The Inside China YouTube channel is warning about a major change that could be coming to the world of electric vehicles (EVs). The channel is operated by Mark Rainford, a Shanghai-based automotive journalist and former communications executive for Mercedes-Benz.
The channel’s most popular video, entitled “Think You Know Chinese Cars? Think Again. You Won’t Believe What’s Coming,” has garnered over 800,000 views. The video provides an 84-minute preview of the future of the automotive industry through a walkthrough of the 11 vast halls of the Guangzhou Auto Show.
Why Chinese EVs are superior
Rainford showcases cars from 42 electric car companies, most of which are relatively unknown outside China. Some of the remarkable EVs featured in the video might be considered concept cars at a Western auto show, but in China, many of them are already on the roads.
These EVs come with advanced features such as navigation on autopilot (NOA) systems, driver fatigue monitoring, and AI-equipped dashboard screens. Mainstream Asian and Western automakers contend these cars are inferior and dangerous knock-offs. In reality, they have already passed safety tests.
At the same time, Chinese EVs are also substantially cheaper than Western EVs. The typical Chinese EV is over 50% cheaper than the typical North American or Western European EV.
This is largely due to the fact that China controls the supply chains for lithium and cobalt, two of the most important metals for EV battery production. In addition to owning its own lithium and cobalt mines, China owns lithium and cobalt mines in other parts of the world (such as Africa).
As a result, China does not need to pay to import battery raw materials. It can then pass these savings onto consumers.
Tesla’s foolish neglect of China
Tesla has long ignored the threat from Chinese electric car companies. During a Bloomberg interview in 2011, Tesla CEO Elon Musk made fun of one of BYD’s early vehicles. BYD is the largest EV maker in China, accounting for 37 percent of Chinese EV sales.
During the interview, Musk condescendingly told the reporter, “I think their focus should be making sure they don’t die in China.”
However, Musk is not laughing anymore. According to Wired, four of BYD’s models were among the top 10 EVs sold globally in 2022. More recently, in the third quarter of 2023, BYD came within 1% of overtaking Tesla to become the largest EV maker in the world.
BYD is also fast expanding outside of China. In September, the company’s non-Chinese sales grew 12% in just one month.
Although Musk now acknowledges that BYD is a significant player in the industry, it may be too little, too late. BYD has had a faster growth rate than Tesla for several years now. In 2022, BYD sales grew 184% while Tesla’s sales grew just 40%. In the first nine months of 2023, BYD grew 80% while Tesla grew just 46%.
Former Chrysler executive Bill Russo notes that East Asian car makers like Toyota came seemingly out of nowhere in the late 20th century. Within just a few years, they became the best-selling auto brands in the US. He feels that Chinese companies could soon do the same in the EV segment.
Image Source: BYD Global