacturers such as Baidu, Didi, BYD, and Tencent. These companies are not only planning to compete in the Chinese market but are using the transition to autonomous and electric vehicles as a chance to finally penetrate foreign auto markets.

The geopolitical implications of China’s international autonomous vehicle ambitions have received little attention, especially when compared to the potential effects autonomous vehicles could have on employment, road safety, and the automotive industry itself. But unlike other industries where Chinese companies have achieved international dominance, such as solar panels, autonomous vehicles could pose serious privacy and security issues.

The Chinese legislature recently released a comprehensive plan for China to become a world leader in artificial intelligence, including autonomous vehicles, by 2030, with a strong focus on international expansion. Chinese companies are taking note: nearly a fifth of the 42 companies approved for California’s autonomous vehicle testing permit are Chinese. Baidu is also coordinating international autonomous vehicle stakeholders with its Apollo platform, which includes a data sharing facility, an autonomous driving simulator, and an equity investment fund.

But autonomous vehicles hold particular data privacy risks, which could become a sticking point as China expands its global technology reach. The Chinese government has a poor track record of protecting the privacy of its citizens and is becoming more sophisticated about utilizing data for social control. For example, the government has taken equity stakes in major Chinese tech companies like Tencent, and now requires popular apps like WeChat to make private user conversations available for inspection. Local police are creating “Police Clouds” to aggregate large amounts of citizen data, ranging from hotel records to birth control methods, and are using predictive analytics to forecast crime before it happens. Chinese companies are compelled first and foremost to cooperate with the Chinese government, and the same data that the government uses to build surveillance systems has commercial value for tech companies. This means that Chinese tech companies have an incentive to collect as much data as possible about their users while also making it available to the government.

Will customers and governments outside of China trust Chinese companies with the vast amount of sensitive data generated by autonomous vehicles?

Much has already been written about the privacy implication of autonomous vehicles: in short, the proliferation of sensors attached to autonomous vehicles could allow for real-time, street-level monitoring anywhere autonomous vehicles are deployed. Used in conjunction with machine learning algorithms that allow computers to identify faces or specific activities from sensor data, autonomous vehicles could give companies and governments unprecedented marketing and surveillance tools.

The possible uses for this sensor data, both beneficial and nefarious, are endless. On the plus side, this data could be used to better understand consumer behavior and reduce auto insurance costs. On the other hand, the same data could also be used to track individuals without their consent and map out the real-time locations of a police force within a city. There are already companies making real-time street-level 3D maps and analytics derived from autonomous vehicles available to the public.

Critically, autonomous vehicles also collect data completely unrelated to the user and driving experience. Data on pedestrians, storefronts, and homes could all be captured by a passing vehicle. When aggregated, the data from autonomous vehicles could provide companies with the same level of insight into the physical world that companies like Facebook already have about their user’s digital lives. And if autonomous vehicles become a winner-takes-all market, this data could be concentrated in the hands of just a few players.

These are serious domestic issues that are compounded when a foreign company or government becomes involved. Drone maker DJI has come under scrutiny from American customs authorities, who suspect that DJI’s drones may be sending sensitive information about American infrastructure back to the Chinese government. The Indian Intelligence Bureau recently released a list of 42 Chinese apps that could be sending sensitive information back to Chinese authorities. Chinese smartphone manufacturers Huawei and ZTE have long been banned from selling to the US government over concerns about potential backdoors. The list goes on. Chinese autonomous vehicle companies may fare better in markets outside the US where consumers are more concerned about price than privacy, but foreign governments would still face serious security concerns.

Of course, foreign firms entering China may face similar issues. China is already putting up barriers to foreign autonomous vehicle firms hoping to create high-definition maps in China. Yet the tight link between Chinese companies and the Chinese government means that the potential for Chinese companies to misuse autonomous vehicle data seems especially high. The potential for misuse carries a commercial risk: companies that are not proactive about managing these concerns could see consumer sentiment turn against them, or governments could eventually decide that the security risks associated with this type of data collection are too great.

To help minimize these concerns, Chinese autonomous vehicle companies could confine data processing to the vehicle, anonymize data before it is sent back to the cloud, or move foreign user data to servers outside China. But even those measures might not be enough. On a broader level, there is a need for baseline regulation on how data from autonomous vehicles is used and protected. Legislation recently introduced in the US Senate, the SPY Car Act of 2017, provides one model. The bill would develop standards to protect user data from hacking, disclose how data is collected and used, and give users the option to opt out of data collection.

