China’s electric-vehicle industry is growing at a rapid rate despite efforts by European Union and American policymakers to curb Chinese EV sales. Automakers from China still dominate the global EV industry in terms of sales, and some have even surpassed electric-vehicle giant Tesla in the Chinese market.
Massive subsidies from China’s government have also allowed local EV makers to flood foreign markets with more affordable electric vehicles. These companies delivered more than 130,000 battery electric vehicles (BEVs) to foreign markets in the third quarter of the year, more than four times their sales in the same quarter last year.
China currently holds 58% of the worldwide BEV market and has significantly surpassed the United States, which has a 12% market share, market research firm Counterpoint says. This is even though policymakers from the West have been erecting policy roadblocks to block the proliferation of Chinese electric cars in foreign markets.
BYD is now at par with Tesla on the global stage and was responsible for a whopping 17% of global passenger battery electric vehicle sales in the third quarter, a 13% increase from its sales in third quarter 2022. Furthermore, Counterpoint expects BYD to outsell Tesla in the fourth quarter of this year to become the world’s bestselling electric-vehicle brand.
Counterpoint research director Jeff Fieldhack notes that the surge of low-cost battery electric vehicles from China into foreign markets, especially the EU, is impacting domestic carmakers. With many customers opting to buy the more affordable Chinese EVs, European automakers often have no choice but to cut their prices which can in turn reduce their already thin profit margins in the EV segment.
Senior analyst Soumen Mandal predicts that the U.S. and European Union will invest heavily into building local supply chains for essential battery minerals to limit their reliance on China and make BEVs more affordable. EU member nations such as France have also passed policies that would require vehicles to source their components from local suppliers or suppliers from allied nations to access subsidies and incentives.
In addition, the U.S. has passed policies that will prioritize EV brands with locally sourced raw materials. EU leaders have also launched a probe into low-cost EVs from China, alleging that Beijing is using state subsidies to artificially lower EV prices and make Chinese EVs more attractive to cost-conscious consumers.
These are just a few of the initiatives launched by the West to bolster their automakers and prevent Chinese firms from taking over their markets. In the meantime, however, the Chinese electric-vehicle industry is making significant strides overseas.
As the global EV market becomes even more competitive, manufacturers such as Kandi Technologies Group Inc. (NASDAQ: KNDI) will have to work triple hard to win and sustain market share in regions where they haven’t got a foothold yet.
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