When it comes to producing electric vehicles (EVs), China has come out on top. Until recently, this Asian powerhouse was little known for its car manufacturing capabilities, but in recent years, several new automakers have emerged and become a major force in EV production. Companies such as BYD have already made a name for themselves around the world, but other smaller players are quickly emerging to rival the international names by producing competitive, low-cost EVs. With more companies showcasing EVs in Singapore this month, China is showing the world that there is still so much more it can do.
The Chinese government has pumped billions of dollars into the renewable energy and clean tech sector over the past few decades, positioning itself as a superpower in green energy and related technologies. This has extended to the EV industry, where China now dominates the EV battery and semiconductor supply chain globally. While the country was previously less known for its automotive manufacturing capabilities, public investment and financial incentives have enabled Chinese companies to rapidly develop EV production skills and become highly competitive at a global level.
More Chinese EV brands are launching in Singapore this month, with others expected to follow. Geely-owned luxury EV brand Zeekr has launched a premium SUV known as the Zeekr X, with prices starting at $150,604. Xpeng Motors entered the Singapore market with a pop-up space, showcasing the Xpeng G6 electric SUV. Several other Chinese EV makers, including GAC Aion and Chery, have also launched models in Singapore.
“As Singapore continues its transition to EVs, we see an appetite for EVs that go beyond simple transportation to offer a premium driving experience with the convenience to enhance urban living,” said Mars Chen, vice president of Zeekr. “We expect our launch will expand our footprint across Southeast Asia and beyond,” added Chen.
Singapore is a popular market for China due to its thriving economy and generous incentives for EV adoption. Last year, the government announced it would extend the EV early adopter incentive scheme by two years to 2025, offering EV buyers a 45% discount on the mandatory additional registration tax. The country aims to phase out diesel cars and taxis from 2025 and internal combustion engine cars from 2030, with all vehicles powered by clean energy by 2040. EV adoption in Singapore has surged in recent years, with about one-third of cars sold in the first half of this year being EVs, nearly double the figure for 2023.
In addition to luxury EV offerings, several Chinese companies are producing very competitive, low-cost EV products that rival models from several well-known international automakers. US and EU automakers are finding it increasingly difficult to produce EV models that can compete with Chinese products on price, especially since many of the parts needed to manufacture EVs are made in China. China is home to some of the most innovative EV technologies and sources many of the critical minerals needed to manufacture batteries and other components, allowing automakers to produce vehicles cheaply. Additionally, the Chinese government is offering a wide range of financial incentives to EV manufacturers to ensure that China becomes a major force in the global EV market. In the EU, Chinese-made EVs often sell for 20% less than EU-made models, making it difficult to compete.
In Q4 2023, Chinese EV manufacturer BYD sold 525,409 EVs in international markets, overtaking Tesla to become the world's largest EV company. This is quite impressive considering that China has narrowly lost the title of world's largest auto exporter to Japan, but until recently was largely unknown for car production. China's EV market share in the EU will rise from 0.5% in 2019 to 8.2% in 2023 and could reach 20% by 2027.
China's growing EV exports are also spilling over into other industries, with Chinese automakers clamoring for more ships to export EVs. China currently has the eighth-largest fleet in the world with 33 car carriers. But it could jump to fourth place by 2028 as the government seeks a major expansion to meet rising demand for EV exports. Chinese companies have ordered 47 vessels, accounting for a quarter of global orders. “Once this fleet is delivered to China, the Chinese-controlled car carrier fleet will jump from 2.4% today to 8.7%,” said Andrea De Luca, an analyst at shipping consultancy Veson Nautical. De Luca added, “We expect new trade routes to be established almost exclusively for Chinese OEMs (automakers).”
China has quickly come to dominate the global EV market, and it shows no signs of slowing down anytime soon. As big-name European and US automakers race to produce better, more affordable EVs to meet growing global demand, China continues to come out on top. Thanks to years of investment in critical mineral mining, battery production, and clean technology innovation, China now has easy and affordable access to key EV components that its competitors don't have. This accessibility, combined with extensive government incentives for EV manufacturers, is fueling a production boom that's helping Chinese automakers take the lead in the global EV market.
Article by Felicity Bradstock of Oilprice.com
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