China continues to squeeze Western OEMs out of its home market, while Chinese OEMs take over globally. The power shift continues as Chinese automakers improve in battery technology, autonomous driving and vehicle design.<\/p>\n
71 new BEV (battery electric vehicle) models will go on sale in China this year. Working in synergy with the strong local battery manufacturing industry, OEMs have been able to reduce the size of the battery or increase the range of their EVs.<\/p>\n
The smaller batteries are used to improve the comfort of the car by creating more space in the interior. The reduction in battery size also reduces weight. This allows carmakers to switch from light but costly aluminium to heavy but cheap steel alloys. The new material allows them to sharpen their exterior design with sharper lines, because steel does not require the same degree of curvature as aluminium. The first models look similar to high-end Western brands but cost only 20% of them (e.g. Xiaomi SU7 vs. Porsche Taycan).<\/p>\n
With less mechanical and more electronic components, autonomous driving is more compatible with BEVs than with plug-in hybrid electric vehicles (PHEVs) or internal combustion engine vehicles (ICEVs). The Chinese government is assertively supporting its OEMs on the road to fully self-driving cars by providing the necessary regulatory framework. The miles driven by self-driving cars will provide experience and improve the system. This gives Chinese OEMs a competitive advantage.<\/p>\n
Chinese OEMs perceive only Tesla as a credible Western competitor in the field of EVs and self-driving cars. The other OEMs lack in technology. This causes the Chinese OEMs to experience growing attractivity in the Western markets. To limit the market entry, the EU is already debating additional tariffs on Chinese cars. The discussed is underpinned by the argument that the Chinese xEVs are heavily subsidized and thereby, distort Western markets. Even though, the argument is true, this article shows that the impressive “Value for money”\u00a0 is also achieved by a clear technological focus and advancements.\u00a0<\/p>\n
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