Auto China highlights the fierce competition for electric cars

SHANGHAI (AP) — Global and Chinese automakers plan to unveil more than a dozen new electric SUVs, sedans and muscle cars this week at Auto Shanghai, their first large-scale sales event in four years in a market that has become a workshop. To develop electric, self-driving cars and other technologies.

Automakers are competing to roll out faster, more luxurious, and more feature-packed electric cars in the technology’s biggest and busiest market. The ruling Communist Party has invested billions of dollars in subsidies for an early batch buyout in a nascent industry. Well-established global brands face stiff competition from Chinese competitors.

For the first time since 2019, executives from the United States, Europe and Japan are traveling to the world’s largest auto show after anti-virus restrictions that prevented most travel to China were lifted in December. Auto shows continued in the industry’s largest market during the pandemic, but on a smaller scale. Global brands have been represented by the staff of their operations in China.

Drivers in the world’s largest auto market bought 5.4 million pure electric vehicles last year, or about two-thirds of the global total of 8 million, as well as 1.5 million petrol-electric hybrids. This was more than a quarter of the total vehicle sales of 23.6 million. This year, electric vehicle sales are expected to rise another 30%.

“Consumers have lost interest in gasoline-powered cars. This is the biggest challenge for foreign brands to compete in China,” said industry analyst John Zeng of LMC Automotive. “They will have to showcase their best electric vehicle products.”

Beijing is easing government subsidies and shifting the burden onto automakers by requiring them to earn credits for electric vehicle sales. Manufacturers are pouring billions of dollars into developing models that can compete on price and features without subsidies. Many of them form partnerships to share the exorbitant costs.

The 2023 Shanghai Auto Show fills the cavernous Shanghai Exhibition Center, a subcontinent of 1.5 million square meters (16 million square feet) of building that is among the largest in the world.

Volkswagen AG, the country’s best-selling brand, says it plans to offer 28 models, half of which are electrified. Volkswagen says it will debut the ID.7 limousine, which promises a range of 700 kilometers (435 miles) on a single charge.

China’s BYD Auto, which is vying with Tesla Inc for the title of the world’s largest-selling electric car maker, says it will debut its U9 supercar from its luxury brand Yangwang. The automaker says the U9, with a sticker price of 1 million yuan ($145,000), can accelerate from zero to 100 kilometers per hour (60 mph) in two neck-straining seconds.

China’s auto sales peaked in 2017 at 24.7 million but collapsed in 2020 to 20.2 million after dealerships closed as part of efforts to contain COVID-19. They are recovering but not back to the pre-pandemic level.

The ruling party’s support for the development of electric cars is part of plans to gain global wealth and influence by turning China into a maker of lucrative technologies.

That crackdown has strained relations with Washington and other trading partners, who have cut off access to advanced processor chips used by makers of smartphones, electric cars and other high-tech products. China’s own foundries can supply low-quality chips used in many cars but not the processors for artificial intelligence and other advanced functions.

Sales of gasoline-electric hybrids and pure electric vehicles rose 26.2% year-on-year in the first three months of 2023 to 1.6 million, according to the China Association of Automobile Manufacturers. Sales of pure electric vehicles increased 14.4% to 1.2 million while sales of hybrid vehicles rose 75.1% to 433,000.

Tesla and some other brands cut prices by 5% to 15% starting in January after sales growth slowed, though they remained at strong levels compared to recessionary US and European markets. That prompted warnings that pressure on an industry with dozens of emerging brands could force smaller automakers to merge or go out of business.

And China, along with the United States, is also a leader in the development of self-driving taxis and trucks.

Baidu Inc. , known as the search engine launcher, is the most prominent among the developers that also include Pony.ai. Geely Group, owner of Volvo, Lotus and Polestar cars, has announced plans for satellite-linked self-driving vehicles. Huawei Technologies Ltd. For the manufacture of network equipment on self-propelled mining and industrial vehicles.

Baidu and Pony.ai secured China’s first licenses to offer self-driving transportation services in Beijing with a safety driver on board to take over in the event of an emergency in 2022. This came 18 months after Alphabet Inc. Welcome Service in Phoenix, Arizona.

“We see very strong support from the government,” said Jason Law of Canalys.

At the auto show, the Chinese brand Aito plans to show its new M5 SUV with autonomous technology developed in alliance with Huawei Technologies Ltd. The telecoms equipment maker is expanding into auto and other industries after US sanctions imposed in a dispute with Beijing over technology crushed Huawei’s smartphone business.

China’s market is so huge that even brands whose strongest selling point is roaring, gasoline-powered engines are adopting electric.

BMW AG says its entire lineup of cars at Auto Shanghai will be electric. The German luxury sports brand says it will unveil two new models, the i7 M70L and XM Red Label, and show the M760Le in China for the first time.

Italy’s Maserati, a Stellantis unit known for using high-performance Ferrari engines, plans to unveil its first electric SUV, and says its electric sports car will get its Asian premiere.

Chinese luxury brand NIO Inc. , which competes with Tesla in the premium market, to showcase its latest SUV, the ES6. It promises a range of 610 kilometers (380 miles) on a single charge.

Mercedes-Benz plans to unveil an electric SUV under its luxury Maybach brand and two SUVs. The company also has joint EV ventures with BYD Auto and Geely Group.

Toyota says it plans to unveil two new models in the bZ line of zero-emission vehicles. Nissan plans to show off its Max-Out electric convertible concept. Honda introduces a new prototype for its China-focused e:N electric brand.

Despite these investments, Western and Japanese brands should be more aggressive about developing electric vehicles to catch up with China’s rapid development, said LMC’s Zeng. He said that many people take a long time to create models abroad without Chinese input.

“The model they are bringing to China is three or four years behind the Chinese models in terms of driving and equipment,” Zeng said. “They have to learn to design and test cars in China for China.”