Since China’s 2015 national strategic plan to further develop their manufacturing sector (otherwise known as Made in China 2025), China aims to produce high-tech products and services like AI, robotics, green energy, and green vehicles. Specifically, China’s ambitious plan to revolutionize its automobile industry involves excluding conventional cars from service and only manufacturing sustainable energy cars. This plan is set to begin in 2035. Their change in strategy is gaining momentum, largely due to substantial funding from the government, tech companies, OEM’s (Original Equipment Manufacturers), and financial investors throughout China. In this article, I will analyze the early years of the EV and AV industries in China and compare them to their contemporary situation. Lastly, I will summarize with some fresh conclusions about the future of the Chinese automobile industry.
As China reformed and opened up (改革开放) to the international community in the late 1970s and early 1980s, new industries were established throughout China’s Eastern front. During the 1990s, as a part of a growing awareness of the climate crisis and air pollution, the electric bike industry was noticed by authorities and was thus included in the five years plan. From the 2000s onward, there was a full-scale involvement from the Chinese government in the automobility sector. The central government of China declared in 2009 that it will financially support the purchase of clean energy cars in order to develop green technology. From 2008-2009 until now, we can see a change in the worldwide car industry as the scales of electric vehicles and autonomous vehicles tend to move toward the Chinese manufacturing industry. The “Big Four” well-known and traditional manufacturers are SAIC, Dongfeng, FAW and BAIC.
Besides the aim for newer cars and high-tech achievements, the EV sector has an impact on the global climate crisis. While China’s government declared in 2012 that it wants to lead the EV sector worldwide, there are two important requirements to improve environmental roads and save energy. Although EVs can help with the climate issue, the prices of these vehicles are still quite expensive when compared to vehicles that run on fuel and pollute more frequently. However, the improvement of technology such as smaller chips, rechargeable batteries, and solar energy make the Chinese EV dream look more realistic, as well as drive down the cost of an EV. Therefore, within the next few years, it is likely that most of us will own an EV that will be more environmentally friendly, more economical, and more technologically advanced.
However, although electric vehicles are eco-friendly and more sophisticated, the battery manufacturing and supply chain are costly. This is a major barrier in making electronic vehicles a product that is accessible to the masses. The Chinese government used subsidies and provided support in battery manufacturing and supply chains to solve this problem. Moreover, China built more than 500,000 charging points around the country. This is much higher than the United States, which only built 100,000.
In recent years, there has been a significant increase in the amount and quantities of investments in EV and AV by tech companies in China. Huawei, Tencent, Baidu, and more are highly invested in the automobile sector, especially in start-ups and other technology companies that are targeting the automotive world. The amount of money that is flowing into the industry makes the Chinese EV and AV industry a central place for new technologies and pilots that create a new future of transportation, such as in deliveries, autonomous trucks, and more.
Recently, more and more Chinese car firms that have EV and AV technologies entered the global market, such as NIO, Li Auto, Xpeng, and more. Other smaller companies that function inside the Chinese auto market have also joined. The Wall Street Journal made a comparison between Tesla to Xpeng, analyzing the competition between the two and presenting their advantages and disadvantages. Both Tesla and Xpeng are giant companies combining autonomous technologies with electricity consumption and providing software and hardware on their cars. While Tesla relies on a few cameras on their automobile and generally aims to minimize the devices on their cars in order to make autonomous driving and autonomous cars cheaper, Xpeng relies on multiple sensors and LiDAR (a method for determining ranges by targeting an object with a laser and measuring the time for the reflected light to return to the receiver, it is also called “3D scanning”). This is not to say that Tesla’s vehicles do not have advanced technology, but it can be clearly seen that Xpeng invests most of its resources into the development of automotive technology. The Xpeng case is a great example to testify about the EV and AV companies in China that desire a technological interface within their smart cars.
Today, China is the largest EV market in the world. Last year the total amount of EV cars sales reached 1.3 million automobiles. Moreover, China manufactured 44% of all the EV cars that had been produced worldwide during the last decade. This year, China’s EV companies are aiming to sell about 6 million EV cars worldwide. This is a huge increase compared to recent years. Therefore, it is safe to assume that there will be significant technological advancement in the EV and AV sectors in the next few years and an abundance of opportunities for new companies and start-ups who strive to enter the automobile industry. This will change the automobile world as we know it. Besides these opportunities, it will be fascinating to see how the world changes in front of our eyes, especially in the automobile world.
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