Tesla, Chinese start-ups eclipse Toyota, VW in the world’s largest EV market as buyers focus on cutting-edge technology
- VW sold just 1,267 ID.4 Crozz SUVs between January and May, while Toyota fared even worse, selling a mere 327 units in the same period
- Tesla delivered a combined 33,463 units of its Model 3 sedans and Model Y SUVs in May, while Xpeng and NIO, set monthly sales records in June
Established carmaking giants have got off to a bumpy start in their campaign to tap China’s accelerated pace of electrification, with sales of their new battery-powered vehicle models hitting a stumbling block.
VW, a perennial leader in the mainland’s automotive industry, reported sales of just 1,267 ID.4 Crozz SUVs in the first five months of this year, less than 4 per cent of Tesla’s sales in May alone. Toyota, on the other hand, delivered 327 units of its C-HR EV SUV from January to May.
Both electric-powered SUVs are priced between 200,000 yuan (US$30,850) and 300,000 yuan, a segment dominated by Tesla’s Shanghai-made Model Y, which hit the mainland market on January 1, after the US carmaker priced it 30 per cent lower than its presale quotation.
Other carmakers also suffered setbacks as their new models failed to live up to their high expectations.
“Sales by the conventional carmakers were disappointing,” said Peter Chen, an engineer with car component company ZF TRW in Shanghai. “Young drivers are focusing on the smart features in those high-end EVs. They cannot compete against Tesla and the start-ups in software development.”
The Swiss bank UBS has predicted that EV sales in China would jump nearly sixfold to 6.6 million vehicles in 2025, up from 1.17 million units last year.
Hou Yan, 35, a white-collar executive in Shanghai, said autonomous driving system, in-car entertainment devices and driving range are the three main elements that she would assess before picking up a model to buy.
Tesla, despite a series of setbacks in China, which arose from concerns about the safety and quality of cars, is the runaway leader in the mainland’s high-end EV segment.
In May, the California-based carmaker delivered a combined 33,463 units of its Model 3 sedans and Model Y SUVs made in its Shanghai Gigafactory, up 30 per cent from 25,843 units in April.
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Both Xpeng and NIO, Tesla’s Chinese rivals, set monthly sales records in June.
Industry executives believe that conventional carmakers will eventually catch up with the new players that focus solely on smart EVs.
“They have just started to study and design intelligent electric vehicles for the Chinese drivers,” said Holly Lei, president of Covestro in China, a supplier of polymer products to major car assemblers. “Piggybacking on their experience and network here, they will be able to develop some bestselling models in the coming few years.”
