Yicai Research Institute: An analysis of China's new energy vehicles' current globalization path | Across mountains and seas
2024-08-12
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In recent years, Chinese new energy vehicle companies have frequently "gone overseas":In 2021, NIO launched NIO House (User Experience Center) in Norway and set up 6 battery swap stations along the Rhine River. In 2022, BYD established a joint venture factory in Rayong Province, Thailand, which opened in July 2024 with an annual production capacity of 150,000 vehicles. In 2023, several Chinese battery manufacturers including CATL and EVE Energy established production bases in Europe and other regions to support local demand for new energy vehicles. At the same time, several automakers including SAIC, Great Wall Motors, Hozon New Energy Vehicles, and Changan Automobile announced the construction of factories in Southeast Asia. In 2024, BYD launched the "BYD EXPLORER NO.1" ro-ro ship, carrying more than 5,000 new energy vehicles to Europe on its maiden voyage. This marks the autonomous development of Chinese new energy vehicle companies in logistics.Driven by strong market demand, the "going overseas" strategy of new energy vehicle companies has become an irreversible trend.
1. Current status of China's new energy vehicle industry development
The rapid development of China's new energy vehicle industry in the past few years has attracted attention.From the sharp rise in market share to the significant enhancement of technological capabilities, Chinese brands have not only taken a leading position in the domestic market, but have also emerged globally. However, the rapid development of the new energy vehicle industry has also led to problems such as fierce market competition and product homogeneity.
(1) Development: Rapid rise
By the end of 2023, the number of new energy vehicles in China will reach 20.41 million. In the first half of 2024, the production and sales of new energy vehicles will reach 4.929 million and 4.944 million respectively, up 30.1% and 32% year-on-year respectively. At present, my country's new energy vehicle models are no longer limited to certain specific types or body levels, and are penetrating into larger models and higher-end models.
(2) Technology: Global leader
The world's leading "three-electric" systemChina's new energy vehiclesBreakthroughs have been made in core technology fields, especially in the "three-electric" systems of batteries, motors, and electronic controls, which have firmly established themselves as the world's leading companies.Particularly prominent is battery technology. Chinese companies occupy half of the global power battery sales market and have formed an industrial chain advantage in the production of key raw materials such as positive electrode materials, negative electrode materials, diaphragms, and electrolytes.
Continuous optimization of cost controlChina's new energy vehicles are not only technologically advanced, but have also achieved major breakthroughs in cost control.Through technological innovation and large-scale production, high-end technologies such as 800V platform architecture and 8295 automotive-grade chips have been popularized in models priced below 200,000 yuan, significantly reducing the purchase cost of new energy vehicles. It has achieved a historic leap from "oil and electricity are the same price" to "electricity is cheaper than oil", greatly promoting the popularization of new energy vehicles.
Intelligentization is acceleratingMany domestic automobile companies are actively investing in the research and development and application of autonomous driving technology, continuously launching new energy vehicle products with high-level autonomous driving functions, and demonstrating excellent performance and reliability in actual road tests.
(3) Capacity: Rapid expansion
On the one hand, traditional oil vehicle companies are actively transforming to new energy vehicles.For example, in 2023, SAIC-GM opened its second electric vehicle production base in Wuhan; FAW-Volkswagen put into operation new factories in Foshan and Tianjin as production bases for its electric vehicles.On the other hand, new energy vehicle companies have increased their capacity planning.
（4）exit:It has become a force that cannot be ignored in the international market.
By virtue ofBattery technology, intelligent driving system, and complete local supply chainWith comprehensive advantages in various aspects, China's exports of new energy vehicles continue to rise, and it has become a force that cannot be ignored in the international market.
Exports increased significantlyAccording to data released by the China Association of Automobile Manufacturers, in 2023, China's new energy vehicle exports will reach 1.203 million units, a year-on-year increase of 77.6%, a growth rate higher than that of traditional fuel vehicles, accounting for 24.5% of total automobile exports. In the first half of 2024, China's new energy vehicle exports will reach 605,000 units, a year-on-year increase of 13.2%. At present, China's new energy vehicle global market share is as high as 60%, and is accelerating towards globalization.
