An XPeng Inc. G9 electric vehicle at the Shanghai Auto Show in Shanghai, China, on Monday, April 24, 2023.
Qilai Shen | Bloomberg | Getty Images
Global electric vehicle manufacturers are leveraging advanced technology to compete with both each other and domestic brands in the fiercely competitive Chinese market.
China, the largest EV market in the world, saw 5.9 million units sold in 2022, accounting for 59% of global EV sales, according to Canalys. Data from Counterpoint Research revealed that domestic brands hold an 81% market share in the Chinese EV market, with BYD, Wuling, Chery, Changan, and GAC as key players.
“China’s domestic brands are leading the market in the development and implementation of advanced assisted driving systems, capitalizing on their early-entry advantages in the electric and intelligent vehicle sector,” stated research firm Canalys in a recent report.
“These brands have a competitive edge over other joint ventures when it comes to planning and implementing smart assisted driving systems.”
In a May report, BofA Securities predicted that China will still hold the title of the world’s largest EV market in 2025, with a 40%-45% market share.
“China’s auto manufacturers are accelerating the platform and technology upgrade or innovation, resulting in an exceptional user experience. Chinese EV products have become much more competitive than before, and we believe EV penetration will continue to expand in China,” explained BofA Securities analysts.
However, global players are now intensifying their efforts.
Last Friday, BMW China announced that it is accelerating the development of hands-free autonomous driving features, also known as Level 3 or L3 functions. BMW China aims to introduce these features by the end of 2023 or early 2024 while ensuring compliance with local regulations.
L3 autonomous driving has not yet been widely approved in China, although some companies like domestic EV maker Xpeng have been authorized to test this technology.
“The Chinese market is growing at an unprecedented pace. Toyota will also work together as a group to reform how we work & think to survive in China.”
Tatsuro Ueda
CEO of the China Region, Toyota
Last week, Germany’s Volkswagen Group announced an investment of approximately $700 million in Xpeng, acquiring a 4.99% stake in the company.
“We are now accelerating the expansion of our local electric portfolio and at the same time preparing for the next innovation step,” stated Ralf Brandstätter, a board member of Volkswagen AG for China.
Volkswagen and Xpeng will collaborate on the development of two new EV models that will incorporate advanced driver-assist software specifically for the Chinese market. These models are expected to be released in 2026.
Intense competition
For example, BYD is partnering with Nvidia and Horizon Robotics to develop autonomous driving technology. Chinese automaker Leapmotor recently unveiled a new platform and intends to license it to other automakers for the production of intelligent EVs. On the same note, Japanese automaker Toyota declared its commitment to enhancing its EV technology development to compete in the Chinese market.
“The Chinese market is growing at an unprecedented pace. Toyota will also work together as a group to reform how we work & think to survive in China,” stated Tatsuro Ueda, CEO of China for Toyota.
“By promoting local development… we will strive to develop and deliver competitive products that cater to the fast-changing demands of Chinese customers.”
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