In the last decade, China has witnessed a strategic shift towards global dominance in the electric vehicle industry.
This trend was clearly demonstrated – according to Bloomberg – 10 years ago during President Xi Jinping’s visit in 2014 to the headquarters of SAIC Motor Corp., one of the largest automakers in China, where he pointed to the importance of developing new energy vehicles as part of China’s ambitious campaign to achieve global status. In the electric car sector.
Bloomberg quotes Xi’s speech from a report by Xinhua News Agency, in which he said, “The path to becoming a strong country in the automobile industry lies in developing new energy vehicles.”
From humble beginnings to global leadership
According to Bloomberg, the Chinese market has been witnessing steady growth since it entered the sector, with about 75,000 electric and hybrid cars sold locally in 2014, with about 533,000 exported in the same year.
Foreign automakers, such as Volkswagen and General Motors, have been dominating the Chinese market through joint ventures.
Bloomberg notes that this international influence was crucial in transforming China from “a country that rides bicycles to a country that drives cars.”
However, domestic brands without foreign cooperation were considered inferior in terms of technology, according to the agency.
Strategic shifts and entry of Tesla
Bloomberg notes that China’s strategic pivot to focus on fuel-efficient cars and alternative energy was supported by guidelines published in 2012, which paved the way for Xi’s influential speech two years later.
The agency states that Tesla’s entry into the Chinese market in 2019 represented a major transformation in the sector, as it was the first foreign car manufacturing company to establish a comprehensive operations factory for electric cars in Shanghai, China, which stimulated local competition and pushed Chinese brands to further innovate in the field. Electric cars.
China’s electric vehicle market expands
By 2024, China has emerged as the world’s largest auto market topping electric vehicle sales, with 9.5 million vehicles delivered last year alone, according to Bloomberg.
Bloomberg notes that China now controls the majority of the battery supply chain for electric cars, outperforming traditional auto giants.
In the last quarter of 2023, BYD, a local Chinese company, overtook Volkswagen and Tesla, becoming the largest producer of electric cars in the world.
Trade tensions
China’s rise in the electric car market was not without challenges. While Chinese automakers are seeking new markets due to the price war at home and slow growth, they face significant trade barriers in the European Union and the United States, Bloomberg says.
The two regions accused China of exporting its excess capacity, which led to escalation of trade tensions, as the United States, for example, quadrupled customs duties on imports of Chinese cars, reaching more than 100%, and at the same time, the European Union is inspecting cars. Chinese Electrical, in search of possible unfair advantages obtained through government support for the sector.
Beijing’s reaction and future prospects
In response to these international pressures, Beijing threatened to take retaliatory measures, and according to Bloomberg, the Chinese Chamber of Commerce with the European Union indicated that customs duties on imports of large-engined cars may increase to 25% compared to 15%.
These trade disputes highlight the geopolitical complexities surrounding the global electric vehicle market.
Over the past decade, China’s investments in the electric vehicle sector, which amounted to about 150 billion yuan ($21 billion) – according to American estimates – in research and development, have led to the redefinition of the automobile industry and its position as a leader in the global shift towards environmentally friendly means of transportation.
Despite the backdrop of international trade tensions, China’s vision for the future of the auto industry remains ambitious, with continued leadership and innovation expected into 2034 and beyond.
