SHANGHAI – Global and Chinese automakers plan to unveil more than a dozen new electric SUVs, sedans and muscle cars this week at the Shanghai Auto Show, their first large-scale sales event in four years in a market that has become a workshop for the development of electricity. , autonomous cars and other technologies.
Automakers are racing to launch faster, more luxurious and more feature-rich electric vehicles in the technology’s biggest and most crowded market. The ruling Communist Party has poured billions of dollars into subsidies to buy a head start in an emerging industry. Established global brands face intense competition from Chinese rivals.
For the first time since 2019, executives are flying in from the United States, Europe and Japan for the world’s biggest auto show after virus restrictions that blocked most travel to China were lifted in December. Auto shows have been held in the industry’s biggest market during the pandemic, but on a smaller scale. Global brands were represented by employees from their China operations.
Drivers in the world’s largest car market bought 5.4 million pure electric vehicles last year, or about two-thirds of the global total of 8 million, plus 1.5 million gasoline-electric hybrids. That was more than a quarter of total auto sales of 23.6 million. Sales of electric vehicles this year are expected to increase by 30%.
“Consumers lost interest in gasoline 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 EV products.”
Beijing is reducing government support and shifting the burden to automakers by requiring them to earn credits for sales of electric vehicles. Manufacturers are investing billions of dollars in developing models that can compete on price and features without subsidies. Many are forming partnerships to share rising costs.
Auto Shanghai 2023 fills the cavernous Shanghai Exhibition Center, a 1.5 million square meter (16 million square foot) subcontinent of a building that is among the largest in the world.
Volkswagen AG, the country’s best-selling brand, says it plans to show 28 models, half of them electrified. VW says it will debut its ID.7 limousine, which promises a range of 700 kilometers (435 miles) on a single charge.
China’s BYD Auto, which competes with Tesla Inc. for the title of the world’s best-selling electric car maker, says it will show its luxury brand Yangwang U9 supercar for the first time. 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 a blistering two seconds.
Auto sales in China peaked in 2017 at 24.7 million, but plunged in 2020 to 20.2 million after dealerships closed as part of efforts to contain COVID-19. They are recovering but not yet back to pre-pandemic levels.
The ruling party’s support for the development of electric vehicles is part of plans to gain wealth and global influence by transforming China into a creator of profitable technologies.
That campaign has strained relations with Washington and other trading partners, which are cutting 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-end chips used in many cars, but not processors for artificial intelligence and other advanced functions.
Sales of gasoline-electric hybrids and pure electric vehicles rose 26.2 percent from a year ago in the first three months of 2023 to 1.6 million, according to the China Association of Automobile Manufacturers. Pure electric sales rose 14.4% to 1.2 million, while hybrids rose 75.1% to 433,000.
Tesla and some other brands cut prices by between 5% and 15% starting in January after sales growth slowed, though to still robust levels compared with sluggish US and European markets . That prompted warnings that pressure on an industry with dozens of fledgling brands could force smaller automakers to merge or go out of business.
China is also, along with the United States, a leader in the development of autonomous taxis and trucks.
Baidu Inc., better known as a search engine operator, is the most prominent of the developers that also include Pony.ai. Geely Group, owner of Volvo Cars, Lotus and Polestar, has announced plans for satellite-linked autonomous vehicles. Network equipment manufacturer Huawei Technologies Ltd. works in mining and industrial vehicles with autonomous driving.
Baidu and Pony.ai received China’s first licenses to offer autonomous transportation services in Beijing with a safety driver on board to take over in case of emergency in 2022. This came 18 months after Waymo, of Alphabet Inc., the driverless journey began. greeting service in Phoenix, Arizona.
“We see very strong government support,” said Canalys’ Jason Low.
At the auto show, Chinese brand Aito plans to showcase its new M5 SUV with autonomous technology developed in an alliance with Huawei Technologies Ltd. The telecommunications equipment maker is expanding into autos and other industries after U.S. sanctions imposed in a feud with Beijing over technology. crushed Huawei’s smartphone business.
China’s market is so big that even brands whose strongest selling point is roaring, gasoline engines are embracing electricity.
BMW AG says its entire vehicle lineup at Auto Shanghai will be electrified. The German sports luxury brand says it will introduce two new models, the i7 M70L and XM Red Label, and show off its 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 make its debut in Asia.
Chinese luxury electric vehicle brand NIO Inc., which competes with Tesla at the premium end of the market, plans to show off its latest SUV, the ES6. It promises a range of 610 kilometers (380 miles) on a single charge.
Mercedes Benz plans to introduce an electric SUV under its Maybach luxury brand and two SUVs. The company also has electric vehicle joint ventures with BYD Auto and Geely Group.
Toyota says it plans to introduce two new models to its bZ line of zero-emissions vehicles. Nissan plans to show its Max-Out electric convertible concept car. Honda is debuting a new prototype for its China-focused e:N electric brand.
Despite these investments, Western and Japanese brands need to be more aggressive in developing electric vehicles to keep up with China’s rapid development, LMC’s Zeng said. He said many take too long to create models overseas without Chinese intervention.
“The model they bring to China is three or four years behind the Chinese models in terms of driving and equipment,” Zeng said. “They need to learn how to design and test cars in China for China.”
