Bloomberg headline: China’s Love of Local EVs Is Bad News for Foreign Carmakers
Sub-headline: Buyers in the world’s biggest electric vehicle market are overwhelmingly shifting toward homegrown brands.
The one exception to Chinese dominance is Tesla Inc., which ranks third this year in NEV retail sales, with a 7.5% market share. It’s the only foreign carmaker allowed to operate in China without a local partner, one of the many concessions Elon Musk won from Beijing to open his first factory outside the US. But Tesla’s high-tech halo, and Musk’s star power, may not be enough to keep the company from the criticisms that once-lauded foreign brands such as Nike Inc. or H&M Group have faced recently. Last year the Chinese government summoned executives of Tesla’s local unit to discuss what they said were quality and safety issues in Tesla vehicles and banned the cars from entering some government facilities over concerns they could send data to the US.
Domestic brands’ main advantage is price, according to PCA Secretary General Cui Dongshu. In a country where many people are still buying their first car, cost is a key consideration. One of the most popular EVs in China is SAIC-GM-Wuling Automobile Co.’s pint-size Hongguang Mini, which starts at just $4,700. (It’s considered a domestic brand because General Motors Co.’s stake is less than 50%.)
Other Chinese carmakers are also taking steps to differentiate themselves. Hozon targets families in smaller cities and rural areas with sedans that are a step up from the Hongguang Mini but still carry a wallet-friendly starting price of less than $12,000.