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Business | Jam-packed

Chinese EV-makers are leaving Western rivals in the dust

They have shone at Beijing’s car jamboree

A traffic jam at a crossroad in the city centre of Beijing.

To gird yourself for Auto China 2024, a nine-day motor show which ends on May 4th in Beijing, get there by car. On the opening day, navigating the human traffic eager to glimpse the mechanical marvels on display required the same tenacity as negotiating the Chinese capital’s gridlocked roads. Helpfully, the ride to the venue is also useful preparation for understanding the intense competition gripping China’s car industry—which the jamboree itself further underscores.

Both on Beijing streets and at the motor show, most of the vehicles are electric. And Chinese marques, some more familiar to overseas visitors than others, and local technology champions such as Huawei and Xiaomi, better known for gizmos you carry than those that carry you, are edging out the foreign manufacturers that once dominated the domestic market.

China’s carmakers are launching new models more quickly, and much more cheaply, than rivals abroad. Bernstein, a broker, reckons Chinese evs can cost half as much to buy as European ones, while boasting better tech. In Beijing, Ji Yue, a three-year-old joint venture that combines the carmaking skills of Geely, China’s second-biggest carmaker, and the tech chops of Baidu, the country’s biggest search engine, showed off a stylish saloon that can be entirely controlled by voice commands and a touchscreen. It plans to sell the cars in China and abroad for $30,000 apiece. Prices for Xiaomi’s su7, another handsome model brimming with clever technology, start at roughly the same level. The smartphone-maker has received more than 75,000 orders for it in one month, half its planned production for the year.

Western firms that rely on China for a big slug of revenues and profits are desperate to catch up. On the eve of the show Volkswagen, whose mass-market vw brand was last year surpassed as China’s most popular by byd, a local rival, unveiled a new China strategy. The German giant wants to bring new evs to market 30% more quickly and 40% more cheaply. But its plan relies on working with local partners such as Xpeng, an all-electric startup. On April 28th Elon Musk, boss of Tesla, turned up in Beijing to sign a deal with Baidu to acquire its mapping data. The deal is meant to allow the American ev pioneer to make its self-driving system available in China, and lure back tech-obsessed Chinese buyers who are shunning Teslas in favour of cleverer, cheaper local alternatives.

One thing that could slow the Chinese car industry’s breakneck expansion is a brutal price war. Steep price cuts in China contributed to Tesla’s falling sales and profits in the first quarter. On April 29th byd, which has also been offering deep discounts, reported rising sales compared with a year ago, but a big miss on revenues. If this leads to a shakeout in the industry, fewer companies will jostle for space at Auto China 2025, to be held in Shanghai. Just don’t expect smaller crowds.

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来源：一天一篇经济学人

中国电动车遥遥领先全世界 | 经济学人（五一放假，泛读一周）

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