EVs look set to give China a foothold in U.S. auto market
EVs look set to give China a foothold in U.S. auto market
Get set for Xpeng, Nio, Geely, Hengchi and other nameplates you've never heard of.
(A native of England, Matthew Diebel is a veteran journalist who has worked at NBC News, Time, USA Today and News Corp., among other organizations. Having spent his childhood next to one of the world's fastest bodies of water, he is particularly interested in tidal energy.)
iPhones. Underwear. Instant Pots. Yup, it seems like almost everything we buy is “Made in China.”
But, so far, not cars. That, however, may be about to change — and electric vehicles may be a large part of the reason.
The biggest hint so far comes from Europe, which has begun importing Chinese cars — especially EVs — in large numbers, which took about three-quarters of China’s electric car exports, with much of the rest going to other parts of Asia.
Overall, according to Bloomberg, car manufacturers in China shipped $1.2 billion worth of electric passenger vehicles, up 122% from a year earlier. Part of the impetus is a fall in domestic sales caused in part by Covid restrictions, leading Stephen Dyer, managing director at Shanghai-based consultancy AlixPartners, to predict exports will continue to be significant.
Part of the growing tide also is due to price — Chinese manufacturing costs are much lower than in Europe and the U.S.
That, and the fact that a flood of Chinese EV manufacturers has emerged, as we reported last year. There’s Xpeng Motors (XPEV), which is set to have three huge factories. And another company, Nio (NIO), has opened a large factory, with construction starting on a second. Meanwhile, there’s Zhejiang Geely (GELYV), owner of Volvo (VLVLY), which in 2021 debuted an enormous EV factory that rivals some of the world’s largest assembly plants. Also a contender is Hengchi, a division of Shenzen-based Evergrande (EGRNF), which has electric-car factories in Shanghai and Guangzhou, with a pledge to make almost as many electric cars by 2025 as all of North America.
Not widely known is that Tesla (TSLA) also has a large manufacturing base in Shanghai, which, though it now mainly caters to Asian and European audiences, is primed to export to the U.S. In fact, according to InsideEVs.com, Elon Musk’s enterprise is planning to double the size of his Gigafactory Shanghai to enable it to add 450,000 vehicles to the plant’s annual output and make it, in Tesla’s words, “the world's largest vehicle export hub.”
Detroit is watching.