To succeed abroad, Chinese autonomous vehicle companies will need to take a proactive and politically-sensitive approach to managing these issues. Ultimately, while building a fully-functional autonomous vehicle would be an engineering marvel, the real challenge for Chinese autonomous vehicle companies may lie in gaining the trust of users outside of China.

TechNode does not necessarily endorse the statements made in this article.

Chinese IT equipment and smartphone manufacturer Huawei announced that it will join hands with local automaker BYD to produce the world’s first eLTE unmanned driving system for BYD’s monorail, local media has reported.

BYD’s monorail, known as SkyRail, went into operation in September 2017 in the city of Yinchuan and has already made an international leap to the Philippines. The company, which counts Warren Buffet as one of its backers, developed the monorail as a public transportation solution to China’s crowded city streets that is cheaper than subways. It has spent about five years and RMB 5 billion to develop SkyRail.

BYD started off as a battery produces and has been heavily investing in new energy vehicles. In 2016, while China’s electric vehicle market was being boosted by government subsidies, the carmaker became the world’s largest seller of electric passenger vehicles including electric buses. BYD showcased its app-equipped smart car Qin at last year’s World’s Mobile Conference in Shanghai.

BYD and Huawei made the announcement in Yinchuan noting that the self-driving collaboration will start January 10th. The two companies have already worked together on developing smart factory solutions.

Updated January 23, 2018: A previous version of this post stated that eLTE is Huawei’s proprietary technology based on the LTE standard. eLTE is not Huawei’s proprietary technology.

Power bank rental startup Xiaodian (小电科技 in Chinese) officially announced their performance on September 11th. Xiaodian now covers 70 cities in China. Xiaodian’s data also shows that the daily order increased 195% in August (in Chinese), and the daily average usage number of a power bank is more than once. Xiaodian’s daily use times exceeded 240,000 in August, with its peak day use times exceeding 310,000. From the April this year until today, the cumulative number of users exceeded 10 million people.

“Looking at the current performance of the industry as a whole, Xiaodian is in the absolute leading position, the highest return on investment in the industry. In terms of capital utilization efficiency and fine operation, Xiaodian’s performance is in line with their investment expectations,” Xiaodian’s angel investor, GSR Ventures Managing Director Zhu Xiaohu said.

Xiaodian partnered with WeChat Pay and mini program to launch pilot testing power bank rental service which a fee of 1 fen (USD 0.014) from users since June 20th. According to 2017 Q2 WeChat mini program index statistics (in Chinese), Xiaodian’s mini program ranked 15th, showing the highest traffic in the power bank rental industry. Among the rental economy startups, Xiaodian ranked second, after Mobike.

“There are two interesting figures to share. First, the purchase rate was less than 4% in the beginning, which now increased more than 30%. Second, Xiaodian’s number of business orders increased from hundreds to nearly ten thousand per month,” Xiaodian’s CEO Tang Yongbo said. “These two sets of data fully explains the consumer behavior changes after our aggressive expansion into the region. The majority of consumers use our service in radius of 5 km.”

Xiaodian is now working with Foxconn and BYD, the Chinese manufacturer of automobiles and rechargeable batteries, to swiftly expand its presence into more Chinese cities.

Xiaodian is also looking for ways to serve users in instant need for phone charging. Not long ago, Xiaodian collaborated with Hangzhou City Management Committee and Alibaba’s Sesame Credit to pilot a public power bank station in Hangzhou (in Chinese). If a user’s Sesame Credit points more than 600 points, then users don’t have to pay a deposit and can directly rent a power bank from the kiosk.

Founded in December 2016, Xiaodian raised RMB 100 million series A led by Tencent and Hangzhou Vision Capital in this April.

Volkswagen, Toyota, Alibaba YunOS and BYD displayed their connected cars at the World Mobile Conference Shanghai on June 28, 2017, showing the audience how their cars can integrate with our smarter world.

The global connected car market is expected to garner $141 billion by 2020. Senior Vice President of Alibaba Cloud, Hu Xiaoming, said they expect to put 700,000 connected cars powered by YunOS on China’s streets in 2017.

