A move by China more than a decade ago has led to one of the most transformative developments in the history of the auto industry, and is a real threat to some household names.
The most transformative development in the auto industry’s history since Henry Ford pioneered mass production more than a century ago is threatening both the automotive establishment and its workers and causing angst on both sides of the Atlantic.
China, by contrast, is set to dominate the global battery powered EV industry because more than a decade ago, realising it had no material competitive advantage in vehicles powered either by internal combustion engines or in the hybrid sector where the Japanese manufacturers led developments, it targeted EVs.
The decision to pursue EVs was not purely opportunistic. Beijing saw the potential to reduce its carbon emissions through the displacement of the legacy fleet of vehicles and also recognised the potential to leverage its dominance of the supply chain for batteries, which constitute about 40 per cent of an EV’s costs.
While China-manufacturers vehicles account for only about three per cent of the total market, about 15 per cent of sales in the battery-powered EV market in Europe this year have been generated by China-built vehicles, with the SAIC Motor-owned MG brand accounting for about 6 percentage points and EVs from Tesla’s Chinese plants about 4 percentage points.The one big market where Chinese-manufactured EVs haven’t gained a foothold is the US, thanks to the 27.
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