Small Chinese EV Makers Gain on Big Carmakers
2022-06-03
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1The big international carmakers like General Motors and Volkswagen may think their electric vehicles (EVs) will keep selling well in China.
2But they could face a surprise.
3Local carmakers have already taken a big share of the world's largest car market.
4It is estimated that car sales amount to $500 billion in China each year.
5When Beijing office worker Tianna Cheng planned to buy a car, she chose between three Chinese brands, Xpeng, BYD, and Nio.
6She did not consider foreign cars.
7"If I was buying a gasoline car, I may have considered foreign brands," the 29-year-old said as she drove home from work.
8"But I wanted an EV, and other than Tesla, I saw few foreign brands applying advanced smart technology properly."
9Cheng said that foreign car brands did not have what she was looking for.
10She wanted an EV able to give her the "comfort" of having a smartphone-like experience in her vehicle.
11"Foreign brands are so far from my life and lifestyle," said Cheng.
12She uses a mobile device to connect to shopping websites and control the windows and music while she is in her car.
13Cheng is one of many Chinese who are buying electric vehicles.
14The China Association of Automobile Manufacturers reported that sales increased in the first four months of 2022.
15During that time, the number of electric or plug-in hybrid passenger cars more than doubled from a year earlier to 1.49 million cars.
16Vehicles with these kinds of technologies represent 23 percent of China's passenger car market.
17However, vehicle sales fell 12 percent because of a drop in demand for gasoline cars.
18There are almost no foreign brands among China's top 10 makers of so-called new energy vehicles this year.
19The only exception is Tesla, which is in third place.
20All the rest are Chinese brands, from BYD and Wuling to Chery and Xpeng.
21China's leader is BYD.
22The company has sold about 390,000 EVs in the country this year.
23That is more than three times as many as worldwide leader Tesla sold in China.
24The top-ranked traditional carmaker is Volkswagen's FAW Group, in 15th place for EV sales.
25Since the 1990s, foreign carmakers sold 60 to 70 percent of the passenger cars in China.
26But in the first four months of 2022, their sales went down to 52 percent, and in April it was at 43 percent.
27Nissan chief Makoto Uchida told Reuters that some brands "could disappear in three to five years" in China.
28"Local brands are becoming stronger," said Uchida.
29He added that the quality of EVs from Chinese makers had improved quickly, with progress being made in the space of months.
30He said foreign carmakers had to move quickly in the design, development and launch of new models.
31He warned, "...If we were slow, we would be left behind."
32Bill Russo is a former Chrysler executive who now heads the Shanghai-based advisory business Automobility.
33He said foreign brands need to change the situation quickly because they control less than 20 percent of China's only growth auto market.
34"Chinese brands are winning the race to EV," said Russo.
35He added that consumers' desire for cars that are more like smartphones on four wheels is not likely to change.
36He considered this a problem because, "Traditional companies are not hi-tech natives."
37General Motors (GM) is now trying to gain younger buyers in big cities.
38The company announced plans to spend more than $35 billion worldwide by 2025 to make electric cars.
39That includes more than 30 new EVs, over 20 of them in China.
40This year, for example, GM will launch the all-electric Cadillac Lyriq sports utility vehicle.
41GM said it was using smart technologies including driver assistance on highways, high-level or "aviation-grade" cyber security and wireless software updates.
42Volkswagen is spending $55 billion worldwide on EVs by 2026.
43Its new ID. series began selling in China early last year.
44VW missed its goal of selling 80,000 to 100,000 ID. cars last year.
45It has sold only 33,300 cars through April.
46One concern for foreign brands is that their new EVs are aimed at the American and European markets.
47The cars are designed for performance and to last a long time.
48But drivers in China rarely can drive faster than 60 kilometers an hour because of crowded roads.
49Volkswagen said EV demand in China was strongly linked to the "smart car" idea.
50It is investing more in local research and software.
51Among those the international carmakers need to attract are people in big cities with money to spend.
52Li Huayuan, a civil engineer from Shanghai, is one of those consumers.
53Li briefly considered Japanese and German brands before he bought his BYD electric car last year for $43,000.
54"Seems to me only Tesla stands out when it comes to American brands," he said from his parked BYD car in the city of Mianyang in Sichuan where he is working on a project.
55"The other brands don't even look competitive to me," he added.
56I'm Jill Robbins.
57And I'm Gregory Stachel.