Comparing the apps that Volkswagen, Toyota, Alibaba YunOS and BYD are using for their connected cars revealed that all companies except for Alibaba YunOS had Ximalya FM integrated. Volkswagen and Toyota were using QQMusic, while Alibaba YunOS, of course, had an array of apps from Alibaba’s ecosystem – Alipay, Xiami, AliTravel, and Taobao.

“The key functions or applications that should be in the car include navigation and FM radio. The AMap (高德地图) and Ximalaya FM (喜马拉雅) applications are currently embedded in third-party cars. We use them because they are the most popular app in each category,” Loic Lee, senior product planning manager at Huawei told TechNode at Volkswagen’s booth.

So are these apps really the most popular app in their category? According to 2016 China App Rankings released by Cheetah Lab, the answer is yes. Ximalaya FM ranked first among China’s audio content apps with three times higher active penetration rate than No. 2 on the list. QQ Music ranked second on the music app ranking, following Kugou; both apps are owned by Tencent. In the navigation category, Amap ranked second, following Baidu Maps. Amap, however, has a higher number of weekly app openings.

Volkswagen – Open to many standards

Volkswagen’s newest SUV Tiguan R-line can connect with Huawei P10, iPhone, and Samsung phones. For example, an owner of Huawei P10 can connect to the car’s cloud via a USB cable. The car’s head unit display and the phone keep the same interface and experience. To control the car remotely from their phone and to call someone from the car’s head unit, users need to have a SIM card in the phone.

German car maker Volkswagen’s connected cars work with several device interoperability standards that offer integration between a smartphone and a car’s infotainment system, including Baidu Carlife, Apple Carplay, Android Auto and Mirror Link. In China, Volkswagen supports connection with Huawei’s P10, P10 Puls,  Huawei Mate 9, and Mate 9 Pro.

“Samsung also supports Mirror link, but Huawei, as a Chinese company, has the power to ask third-party apps to work with them. That way, we can provide more applications,” Loic Lee, senior product planning manager at Huawei told TechNode.

Toyota + SmartDeviceLink

Originally created by Ford, SmartDeviceLink is an open source platform that connects smart devices with a car’s on-board system. Toyota has included five apps that come with the car, including QQMusic, Ximalaya FM, Zuimei Tianqi (最美天气 literally, “the most beautiful weather” in English), Japan Travel Information app made by KDDI, and a four-dimensional navigation app. Toyota says it plans to launch SDL-powered connected cars in 2018.

Toyota and Ford launched the SmartDeviceLink Consortium earlier this year to help car manufacturers and app developers create integrated driving experiences. Members of the SDL Consortium also include Subaru, Mazda, and Suzuki.

BYD – A clean ride

BYD’s Qin (秦, referring to Qin Shihuang, China’s first emperor) comes preloaded with BYD’s own app stores, supporting connection with any Android or Apple phone. The Qin also comes with features made specially for the Chinese market: a Dual Mode that allows drivers to switch between full-electric and hybrid as well as an air filtration mechanism.

“BYD’s Qin model has an app that monitors the PM 2.5 levels inside and outside the car. When PM 2.5 reaches a certain level, the car can purify the air in 5 minutes,” said a BYD staff member at the exhibition.

Alibaba’s YunOS Auto

On March 2017, Alibaba Group’s YunOS released YunOS Carware intelligent vehicle operating system. The software supports applications for the car itself as well as a HUD (head-up display), driving camera, and an intelligent rearview mirror. Cloud-based data services enable YunOS Carware to anticipate user needs and recommend appropriate music, radio programs, or car services.

On top of that, YunOS Auto’s engine is able to process and analyze data about how people drive. Since August last year, the connected car gathered 11.7 billion data points on driving behavior. The data will be used to encourage drivers to change their driving habits, saving fuel and making cities smarter.

Currently, 23 mobile phones are using the YunOS cloud system, including DOOV, SOP, China Mobile, Xiaolajiao (小辣椒) and Meizu.

In July 2016, Alibaba’s joint SAIC officially launched the mass-produced connected car Roewe RX5. Chinese automaker SAIC (上汽) has several connected cars in the market with YunOS Auto integrated, including Roewe RX5 (荣威RX5), Roewe eRX5, Roewe ERX5 pure electric version, Roewe i6, Roewe ei6, 名爵ZS,  andChase D90 (大通D90). The top selling model is Roewe RX5’s with orders exceeding 100,000 in March and average monthly sales of over 20,000.