China’s Car Makers Readying to Flood the West with Cheap EVs

Do you drive a China-made electric vehicle (EV)? If the answer is “no” then Beijing would like to think one day you will have little choice but to answer “yes.”

Such is the quiet confidence of Chinese automakers that they have the products and manufacturing power to flood the west with their cars, company executives affirmed Friday at the Beijing motor show.

AFP reports the bullish prospects for growth came despite a slowing global market and mounting Western legislative pressure looking to stop China’s EV drive in its tracks even as China stands as the world’s largest producer of cars while vying with Japan to be the biggest exporter of vehicles.

A model of the Huawei Technologies Co. electric vehicle charging station during the Beijing Auto Show in Beijing, China, on Friday, April 26, 2024.Global demand for electric vehicles, heightened trade tensions and questions about whether Western legacy automakers can interest Chinese consumers will be the talk of Beijing as executives from top global car marques descend on the capital for the Auto China show. (Qilai Shen/Bloomberg via Getty)

Electric vehicles accounted for about 25 percent of recent Chinese auto exports, and more than half of those were created by Chinese brands, a shift from the traditional assembly role China has played for foreign automakers.

The European Union launched an investigation last year into Chinese state EV subsidies, which it said had given companies from the country an “unfair” leg up in the local market.

The AFP report notes Brussels — along with allies in Washington — has raised fears that Chinese industrial “overcapacity” created by excessive state subsidies could see global markets flooded with cheap Chinese EVs.

This aerial photograph taken on April 16, 2024 shows electric vehicles for export stacked at the international container terminal of Taicang Port in Suzhou, in China’s eastern Jiangsu Province. (STR/AFP via Getty Images)

“We certainly hope that there won’t be an introduction of tariffs. I think it is not good for consumers,” said William Li, CEO of Nio, an EV manufacturing giant in China.

“Every place, region, and country has some consideration for protecting employment in their own industries,” he said.

“This is a reasonable demand, but we still hope to return to common sense.”

Brian Gu, president and vice chairman of EV giant XPeng, told AFP his company is also determined to make headway into Europe as other makers look to begin manufacturing in Mexico as a way to gain proximity to the U.S. market.

He compared the obstacles Chinese firms are now facing to the similar hurdles European giants such as Volkswagen faced when entering the Chinese market in the 90s and 2000s.

“We may have to think about creative strategies, we may have to form relationships and partnerships. Maybe Chinese players have to do the same in order to compete, and I think there’s no shortcut,” he said.

“We may have to do all of that to remain a player, a leading player, in Europe. So we’re prepared to do that, for the long term-market and long term opportunity there.”

One area in which Chinese automakers handily beat Western competitors is on price, thanks to government subsidies that supported the industry’s initial rise as well as cheap access to critical minerals and components such as lithium-ion batteries, which account for about a third of the overall cost of production, the Los Angeles Times reports.

So when manufacturing capacity reaches peak levels alongside competitive prices, China’s EV makers say they have every reason to feel confident of one day dominating the entire global market while pushing competitors to the curb.

He Xiaopeng, the CEO of XPeng Motors, last month predicted a “bloodbath” against America’s auto industry with the help of cheap China-made electric vehicles (EVs) is already on the way, as Breitbart News reported.

China seeks to deliver a “brutal knockout round” against its Western competitors, including the U.S., in the global EV market, Xiaopeng added.

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