1The big international carmakers like General Motors and Volkswagen may think their electric vehicles (EVs) will keep selling well in China. But they could face a surprise. 2Local carmakers have already taken a big share of the world's largest car market. It is estimated that car sales amount to $500 billion in China each year. 3Buyers looking for smart technology 4When Beijing office worker Tianna Cheng planned to buy a car, she chose between three Chinese brands, Xpeng, BYD, and Nio. She did not consider foreign cars. 5"If I was buying a gasoline car, I may have considered foreign brands," the 29-year-old said as she drove home from work. "But I wanted an EV, and other than Tesla, I saw few foreign brands applying advanced smart technology properly." 6Cheng said that foreign car brands did not have what she was looking for. She wanted an EV able to give her the "comfort" of having a smartphone-like experience in her vehicle. 7"Foreign brands are so far from my life and lifestyle," said Cheng. She uses a mobile device to connect to shopping websites and control the windows and music while she is in her car. 8Cheng is one of many Chinese who are buying electric vehicles. The China Association of Automobile Manufacturers reported that sales increased in the first four months of 2022. During that time, the number of electric or plug-in hybrid passenger cars more than doubled from a year earlier to 1.49 million cars. 9Vehicles with these kinds of technologies represent 23 percent of China's passenger car market. However, vehicle sales fell 12 percent because of a drop in demand for gasoline cars. 10There are almost no foreign brands among China's top 10 makers of so-called new energy vehicles this year. The only exception is Tesla, which is in third place. All the rest are Chinese brands, from BYD and Wuling to Chery and Xpeng. 11China's leader is BYD. The company has sold about 390,000 EVs in the country this year. That is more than three times as many as worldwide leader Tesla sold in China. The top-ranked traditional carmaker is Volkswagen's FAW Group, in 15th place for EV sales. 12Since the 1990s, foreign carmakers sold 60 to 70 percent of the passenger cars in China. But in the first four months of 2022, their sales went down to 52 percent, and in April it was at 43 percent. 13Nissan chief Makoto Uchida told Reuters that some brands "could disappear in three to five years" in China. 14"Local brands are becoming stronger," said Uchida. He added that the quality of EVs from Chinese makers had improved quickly, with progress being made in the space of months. He said foreign carmakers had to move quickly in the design, development and launch of new models. He warned, "...If we were slow, we would be left behind." 15Hi-technology natives 16Bill Russo is a former Chrysler executive who now heads the Shanghai-based advisory business Automobility. He said foreign brands need to change the situation quickly because they control less than 20 percent of China's only growth auto market. 17"Chinese brands are winning the race to EV," said Russo. He added that consumers' desire for cars that are more like smartphones on four wheels is not likely to change. He considered this a problem because, "Traditional companies are not hi-tech natives." 18General Motors (GM) is now trying to gain younger buyers in big cities. The company announced plans to spend more than $35 billion worldwide by 2025 to make electric cars. That includes more than 30 new EVs, over 20 of them in China. This year, for example, GM will launch the all-electric Cadillac Lyriq sports utility vehicle. 19GM said it was using smart technologies including driver assistance on highways, high-level or "aviation-grade" cyber security and wireless software updates. 20Fast cars? 21Volkswagen is spending $55 billion worldwide on EVs by 2026. Its new ID. series began selling in China early last year. VW missed its goal of selling 80,000 to 100,000 ID. cars last year. It has sold only 33,300 cars through April. 22One concern for foreign brands is that their new EVs are aimed at the American and European markets. The cars are designed for performance and to last a long time. But drivers in China rarely can drive faster than 60 kilometers an hour because of crowded roads. 23Volkswagen said EV demand in China was strongly linked to the "smart car" idea. It is investing more in local research and software. 24Among those the international carmakers need to attract are people in big cities with money to spend. Li Huayuan, a civil engineer from Shanghai, is one of those consumers. 25Li briefly considered Japanese and German brands before he bought his BYD electric car last year for $43,000. 26"Seems to me only Tesla stands out when it comes to American brands," he said from his parked BYD car in the city of Mianyang in Sichuan where he is working on a project. 27"The other brands don't even look competitive to me," he added. 28I'm Jill Robbins. 29And I'm Gregory Stachel. 30Norihiko Shirouzu reported on this story for Reuters. Jill Robbins adapted it for Learning English. 31________________________________________________________________________ 32Words in This Story 33brand - n. a group of products made by a company that shares a name and certain qualities 34plug-in hybrid - adj. a vehicle that is powered by both electricity and gasoline that can be connected to an electricity system to add power to its battery 35consumer - n. a person who buys goods and services 36cyber - adj. dealing with computers 37update - n. new, improved, or fixed software which replaces older versions of the same software 38What do you think of China's electric vehicle market? We want to hear from you. Write to us in the Comments Section.