Shanghai Auto Show: foreign carmakers eye market share gains as Chinese demand for new energy vehicles surges

Name: Tesla owners in China protest against price cuts as consumers tighten budgets
Uploaded: 2023-04-27T00:00:09.000Z
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At the Shanghai Auto Show, global majors BMW, Mercedes-Benz and Volkswagen showcased only their new EV offerings and Volkswagen unveiled a development centre for electric cars in Hefei for catering to Chinese customers and “to achieve shorter time to market”

In contrast with the conventional ICE segment, domestic carmakers dominate the EV segment with a massive 81 per cent market share, and foreign brands are looking to close the gap

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Aerial view of electric cars sitting parked at a factory of Chery New Energy Automobile. Photo: Getty Images

Mia Castagnone

Published: 8:00am, 27 Apr 2023Updated: 10:43am, 27 Apr 2023

Foreign companies are scrambling to close the gap with Chinese domestic makers of new energy vehicles (NEVs) as demand remains strong in the world’s biggest car market where electrification is happening at a rapid pace.

At the Shanghai Auto Show this month, global majors BMW, Mercedes-Benz and Volkswagen showcased only their new EV offerings. Earlier in April, Volkswagen unveiled a €1 billion (US$1.1 billion) centre for development and innovation for electric cars in Hefei with the aim “to align the Group’s vehicles even more quickly with the wishes of Chinese customers and to achieve shorter time to market.”

China has seen a rapid transformation of its automotive sector toward electrification. NEVs accounted for 25.6 per cent of China’s total automobile sales last year, up from 4.7 per cent in 2019. Fitch Ratings expects electric cars to account for over 35 per cent of sales of passenger vehicles this year.

In contrast with the conventional ICE (internal combustion engine) segment, domestic carmakers dominate the EV segment with a massive 81 per cent market share, according to market research firm Counterpoint, and foreign brands are looking to play catch-up.

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Tesla owners in China protest against price cuts as consumers tighten budgets

“Selected foreign brands’ determination to revive electric-vehicle [EV] business momentum and narrow the gap with Chinese peers is clear,” said Nick Lai, the head of China equity research and head of Asia-Pacific auto research at JPMorgan.