Automakers must catch up to China's EV startups

Automakers must catch up to China's EV startups

Electric vehicle adoption in China continues to rise as local automakers change consumer perceptions.

China's booming electric vehicle market was sparked by policies meant to boost EV sales. Bloomberg notes that this is no longer the case and that car manufacturers are building EVs with their own appeal.

Xpeng, Hozon, Li Auto, Nio, Leap Motor, and WM Motor sell nearly 150,000 EVs each quarter, a 10x increase since 2020.

Focusing on digital services, in-car connectivity, and customer service has helped EVs in China. Companies know local subsidies won't last forever and that their vehicles must thrive without them.

Foreign automakers are scrambling to respond to China's EV boom. In 2020, foreign automakers (through joint ventures; China allowed full overseas ownership of manufacturing sites this year) 

Had a 61% share of the Chinese car market; in 2022, that has dropped to 49%. Chinese automakers are expanding in international markets like Europe.

MG Motor sold 40,000 EVs in Europe last year, and Nio, Xpeng, and BYD are also launching cars. In the coming years, other automakers will expand internationally.

China said 25% of passenger vehicle sales by 2025 would be new-energy vehicles in 2019. This shows how quickly local EV startups have grown.