Dear MEL Topic Readers,
The world needs cheap electric cars. That spells trouble for big
carmakers
China is the world’s leading market and producer of New Electric
Vehicles (NEVs), including electric vehicles (EVs) and plug-in hybrid electric
vehicles (PHEVs). In fact, new energy vehicle sales accounted for over one-third
of the total vehicle sales in the last several months in the world's largest
car market. Though the number has dwindled in the last several years, there
still are dozens of NEV manufacturers in China that are expected to produce
around eight million NEVs this year. Roughly, electric cars sold in China are over
40% cheaper than those sold in Europe or the USA. The market leader is BYD, whose
market share in the first nine months this year exceeded 36%, followed by Tesla
and Nio, none of which had been known as a car until recently. Indeed, Chinese
NEV manufacturers have enjoyed the market growth of their domestic market, partly
having been helped by government subsidies. Furthermore, they don’t have to worry
about the existing sales, factories, distribution network, and the past
investment of conventional vehicles. For NEV manufacturers, their sales are new
revenues while NEV sales are substitutes for their beloved conventional vehicle
sales for legacy automakers such as General Motors, Ford, Volkswagen, and
Toyota. Can they compete against those rising new powers?
Enjoy reading the article and learning about the ongoing shift in the automotive
industry.
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