Overseas EV makers aim to break into China, but battery shortages loom
Global Times


Visitors gather at Tesla's booth at the 2019 World Artificial Intelligence Conference in Shanghai on August 29, 2019. (Photo: Global Times)

As Tesla CEO Elon Musk had a brisk chat with Alibaba founder Jack Ma Yun during the opening of the World Artificial Intelligence Conference (WAIC 2019), visitors swarmed to the booth of Tesla to see the black Model 3 on display. 

"Many visitors lined up for a long time to get into the car and have a look at the interior. Some even thought that it's a concept car because of the novelty of its interior design," a Tesla saleswoman who attended the WAIC 2019 wrote in her WeChat account on Saturday. 

Another employee of Tesla told the Global Times at the WAIC that Tesla plans to start mass production of its made-in-China cars this December. 

China will exempt Tesla's electric vehicles (EVs) from a vehicle purchase tax, the Ministry of Industry and Information Technology said on Friday.

Besides Tesla, other overseas car brands are also beefing up efforts to launch EVs in China. Mercedes Benz has just launched its first electric sport utility vehicle in one of its Shanghai stores. Guangqi Toyota is on the way to launch its first electric car, the iA5, during the upcoming Chengdu Motor Show 2019, media reports said. 

SAIC Volkswagen has also launched its first EV, the e-Lavida. 

"Overseas car brands have acted slowly when launching electric cars. Particularly in China, self-owned car brands have gained first-mover advantages in the electric car market, pushing overseas carmakers to speed up their new-energy vehicle (NEV) layout to keep up," Cui Dongshu, secretary-general of the China Passenger Car Association, told the Global Times on Sunday. 

Veteran car analyst Jia Xinguang also told the Global Times that a shortage of electric car battery technologies has put overseas carmakers in a tough situation in terms of NEV manufacturing. 

"Europe is taking action to build a local-based NEV industry chain. But that takes time. Until that happens, overseas carmakers want to make use of the existing NEV industry chain in China," Jia said. 

But Cui said that although the major Chinese NEV makers like BYD and BAIC Motor Corp aren't likely to be affected much by the overseas brands' move into the market, competition will get tougher for the whole sector in China and that won't be good for the smaller domestic car brands. 

"China's NEV market will gradually evolve into a battlefield among several large brands," Cui told the Global Times. 

China's NEV market weakened in July after government subsidies were scaled back, which showed that many NEV car companies in China are too reliant upon government subsidies and "didn't do their job earnestly," Jia said.

In July, 80,000 NEVs were sold in China, down 4.7 percent year-on-year and the first decline in about two years, data from the China Association of Automobile Manufacturers showed. 

Cui said this was likely just a temporary decline during a period of policy changes and the domestic NEV market would have relatively strong growth in the coming months