China wants to sell cars to the world. As the country’s industry moves up the value chain, the next stop it wants to make is electric automobile exports. Jacky Wong reports in The Wall Street Journal:
Chinese electric vehicles are speeding ahead in the country in 2021. Next they may want to make inroads overseas.
Sales of new-energy passenger vehicles in China, including plug-in hybrids, have nearly tripled from a year earlier in the first 11 months of 2021, according to the China Association of Automobile Manufacturers. And that is against the backdrop of a sluggish overall car market. New-energy vehicles accounted for nearly a fifth of passenger-car sales in November, compared with 6.2% for the whole 2020.
Though China is phasing out subsidies for purchasing EVs, it has introduced a credit trading system encouraging car makers to produce vehicles with lower emissions. Infrastructure has also improved: there are now more than one million charging points in China, double the number two years ago, according to China Electric Vehicle Charging Infrastructure Promotion Alliance.
Apart from Tesla, Chinese brands dominate EV sales in the country. One unusual winner is the Hongguang Mini EV: a $4,400 hatchback made by a joint venture of General Motors, Liuzhou Wuling Motors and state-owned SAIC Motor. But other Chinese auto makers like BYD, Li Auto and XPeng are making more-conventional-looking EVs that are also bestsellers.
Having a head start after years of subsidies has helped. The country now has a strong EV supply chain. Contemporary Amperex Technology (CATL) is the world’s largest EV battery maker. China also dominates the processing of battery materials like lithium. Interest is also surging in a type of battery using a technology called lithium iron phosphate (LFP), which is safer and cheaper. The technology has been around for years but improved energy density thanks to better battery architecture now means it is suitable for wider adoption, especially in more-affordable EVs. Tesla has used LFP batteries from CATL for its China-made Model 3. BYD, which is backed by Warren Buffett, has also designed its own version.
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