Electric Vehicles (EVs) are automobiles that are powered either entirely or mostly by electricity. EVs are particularly environmentally friendly since they consume little to no fossil fuels (gasoline or diesel), resulting in significantly reduced emissions. Moreover, EVs have fewer moving components, leading to lower maintenance requirements and low operating expenses. In China, over 94 brands collectively offer over 300 models, with local brands accounting for 81% of the local EV market. Consequently, it is crucial to explore China’s EV brands.
The rapid adoption of EVs in China: projected sales of 7.3 million units by 2027
Generally, EVs can be grouped into two major categories: Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs). BEVs are powered solely by electricity. It has no internal combustion engine (ICE), gasoline tank, and exhaust pipe. Instead, it features one or more electric motors that are powered by a bigger battery that needs to be charged via an external outlet. PHEVs, on the other hand, combine an electric motor with a battery that can be recharged externally with an ICE that burns fuel.
The nation is also quickly adapting to EVs. From 2020 to 2021, there has been a significant increase in terms of EV units sold, a surge of around 2.6 times. In China, one in every four new automobiles sold today is an EV.
China is also the largest EV manufacturer in the world. Its EV production reached 3.5 million units in 2021. Within the domestic market, the local brand Build Your Dreams (BYD) boasts the largest sales figures. In 2021, 17.5% of EV units sold in the country was produced by BYD. The presence of international EV brands is relatively weak compared to China’s EV brands. However, a couple of international EV brands such as Tesla and Volkswagen managed to make it into the top 10 brands in 2021.
Tech-savvy and price-conscious: Understanding Chinese consumers’ preference for EVs
In terms of the adoption of electric cars (EVs), the Chinese market has a distinct edge due to several variables. One crucial factor is that a large portion of Chinese consumers has never owned a car, which eliminates the “switching cost” related to converting from ICEs to EVs. This makes it easier for them to embrace the electric mobility revolution.
Chinese consumers are also renowned for being price-sensitive, and as a result, original equipment manufacturers (OEMs) have begun to sell EVs at a range of pricing points. Moreover, they are highly tech-savvy and enthusiastic about embracing the latest digital advancements. They are eager to adopt the newest digital architecture and sophisticated features that EVs come with.
A rising proportion of Chinese Gen Z and millennial consumers consider EVs as a form of self-expression, perceiving their cars as an extension of their personal identities. They try to personalize their vehicles, reflecting their desire for individualism and the availability of unique customization options. This trend highlights people’s inclination towards personalization and the desire for distinctiveness.
The rise of domestic brands: Chinese EV brands captured 80% of China’s best-selling EV models
Local brands are dominating the EV market in China. In 2022, domestic companies accounted for 80% of the top 10 EV models sold in China, with BYD emerging as the brand that had the highest number of models on the board.
Build Your Dreams (BYD)
BYD is one of the largest Chinese EV brands. The Shenzhen-based Chinese company is best known for its automobile manufacturing. However, other than automotive, the enterprise also produces buses, electric bicycles, trucks, forklifts, solar panels, and rechargeable batteries.
BYD emerged as a pioneer in China’s EV industry. Well ahead of the global surge in interest in EVs, BYD recognized the potential of electric mobility and began focusing on EVs and battery technologies as early as 2003. By dedicating significant resources to EV research and development, BYD gained a substantial advantage over its competitors. This early mover advantage allowed the company to establish a significant lead in the market. Other than being a forerunner, BYD also owes its success to various factors.
Aligning with Chinese consumers’ specific needs and tastes
BYD employs vertical integration which grants BYD enhanced control over the supply chain, quality, and cost. The company also stands out by offering a diverse and extensive product portfolio. Chinese consumers are presented with a wide range of options that cater to their unique lifestyles and preferences. Whether it’s passenger cars, buses, or commercial vehicles, BYD’s comprehensive lineup ensures that consumers can find an electric vehicle that perfectly aligns with their specific needs and tastes.
BYD excels in technological innovation within the EV sector, making advancements in smart features, electric motor efficiency, and battery technology. Efficiency and reliability are also key attributes of BYD’s EVs, meeting the demands of Chinese buyers who prioritize a comfortable and efficient driving experience.
Additionally, the firm has strategically partnered with prominent Chinese companies like Didi Chuxing and Huawei, expanding its market presence and strengthening its position. These alliances have been instrumental in BYD’s growth and success in China. Moreover, support from the Chinese government through policies, subsidies, and incentives has fostered the EV industry’s growth. BYD has leveraged this supportive environment to make their EVs more affordable and accessible, driving consumer adoption.
Liuzhou Wuling Automobile Industry Co., Ltd (Wuling)
Wuling is a Chinese automobile manufacturer which specializes in producing mini-commercial vehicles and passenger vehicles. Based in Guanxi, the firm is a joint venture between two prominent companies, SAIC Motor and General Motors (GM).
Disrupting the market when practicality meets affordability
Wuling’s success in China can be attributed to its mini-commercial vehicles, specifically the Wuling Hongguang series, which includes compact vans, pickups, and Multi-Purpose Vehicles (MPVs). The Wuling Hongguang Mini EV became incredibly popular in China by offering affordability, attractive colors, and positioning itself as a practical vehicle for daily commuting. Despite not having spacious interiors or long battery life, the Mini EV’s range options of 120 km and 170 km were more than enough for everyday usage, attracting buyers who value practicality and cost-efficiency.
Wuling’s marketing techniques, such as reducing features to cut the price, had a big impact on the model’s extraordinary success. The Guanxi-based automaker distinguished itself from competitors by emphasizing emotional appeal, embracing current color trends, and considering the tastes of young customers. The brand’s success was evident in its high ownership among younger demographics and female customers. Wuling’s success in the competitive automotive industry can be attributed to its ability to adapt its products to changing consumer demands, its innovative approach, and its responsive nature.
China’s electric vehicle brands leading the race
- The EV market in China is experiencing significant growth, with battery electric vehicles (BEVs) leading the way. In 2023, BEVs are projected to generate nearly 78% of the total revenue in China’s EV industry.
- Chinese consumers are price-sensitive and tech-savvy, embracing the latest digital advancements and looking for customization possibilities in their EVs.
- In the competitive landscape of China’s EV industry, Chinese EV brands are dominating the scene. Among them, BYD stands out as a prominent player.
- BYD managed to leverage its early entry to become the front-runner in China. The brand became popular due to its diverse product portfolio and technological innovation. It also uses government subsidies to lower its cost and consequently, product price.
- Wuling achieved success in China’s EV market with its Wuling Hongguang series, The company has tapped into the demand for affordable and practical mini-commercial vehicles with this model, attracting buyers who value cost-efficiency and functionality.
Author: Regina Sukwanto
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