More and more articles (Wired, MIT Tech Review, The Washington Post, etc.) discuss how China’s car industry has outdriven countries such as Germany, the United States or Japan in all matters EV, filling the segments Tesla left vacant, and speeding ahead to become the world’s leading power in the technology that represents the only viable future for the automotive industry.
Fueled by the success of its EVs, China is already the world’s largest exporter of automobiles, overtaking Japan, which has been held back by Toyota’s narrow-minded stupidity. If we look only at EVs, the US automotive industry is falling behind China and Europe, hit by strikes and finding it harder than ever to turn a profit.
China’s growing dominance is so worrying that it is being debated in the US Congress, while the European Union is trying to protect itself from the flooding of its markets by investigating possible Chinese government subsidies to its companies — most likely true — and considering tariffs.
China has simply done what we all know it knows how to do: plan its economy for the long term and rely on third-party technologies until, taking advantage of the huge size of its domestic market, it is able to match them. While the global auto industry, with few exceptions, ridiculed Elon Musk’s Tesla, insisting it was economically unviable, thus delayed its transition to EVs, the Chinese market received the company’s domestically manufactured Model 3 and Model Y with open arms, and its industry, after copying them, enjoyed huge growth.
Consolidated companies in other segments, Tesla-clones, startups and companies of all kinds got down to work, led by a Chinese government confident of its country’s advantage in a sector as strategic as batteries. There are now up to five hundred EV startups, something that is very difficult to imagine without solid government support programs (a.k.a. money transfers, as the European Union claims).
In less than a decade, the Chinese EV market has grown to become the largest in the world, prompting complaints in some quarters it was manufacturing too many. By 2019, already one out of every two electric vehicles sold worldwide was being sold in China, and the country already had more EV chargers than any other in both absolute and relative terms. With such scale, virtually any company engaged in manufacturing anything can leverage constant improvements to become competitive. Those who, in 2022, were saying that China would not dominate the EV market that year were right: it took just another year 🙂
The future? Hard to foresee. China has followed Elon Musk’s strategy of open patents and a willingness to be copied: Tesla’s idea, stated as such in its corporate mission since its founding, was to “accelerate the advent of sustainable transportation by bringing mass-market attractive electric cars to market as soon as possible”, and the Chinese industry is working to make this increasingly possible. China, quite simply, has been able to undergo an agile transition to electric vehicles to go on to dominate the global automotive industry.
Sales figures increasingly indicate that it will be Chinese EVs that can best fill the most economical segments, but without neglecting the higher ranges in which they are accumulating more and more experience and competitiveness. The country that used to assemble products with cheap labor is now a powerhouse in robotic manufacturing. Basically, the game is scale and experience. And China knows a lot about that.
(En español, aquí)
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This post was previously published on MEDIUM.COM.
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