China is the largest vehicle market, largest vehicle exporter and largest electric vehicle manufacturer globally. Following the ambitious growth of Chinese EVs across the globe, Europe and America have been nervously watching their age of automotive dominance starting to end. China has for about two decades now been investing in EV production, after finding it tough to match up to the leading ICE manufacturers from Japan, Europe & America. The legacy OEMs, as we will call these ICE manufacturers, kept ignoring the emergence of electric mobility since they were making so much money on their fossil fuel models. This bold move is starting to reap big rewards with China now controlling over half of the global material supply chain for EV production.
China is the largest vehicle market globally at over 26 million new vehicles annually. The legacy OEMs like VW, GM, Toyota & Mercedes have made large profits in the China market for years on end, till GM executives had a phrase that ‘in China they make more money than God’. In pursuit of this large market, Tesla got state approval to start manufacturing and selling in China. The crafty Chinese had only one condition, Tesla had to use local suppliers for the various vehicle components. The skills and knowledge transfer from this engagement started spreading to the rest of the Chinese EV industry. The Chinese market force taking over the world is a combination of national direction towards electric mobility, having the largest automotive market in the world, unparalleled integration of vehicle software & hardware, and exemplary vehicle design excellence after poaching some top European artistic talent. The China automarket is approaching 50% EV adoption, mainly driven by local brands like BYD, Saic & Nio; only the foreign Tesla is thriving amidst the ongoing price war blood bath.
Chinese vehicle buyers have developed such a patriotic loyalty to the Chinese EV models, that several ICE manufacturers have closed shop after their sales numbers were too low to cover their overheads. GM, VW, Mercedes, Nissan & Honda used to get over 35% of their vehicle sales in China – Toyota was at 18%. As the China market is disappearing under their feet, many firms have shut down or cut down opeerations in order to stay afloat. GM, VW, Mitsubishi, Honda, Nissan, Renault, Citroen, Jeep, Chrysler & Kia have retreated their ICE production as numbers kept dwindling. By the way Chinese manufacturers are also bleeding out in this cut throat market, with almost 100 EV producers, not all of them will be left standing in a few years. But those that do will take over the automotive world.