Shanghaier auto show
How China drives its e-car revolution ahead
China is considered a pioneer in electric cars. Once dominated by German and other foreign companies, their own brands made the People’s Republic into an electric car country in a few years. How does China do that?
Petrol was yesterday: At China’s most important car show, which begins in Shanghai on Wednesday, everything revolves around electrical innovations. Once again, you should add. Because China has been the leading market for e-mobility for years. More than 100 new models, most of them, are expected in Shanghai.
The Association of the Chinese auto industry is confident: In the current year, the 50 percent electrical share of the new car sales is exceeded “easily”. Burners lose rapid ground on China’s streets. Why is that?
Subsidies and innovations
The rise of e-mobility is politically wanted and state-funded. In China, electricity is also “very cheap” while oil is more expensive, says expert Cui Dongshu of China’s auto industry association. Beijing subsidized the purchase of electric cars for over a decade. Direct purchase bonuses expired, but tax relief continues.
The ten percent employment tax for Stromers will be eliminated by the end of 2025. Many cities facilitate approval with preferred license plates. In addition, a state quota for new energy vehicles (NEV) obliges manufacturers to produce a growing share of electrical and hybrid models.
The success is noticeable: in 2024 the NEV share on the new car market reached around 47 percent, after 31.6 percent in the previous year. At the same time, there is massive investments in charging stations, battery exchange networks and recycling from batteries.
In addition, the competition is merciless. Especially the market entry Teslas in 2020 caused China’s car manufacturers to create innovations, to launch products and to optimize the costs, says analyst Paul Gong from UBS-Bank. An electric car in China now costs about half as much as in the western world.
The price war goes into the third year. Finally, almost all major manufacturers reduced their prices again or attracted with bonus programs. The result: shrinking margins, losses and overcapacity. Insolvians are piling up.
In 2024, several ambitious start-ups had to give up. In December the joint venture jiyue collapsed from tech group Baidu and car manufacturer Geely shortly after the market launch. Previously, manufacturers such as Human Horizons (HipHi), byton, world champion and lordrine failed, which leaves unsettled customers and cars without maintenance or software updates. Observers expect persistent market cleanup.
China’s brands in the fast lane
One of the clear winners is BYD from Shenzhen. With affordable e-models, the company hits the taste of the masses. In the first quarter of 2025, BYD released almost 700,000 electric and plug-in vehicles in China. The market share is around 29 percent, more than the four next largest providers. BYD has not only overtaken Tesla, but also the traditional market leaders in combustion.
Li Auto is also growing strongly. The SUV specialist relies on so-called range extender hybrids in the premium segment, in which the electric motor drives the car while a combustion engine loads the battery. With the concept, the company was able to double its sales figures in 2024 and now writes black. Geely, which includes brands such as Zeekr and Lynk & Co, is also one of the promoters.
In the meantime, China’s brands are increasingly looking abroad. BYD or NIO were found in Germany. In addition, the manufacturers are pushing to South America and Southeast Asia. But out of concern about a flood of cheap Chinese cars, for example, the EU and even China’s close partners tighten the trade barriers. According to experts, Beijing’s e-car exports should grow more slowly this year.
Constantly new competition on the market
But large tech companies also mix the market in China. The company Xiaomi, known for its smartphones, successfully launched its first electric sedan SU7 in 2024. Xiaomi relies on “a lot of technology for money”. Huawei is also active and delivers its software know-how to at least seven car manufacturers. In Huawei shops, the vehicles stand next to the smartphones.
Foreign manufacturers, on the other hand, are under pressure. Your electric models often only play a supporting role. The continuous decline of the German brands in China is also due to their own shortcomings, says automotive expert Zhong Shi. “German cars can definitely keep a certain market share in China, but it depends on who wins – Volkswagen or BMW and Mercedes,” he explains. Volkswagen, BMW and Mercedes-Benz are sometimes considered old-fashioned for many customers.
The manufacturers are now focusing on the needs of Chinese customers. Networking and digital cockpits are in demand – the smartphone on wheels. Analyst Gong advises foreign corporations to no longer only consider China as a production location, but rather a global research and development center. In his view, you have advantages if you link confidence in your brands with the latest technologies developed in China.
Unimmarching innovations
After the e-boom, the focus is more on autonomous driving. At the end of March, a fatal accident occurred with an Xiaomi car in autopilot mode. Three inmates died when the car crashed into a concrete pillar on a motorway and caught fire. The incident triggered a debate about the security of self -driving systems in China. The government has now warned the manufacturers not to overturn the skills of their assistance systems. Industry forecasts assume that 2026 will be electrified more than 60 percent of all new cars sold in China.
dpa
Source: Stern