High-end market layoutChina's leading new energy vehicle companies, such as BYD, Geely, and Weilai, not only sell their products to emerging markets such as Southeast Asia and the Middle East, but also actively expand into high-end European markets such as Norway, Sweden, Germany, and the Netherlands. These markets have a high degree of acceptance of Chinese high-end models, which has established a good international image for Chinese new energy vehicle brands and promoted the improvement of product premium capabilities.
Export trend of "increasing both quantity and price"As China's new energy vehicles become increasingly competitive in the international market, the average export price is also increasing year by year, from US$19,500 in 2021 to US$23,800 in 2023.This export trend of "increasing both quantity and price" has brought richer profit returns to China's new energy vehicle companies and provided strong support for the sustainable development of enterprises.
2. Challenges in overseas market layout
current,China's new energy vehicle industry is at a critical turning point.As the market becomes saturated, product homogeneity becomes increasingly serious, the domestic market space is gradually shrinking, and competition among enterprises is becoming increasingly fierce, which directly leads to limited profit margins and slowed growth. In this context,Expanding overseas markets has become an inevitable choice for the development of China's new energy vehicle industry.In fact, the path of outward development is not unique to the new energy vehicle industry. Take the home appliance industry as an example. As early as the 1980s, after experiencing fierce competition in the domestic market, China's home appliance industry decisively chose the path of outward expansion, and eventually gained a pivotal position in the global market. By developing outward, companies can demonstrate their strengths and advantages on the international stage, find new growth points, and occupy new market heights. At the same time, this process will also promote technical exchanges and cooperation between companies, promote the overall upgrading and optimization of the industrial chain, and inject new vitality and impetus into China's new energy vehicle industry. Therefore, the current layout of overseas markets for Chinese new energy vehicle companies is a strategic choice that conforms to the conventional route of industrial development and brings new opportunities for corporate development. Of course, Chinese new energy vehicle companies are also facing some severe challenges, which have a profound impact on the internationalization process and global competitiveness of enterprises.
(1) “Exporting powerhouse” is not the same as “exporting powerhouse”
Although China's exports of new energy vehicles are among the highest in the world, most of them are dominated by foreign brands. In 2023, more than 344,000 "Made in China" Teslas produced in Shanghai were exported to overseas markets, accounting for 29% of China's electric vehicle exports. In addition, Chinese new energy vehicle companiesIn terms of brand value and after-sales service, there is still a gap compared with the old car companies in developed countries such as Europe and the United States.For example, Chinese brands’ sales prices in the European and American markets are usually several thousand dollars lower than similar foreign brands. Although the export volume is huge, the overall profitability is weak and the profit contribution is limited. This gap is not only reflected in the product itself, but also in the lack of brand influence and market recognition, which limits the high-end positioning and premium ability of enterprises in the international market.
(2) Facing international trade barriers
As China's new energy vehicle exports expand, international trade protectionism is on the rise, becoming a "stumbling block" for companies' overseas expansion.The United States, the European Union and other countries have successively imposed additional tariffs and other trade restrictions on my country's electric vehicles, which not only directly increased the export costs of China's new energy vehicles, but also triggered a chain reaction around the world, which may lead to more countries following suit, further exacerbating the market barriers faced by China's new energy products. The deterioration of this trade environment not only tests the cost tolerance and market adaptability of China's new energy vehicle companies, but also poses a severe challenge to the globalization strategy of enterprises.
(3) Insufficient internationalization and localization capabilities
The layout of Chinese new energy vehicle companies in overseas markets is still in its early stages, and their internationalization and localization capabilities are insufficient.Specifically, the number and scale of overseas factories are limited, and the overall production capacity is low; the localized management of overseas branches and factories and the proportion of local employees employed are not high, resulting in slow market expansion and brand building; brand awareness and market adaptability are insufficient, making it difficult to quickly integrate into the local market and win consumer trust.
