President Xi Jinping’s ambition to advance China’s electric vehicle industry as the world’s top exporter came true. However, walls are starting to build up after the country’s ten years of dominance, Bloomberg reports.
China became the world’s largest auto market owing to its strategic initiatives
As President Xi indicated in his speech ten years ago, developing new energy vehicles (NEVs) is the way to becoming a leading country in the automotive industry.
The Chinese President further noted that securing a “high ground” in the industry is the “key” to winning the global competition.
In 2014, China’s NEV sales reached approximately 75,000 units, while its car exports totaled around 533,000 units. At the time, foreign players, including Germany’s Volkswagen and America’s General Motors, dominated the local market. They penetrated the Chinese market through joint ventures with local companies in the 1980s and 1990s.
To further advance the country’s shift to clean mobility, the Chinese government promoted fuel-efficient and alternative energy vehicles through a 2012 guideline. Under this policy, China implemented strategies to solidify the NEV industry, such as setting sales targets, offering subsidies, and investing in charging infrastructure development.
President Xi’s speech two years later demonstrated the country’s commitment to overthrowing traditional Western and Asian auto powerhouses, especially Japan.
Despite these strategic measures, China still needed to stimulate EV demand. In the early 2010s, customers were interested in affordable yet short-range models.
America’s Tesla reportedly benefited from this EV push, which became the first-ever foreign brand to establish a local operation in China. In 2019, the Musk-led company completed its Giga Shanghai. This significant advancement urged local companies to develop competitive models with longer driving ranges.
In 2024, China finally became the largest auto market in the world. It now sells more new energy vehicles than any other country. Last year, it delivered a whopping 9.5 million cars globally.
In addition, BYD successfully beat Volkswagen as the top-selling brand in the Chinese market and Tesla as the world’s top-selling EV producer in Q4 2023.
Moreover, China surpassed Japan as the top auto exporter in the world. It exported 4.14 million cars, with NEVs accounting for 1.55 million units.
Trade tensions intensify as domestic EV market booms
China’s remarkable success in the electrified vehicle industry continues to threaten Washington and Brussels.
Chinese companies struggle to compete in certain foreign markets due to trade barriers, particularly in the US and the EU. Both markets accuse China of exporting its excess electric vehicle capacity.
The US government recently imposed a major price hike from 25% to 100%. Meanwhile, the EU is currently probing against China-made EVs over unfair subsidy concerns.
In effect, the Chinese government warned of possible retaliation. China’s Chamber of Commerce disclosed on May 22 that the country is considering increasing import tariffs on cars with large engines from 15% to 25%, potentially affecting Mercedes-Benz and BMW.
Meanwhile, the EU set June 5 as the deadline to release preliminary findings and determine the possibility of new tariff imposition against Chinese EVs.
SAIC bets on innovations
SAIC executives, including Chief Engineer Zu Sijie, said during an event marking the 10th anniversary of Xi’s speech on Friday that they recall the Chinese President’s instructions well.
It apparently pushed the Chinese company to continuously develop new technological innovations, including autonomous driving and connected vehicles.
SAIC-owned battery startup SAIC Qingtao New Energy Technology’s co-founder Li Zheng even asserted that solid-state battery development progress would be crucial to the country’s sustained dominance. For context, these innovative batteries deliver high energy density and lower fire risks.
“New-energy vehicles have become a strategic industry, fiercely contested by countries around the world. They’re a key supporting force to our country’s revitalization of green sectors.”
Li Zheng, SAIC Qingtao New Energy Technology Co. co-founder
Indeed, many changes can transpire in a decade. Nonetheless, SAIC’s investment of around 50 billion yuan ($21 billion) into its Research and Development efforts over the past ten years can enable the company to remain competitive through 2034 despite the intensifying trade barriers.
