The rapid ascent of Chinese electric vehicle (EV) makers to the top of the global automotive sector has made their Western counterparts sit up, take notice, and consider their options moving forward.
Tesla chief executive Elon Musk himself has soberly remarked that those who believe that Tesla will be joined by nine Chinese automakers in the list of the world’s ten leading EV manufacturers aren’t wrong. At this year’s New York Times Dealbook Summit held last November 29th, Musk lauded the Chinese for being experts in manufacturing and having an impeccable work ethic – two aspects that have fueled their success in a nascent industry.
But it’s the Chinese cost advantage that worries the automotive sector’s old guard. Indeed, Ford Motor’s executive chair Bill Ford Jr warned his peers in the US automotive industry several months ago that the Chinese have been at the forefront of innovation. They have implemented their innovations on such a massive scale – and at a considerably lower production cost – that they have successfully exported their end products throughout the globe. Their American counterparts, however, aren’t in a state to properly compete with them.
Given how China has overtaken Japan as the world leader in terms of automotive exports, automakers in the US are scrambling to protect their profits from the onslaught of export EVs. While the Biden Administration’s Inflation Reduction Act has helped through numerous subsidies, American carmakers worry that these may not offer enough protection.
That, however, doesn’t mean that the Chinese can easily rest on their laurels these days. Many governments still cast a wary eye on their EVs due to safety issues and design flaws that could lead to serious accidents and loss of life. This is particularly true in Australia where just last week EVs produced by Chinese manufacturer GWC were recalled following a programming issue that could cause death by electrocution among unwary EV owners.