3. Response suggestions
Against the backdrop of the global automotive industry’s green transformation, China’s new energy vehicle industry is at a critical stage of transformation. In order to achieve the transition from a “manufacturing power” to a “manufacturing powerhouse”,Government and businessA series of forward-looking and strategic measures need to be taken to lead the green transformation of the global automotive industry.
（1）Strengthening supervision and guidance mechanisms
The healthy development of China's new energy vehicle industry is inseparable from the effective supervision and scientific guidance of the government. The government should deepen the reform of the market mechanism to ensure that the market plays a decisive role in resource allocation, and at the same time strengthen the construction of the legal and regulatory system to create a fair, transparent and orderly market competition environment. By formulating and implementing strict regulatory standards, we can protect the rights and interests of consumers and promote the development of the industry in a high-quality and sustainable direction.In terms of overseas market expansion, the government should guide enterprises to follow international rules and establish a positive brand image through technological innovation and service improvement.
（2）Promote technological innovation and industrial upgrading
Technological innovation is the core driving force for the sustainable development of the new energy vehicle industry. Although China's new energy vehicle industry has made remarkable achievements, it still needs to strengthen its research in key technical areas such as automotive chips, basic software, low temperature adaptability, safety, charging convenience, and battery life. To this end, the government shouldIncrease support for the research and development of new energy vehicle technologies, encourage companies to increase R&D investment, promote the deep integration of industry, academia and research, and accelerate technological innovation and transformation of results.
（3）Promote overseas layout and industrial chain expansion
As the process of globalization accelerates, Chinese new energy vehicle companies should actively expand overseas markets and realize the transformation from "product export" to "industry chain export". This requires companies to not only export complete vehicles, technologies, brands and other products of the entire industry chain, but also to invest in and build production bases overseas, strengthen supply chain construction, and improve overseas supply guarantee capabilities. Faced with the complexity and uncertainty of overseas markets, the governmentRelevant policies can be introduced to increase support for the overseas expansion of the new energy vehicle industry chain.For example, financial support can be provided to encourage companies to establish production bases overseas, strengthen supply chain construction, and improve overseas supply security capabilities.
(4) Establish and formulate technology transfer thresholds and standards
Domestic new energy enterprises are encouraged to actively export advanced technologies to overseas markets.It is possible to establish and formulate thresholds and standards for the transfer of Chinese new energy vehicle technology.For example, standards for anti-leakage, charging, and battery cycle times will not only help eliminate inefficient and highly polluting production capacity and promote the upgrading and structural optimization of the domestic new energy vehicle industry, but can also actively participate in and guide the formulation of international rules for new energy vehicles through their own high standards and technological advantages, enhance international voice and influence, establish the international image of a responsible major country, and demonstrate leadership and responsibility in global environmental protection and technological progress.
(5) New energy vehicle manufacturers need to adopt flexible strategies in international market expansion
Faced with overseas barriers, if Chinese new energy vehicle manufacturers want to become stronger and bigger, they must adopt flexible strategies in expanding the international market.
First, strengthen research and development to maintain technological leadership.Enterprises should focus on technological innovation, increase research and development efforts in solid-state batteries, fast charging technology and intelligent network connection technology, and improve the intelligence and safety of vehicles while meeting consumers' demands for battery life and charging convenience. At the same time, they should strengthen patent layout on a global scale, protect their own technological advantages, and use intellectual property rights to cooperate with international giants in technology and expand the market.
Secondly, leverage existing brands and channels to achieve win-win cooperationOn the premise of maintaining the leading position in key technologies, we will use existing Western brands and channels to quickly enter mature markets, formulate a sound mechanism for technology output and intellectual property protection, and improve market competitiveness and penetration.
Again, learn the localization strategy of Japan's Toyota.Although the results of the US election may bring about changes in policy details, overall, import restrictions on Chinese new energy vehicles will gradually become stricter. We can learn from the experience of Toyota in Japan, set up local R&D centers, and cooperate with local technical colleges and research institutions to develop new energy vehicle technologies and models that meet local market needs. In addition, we should actively seek cooperation with local governments, car companies and capital to share technology dividends and jointly promote global layout.
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Text | Ma Xin, Special Researcher, First Financial Research Institute
(This article comes from China Business Network)
