Will Chinese Electric Cars Become Real Competition For Tesla?

NOV 7 2018 BY EVANNEX 11


Electric vehicles are gaining traction in China. Daniel Ren (via South China Morning Post) writes, “While US maker Tesla often grabs the headlines… BYD and peers like Beijing Auto and Roewe are quietly selling enough electric vehicles (EVs) to make China the world’s largest market for both electric and conventional vehicles. In fact, sales of EVs in China reached 770,000 units last year.”

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Tesla is capturing the attention of Chinese car buyers (Image: Quora)

Peter Chen, a Shanghai-based engineer with TRW says that electric cars remain “a key industry where the government wants to develop its own players to be world leaders.” Beijing wants China’s domestic carmakers to sell an ambitious three million EVs a year by 2025.

“As bold as Beijing’s vision is, however, catching up with the likes of Tesla and achieving the plan’s goals will not be easy,” writes Ren. In China, he contends, “EV makers focus on the low-price market… [and] there are also issues with battery technology that limit the range of domestically made EVs.”

It’s reported that, “Most of China’s indigenous EVs have driving ranges of below 300km (186 miles), compared to Tesla’s 500km (311 miles), because of battery limitations. Chinese-made batteries are relatively heavier and bigger than those of their foreign rivals because of the less sophisticated design of their cells. To make them lighter, Chinese makers have to cut the number of cells, thus reducing a car’s range.”

Above: The US, EU, and Japan have a high density of EV charging stations, while China’s infrastructure is spread out (Source: South China Morning Post)*

“Chinese EVs are still several years behind the global leaders in terms of technologies,” says Cao Hua, a partner with private equity group United Asset Management. “The limited driving range and the lack of [public] charging stations are still the major stumbling blocks to the rise of China’s EV sector.”

To that end, Davis Zhang, a senior executive at energy-solution provider Suzhou ­Hazardtex points out, “an urgent need for more concerted action between the central and local governments and car manufacturers to map out a plan for EV charging.”

In addition, China’s home-grown electric car sector could face competition on their own turf. Tesla recently “signed a deal with Shanghai authorities in July to build its first factory outside the US, with an annual capacity of 500,000 cars. That would double the size of its global manufacturing and help lower the price of Tesla cars sold on the mainland.”

Above: Tesla’s Gigafactory 3 will in Shanghai (Youtube: South China Morning Post)

And Tesla’s lower-priced Model 3 could turn out to be a hit in China. “The competition will be cutthroat as production volume jumps in the coming years,” explains Nomura’s auto analyst Joseph Wong. “Foreign brands will ratchet up pressure on Chinese home-grown brands as they are able to make better products.”

That said, “Some of the more bullish industry executives predict that one-fifth of vehicle sales on the mainland, or about 6 million units, will be of green cars in 2023.” And many more are betting on EV growth in China. Companies like China’s BYD have backing from American billionaire Warren Buffett.

A sea change could be underway in the automotive sector. China’s tech-saavy youth are becoming disenchanted with fossil fuel powered cars. He Kun, chief executive of DialEV, says that millennials in China “have different views as vehicles become electric and intelligent, and companies need to react quickly to meet their demands… We are in a new internet era and it is time to build new generations of cars.”


Source: South China Morning Post; *Map displays EV charging stations depicted on Open Street Maps (OSM) as of mid-October 2018

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

Categories: BYD, Tesla


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11 Comments on "Will Chinese Electric Cars Become Real Competition For Tesla?"

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Tesla is not the competition, they are the inspiration. More EVs, up and down the price, capability and quality spectrum aren’t going to erode Tesla sales, they are going to displace ICE vehicles. There won’t be any shortage of buyers. The hockey stick is upon us.

Well said.

Boy, upwardly-mobile Chinese can’t be beat when it comes to fetishizing foreign goodies. Singapore is full of them, bidding insane amounts in the national auction for driver’s license numbers because they want the lucky numbers on their Rolls-Royces. So yes, it’s very possible Teslas will become the new fetish over there. These are, after all, the people who saved Buick from oblivion for no adequately explained reason.

Tesla entering the Chinese market with building cars in China will keep Tesla ahead in the segment for quite a while. This is due to Tesla’s advanced innovations in EV technology and aggressive push for more innovations. I also think the early days of Tesla giving away technology is over, with the focus now on earning an acceptable level of profitability to maintain market value. I also think it’s smart of Tesla to launch the Model 3 and Y initially in China, since the higher volume of both vehicles will help lower costs, and make adoption and sales even higher. My guess is that the next gen S and X will be manufactured there as well.

Tesla will remain the benchmark for EVs in the world for many years, with Chinese manufacturers helping with increasing adoption.

Tesla will have the aura of ‘premium foreign brand’. Enough nouveaux riches to sell a boatload of cars.

I do think that China will be a major competitor in 5-10 years time – especially if North American manufacturers continue to lack commitment to EVs. Look what has happened with things like phones. Yes, the iPhone is still the king, but there’s an awful lot of good competition for it now, especially within China. Within China itself, I suspect Tesla will still be the halo company – the one to have – but the local developments there will continue to get better and better. BYD seems to be doing a pretty good job, and their products really aren’t bad. I think to a certain extend we need to pay attention at the rate of improvement rather than the current state of things.

“Yes, the iPhone is still the king,” and where is it manufactured? (Not USA)

I guess it will be manufactured soon in Wisconsin.

Maybe in China, but not in the US or most of the EU. Two words Hover Board.

Thats some amazing spin journalism, truely worthy of SCMP’ reputation.

– China sold half the planets EVs and BYD lead the world for the last 3 years
– Those Chinese EVs with “only 300km range” cost less than $40k, maybe having less batteries than a $80k car is not just due to weight?
– Chinese CATL is the worlds largest battery producer and contrated to power literally all European luxery brands
– China’s NIO has the worlds fastest EV in Nurnburg, Tesla cant go halfway without overheating
– China has more than 2 million EV charging stations and you can find them at most gas station in major cities, you kinda have to if you sell half the planets EVs and most drivers live in apartments, so maybe OpenStreetMap dot density at low zoom isnt the most scientific data source?

Tesla isnt the competition, Tesla is a nice company with decent sales, but its not even close to being comparable to China.

Not to mention Tesla sales in China collapsed since tariff kicked in, and Beijing hasnt approved their factory yet. At this rate Tesla is on track to be as successful as Ford’s F150

China new light vehicle sales are 30 million and the Chinese government is requiring the number of EV’s sold in China to increase each year. So there’s plenty of room for Tesla. Once they have the factory built they’ll sell every vehicle. Since the factory will only produce 300,000 EV’s a year. They’ll have a waiting list of hundreds of thousands.