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SHANGHAI – Tesla leads the foreign group to accelerate its breakthrough in the Chinese electric vehicle market as Beijing softens the rules of joint ventures to boost growth, while local start-ups are fighting a cut in government subsidies.
Tesla will put China's first fully foreign-owned plant into operation this year, while Toyota Motor, Volkswagen and other foreign competitors will step up their new-energy vehicle launches.
While Beijing's policy shift towards new energy vehicles – electric, fuel cell and plug-in hybrid vehicles – introduces foreign competition into the market, domestic players backed by government subsidies are facing a war of war. wear against decreasing support.
"I'm really excited to be here for the Shanghai Gigafactory, which is, I think, the Tesla China team that has done an incredible job, really mind-blowing," Tesla CEO Elon Musk said. , at the world conference on artificial intelligence that opened Thursday. in Shanghai.
"China is the world leader in environmental sustainability," said Musk. "It's extremely impressive, I think half of all electric cars in the world were made in China last year."
The new Tesla facility will produce the Model 3 compact sedan. It will also start building the Y model sport utility vehicle, which is expected to debut in 2020. A strategic vehicle for the Chinese market, the Y model is expected to be sold about half of the year. price of the X model, its luxury counterpart.
Tesla is experiencing strong demand in China. The California company sold about 21,000 units for the January to June period, more than twice the number achieved compared to the same period of the previous year. Tesla is interested in more and more new technologies, said Alan Kang, of the British research company LMC Automotive.
Other global automakers are following suit through local partners. Volkswagen has created a joint venture of electric vehicles with a mid-size player, its third partner, now that foreign carmakers are allowed to partner with three local companies to manufacture and sell new energy vehicles instead of two. The German company plans to deploy at least 30 new energy models by 2020, and to build 40 in China by 2025.
Sales increase for new energy vehicles. Toyota Motor sold 9,000 units in the first six months of the year, compared with almost none the year before. After launching Chinese sales of plug-in hybrids last spring, the Japanese company plans to commercialize mass-produced electric vehicles next year and expand the range to at least 10 models by the beginning of the next decade.
While foreign players are enjoying a boom, Chinese automakers are struggling to cope without government subsidies, which are expected to gradually disappear in 2020. SAIC Motor, the No. 3 new energy car, has seen its sales increase from January to June 7%, while the BAIC group, the second largest, recorded a 15% increase.
Start-ups, with at least 50 companies, are particularly affected by the drop in sales, making it difficult to raise funds. Chinese electric vehicle manufacturers reported only $ 780 million between January and mid-June, down nearly 90 percent from a year earlier, according to PitchBook Data, a leading market research firm. the private capital market.
A series of battery fires forced Nio, formerly leader, to recall about 4,800 electric vehicles and to cut 1,000 jobs, or 10% of its workforce. WM Motor, one of its investors, the search engine giant Baidu, complains about its cars, including sudden slowdowns during its travels.
Beijing's policy change is also contributing to their fate. In 2018, the government introduced quotas allowing car manufacturers to manufacture and sell new energy vehicles, which means that those who do not reach the threshold would buy credits from third parties who have passed the bar. But the implementation of the program has been postponed to this year, forcing new players to miss out on credit opportunities and benefiting foreign competitors.
Manufacturers of new energy vehicles are mired in the offer, said an executive of an investment company, predicts that those whose management is bad will be eliminated.
China promised to open the markets when it joined the World Trade Organization in 2001. But it has not kept its promises, citing its status as a developing economy as an excuse, much to the chagrin of China. frustration of the United States.
Beijing plans to abolish the foreign ownership restriction of carmakers by 2022, after removing the limits imposed on new energy vehicle manufacturers in 2018. BMW reached an agreement to increase its stake to 75% in a joint venture of private cars.
China is also relaxing foreign capital limits in the fields of shipbuilding, aircraft, energy, resources, infrastructure, transportation and retail. Anticipating these changes to foster competition, Beijing is also encouraging the realignment of state-run enterprises.
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