Despite the litany of import tariffs placed on Chinese electric vehicle exports, recent data has revealed that Chinese auto companies are making a killing. China’s EV industry is booming and some experts say that the ongoing boom is thanks to support from the West. According to one auto industry expert, China is now the largest vehicle manufacturer on the globe.
Last year, UK drivers purchased close to 100,000 cars that were manufactured in China, a sure sign that Chinese-made cars have more than ample demand in Europe. According to Tycho de Feijter, the rapid growth of China’s auto sector is thanks to Western carmakers involving themselves in the Chinese market during the 1980s and 1990s.
Tycho founded several websites that cover the Chinese auto industry such as ChinaCarHistory.com and CarNewsChina.com. Although there were some car companies in China back then, mass production was out of their skill range, and they typically produced just a few hundred cars annually. The Chinese government encouraged joint ventures between foreign automakers and the local industry to ensure domestic carmakers learned from Western carmakers, Tycho says.
These joint ventures helped Chinese carmakers learn how to mass-produce cars, and within a few years, the global vehicle market saw a surge in the number of Chinese-made Suzukis, Toyotas, and Jeeps. As the number of Western cars manufactured in China increased, local carmakers learned the vehicle design and production skills that would make China a carmaking giant over the next couple of decades.
The recent move to electrify the global transport industry also presented a significant opportunity for China’s auto industry and has significantly contributed to the growth of the Asian nation’s car sector. Tycho notes that several Chinese brands began developing battery electric vehicles (BEVs) around two decades ago at a time when Western brands could barely keep up with the rapid technological evolution.
BYD, the Chinese automaker that regularly outcompetes giant Western firms like Tesla had its start manufacturing mobile phone batteries before transitioning to producing household appliances and mobile phones. BYD spent a lot of years manufacturing batteries and this experience paid off when the firm began manufacturing BEVs.
However, even though Western support allowed Chinese carmakers to learn the skills they’d need to compete with Western carmakers, Tycho says automakers like BYD will have to prove that they are here to stay before they can truly compete with established auto brands in Europe.
As Western-based companies like QuantumScape Corp. (NYSE: QS) are working to bring to market superior battery chemistries, such as solid-state batteries, you can bet that firms in China are also working to commercialize a product to go head to head with what the West has to offer.
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