Fierce Competition within China's EV Market
2019-01-18 15:03 Friday
According to the China Association of Automobile Manufacturers, the production and sales of China's new energy vehicles in 2018 has reached 1.05 million and 1.03 million units respectively, a year-over-year increase of 63.6% and 68%. As the Chinese new energy vehicle market enters the "post-subsidies" era, higher requirements for cruising range, battery energy density, vehicle cost, and price will emerge.
Bloomberg Finance estimates that by 2025 China's market for electric vehicles will top 5 million EVs; the U.S. is expected to sell around 2 million in the same year. And that's why Tesla is fighting desperately to gain a strong foothold in China by borrowing about $1.3 billion for building a plant in Shanghai.
Tesla is not alone as the rise of China's local EV producers. Xpeng Motors, backed by Alibaba Group Holding, is the latest competitor Tesla has to confront with. The Guangzhou-based company's first mass-produced model, G3 sports utility vehicle has a floor price of 227,800 yuan (US$33,150) before subsidies. And the basic G3 version costs only 135,800 yuan after subsidies, which is far more economic than Tesla's Model 3.
WM Motor and NIO, two other Chinese EV competitors backed by Tencent Holdings and Baidu respectively, rolled out their new models earlier this year. NIO has delivered over 3,000 vehicles and is expected to deliver between 6,700 and 7,000 in the fourth quarter of 2019. WM Motor targets annual deliveries of 10,000 by year end.
Geely Automobile Holdings and Contemporary Amperex Technology (CATL) form a joint venture company to produce and develop vehicle batteries for new energy vehicles. The new joint venture will be called CATL Geely Power Battery Company and the partnership will include research and development, production, and sales of batteries, battery modules, and battery packs. The registered capital for the new company will be 1 billion RMB, funded by the two companies.