China is the world's largest EV market and the most competitive. According to the report, sales of „new energy vehicles“, which include both hybrid vehicles and battery EVs, increased by 38% last year to reach 9.49 million units. data From the China Automobile Manufacturers Association. According to a study by research firm Lowmotion, the global EV market last year was 13.6 million units. EstimateThis means that China accounted for almost 70% of all EV sales last year.
As the world embraces electric vehicles, China's affordable EVs could be poised to take over the world. anxiety Both traditional automakers and Tesla CEO Elon Musk.
Three Chinese EV manufacturers featured in „Asia Future 30“ luckThe list, compiled in partnership with BCG, features 30 regional companies best positioned for future growth. (You can access complete list here, future 50-Introducing 50 companies from around the world-here).
BYD, the EV giant backed by Warren Buffett's Berkshire Hathaway, is perhaps the most famous of the three. The company started as a battery manufacturer, deposed Tesla was the world's top seller of battery EVs in the final quarter of last year.
Two Chinese EV startups, Nio and Li Auto, are also on the list, both targeting the luxury market and competing with U.S.-based brands such as Tesla.
However, these three companies are just a few of the approximately 100 EV manufacturers in China. The Chinese government has encouraged the development of the EV sector since the early 2010s, providing subsidies to both manufacturers and consumers.
The huge number of producers makes China the most competitive EV market in the world. the same number There are 500 EV companies in China, but competition is driving consolidation. Most EV manufacturers remain in the red, and more consolidation may occur as companies exit the market.
Even worse, you may run into the following problems: oversupply This comes just as the pace of growth in China's EV market is showing signs of slowing.
What sets these companies apart from each other and how will they rise to the challenges of an increasingly competitive EV market? luck Let's take a closer look at these three EV stars and what sets them apart from the competition.
BYD
Wang Chuanfu founded BYD, or „Build Your Dreams“, in 1995 not as a car company, but as a manufacturer of batteries specifically for mobile phones. The company expanded into the automotive business in 2003 after acquiring small car maker Xi'an Xinchuan Automobile. The company launched its first vehicle two years later, an internal combustion engine car called the F3.
In 2008, BYD debuted its first plug-in hybrid electric vehicle, the F3DM. That same year, Berkshire Hathaway invested $230 million in the EV maker. Charlie Munger, Warren Buffett's longtime business partner, called Wang „a combination of Thomas Edison and Jack Welch“ in 2009. luck interview.
BYD is currently an established and dominant player in China's EV market. The company sells both battery electric vehicles and plug-in hybrid vehicles, and consistently ranks among the top monthly electric vehicle sales in Japan.
Jérôme Fabre—Bloomberg/Getty Images
BYD has succeeded in vertically integrating its business, increasing profit margins and even owning its own fleet for exporting cars. Our history as a battery manufacturer is also an advantage. BYD internally battery technology It is touted to be a safer option than the lithium-ion batteries used in most EVs.
„They used to advertise their batteries as never catching fire. It was very catchy,“ said Ding Yuqian, head of China automotive research at HSBC. He pointed out that BYD is one of the few EV manufacturers that manufactures its own batteries in China, giving it a competitive advantage compared to its peers.
BYD, which has taken control of the Chinese market, is currently expanding overseas. EV manufacturers are entered At least 58 overseas markets including Germany, Japan, Australia and Thailand. The company is also building manufacturing facilities in Thailand and Brazil, and is working on facilities in Hungary and Indonesia as well.
The company's aggressive push for global expansion has also led to regulatory backlash. BYD is one of several Chinese EV makers targeted by the European Union's anti-subsidy investigation, alleging that the company received „unreasonable“ levels of subsidies from the Chinese government. be. (On BYD's side, it's simply better managed (from European competitors)
The company sold 3.02 million vehicles in 2023, meeting its own sales goals and surpassing Tesla in battery electric vehicle sales in the process. (BYD overtook Tesla much faster if you include Tesla's hybrid vehicles). Estimates released by BYD in January show that full-year net profit is expected to reach 31 billion yuan ($4.3 billion) in 2023, an 85% increase from a year ago.
lee auto
Founded in 2015, EV startup Li Auto is backed by some of China's biggest tech giants, including Meituan and ByteDance.company debuted Founder Li Xiang started the company after working in the internet field for 20 years and previously founded Autohome, an online platform for Chinese consumers to buy cars.
Li has chosen a different path than other Chinese EV startups by focusing on plug-in hybrids rather than pure electric vehicles. Hybrids can be powered by either gasoline or electricity, and are often positioned as a transitional technology to encourage skeptics concerned about range. This decision may have paid off. In just six months since Li Auto launched his first vehicle model in December 2019, sales have surpassed his 10,000 units.
Li Auto, often referred to as Tesla's competitor, targets China's premium market. Unlike BYD's mass-market models, Li Auto's products are more niche, including sport utility vehicles and large utility vehicles targeted at wealthy Chinese consumers with large families.
Shen Qilai—Bloomberg/Getty Images
The company recently entered in the battery electric vehicle sector with the company's recently announced minivan, the Li Mega.lee auto is released The company is launching four new models this year as it embarks on a multi-product strategy.
HSBC's Ding believes Li Auto's transition to battery electric vehicles will work out well for the company in the long run as battery costs come down. Consumers may also appreciate investing in Li Auto's fast charging capabilities. The new Li Mega has range It can travel 500km with just 12 minutes of charging.
In 2023, Li Auto sold 376,030 vehicles, an increase of over 180% year-on-year. Unlike its peers, Li Auto has no plans to cut prices, pledging to launch cars above 200,000 yuan ($27,800), a price range traditionally between mass-market and luxury cars. There is.
The company also investment The company's president, Ma Donghui, predicts that self-driving cars will become widely accepted in just a few years.
Nioh
Nio started in 2014. was founded by Chinese businessman William Li. The company attracted support from major Chinese and global investors such as Tencent, Temasek, and Lenovo. The company was listed on the New York Stock Exchange in 2018.
The EV startup has also attracted state-backed investors. In 2020, Nio sold a 17% stake to the government of the eastern Chinese city of Hefei. (government converted into cash after 1 year, earn returns of over 500%).And last year, Nio netted $2.2 billion. investment The funds come from CYVN, an investment fund managed by the Abu Dhabi government.
Shen Qilai—Bloomberg/Getty Images
Nio, like Li Auto, positions itself as a premium brand. However, the company focuses more on research and development, design, and user experience. For example, the company touted his AI-assisted driving ambitions and launched Nio. phone used with that car. You can use your phone to automatically drive your car to your location or initiate automatic parking.
But besides the premium user experience and sleek design, Nio is experimenting with a different business model: battery swapping and leasing. The company invested in Battery exchange This network allows drivers to quickly power up their vehicles by swapping out power cells, without having to wait for the vehicle to charge.
I also recommend Nio battery lease This option allows customers to lease the power cell instead, reducing the cost of the car by approximately 70,000 yuan ($9,858). Batteries account for a significant portion of vehicle costs (up to approximately 40%).
It's a unique and possibly dangerous approach, Ding says. „This business model doesn't have much overlap within her other EV companies,“ she says. “Capex may be a little bit higher in the early stages of a swap station.”
Even as Nio differentiates itself technologically, the company needs to convince investors that its financials are heading in the right direction.
Nio reported a 2023 net loss of 20.72 billion yuan ($2.88 billion), up 43.5% from a year earlier. The company delivered 160,038 units in 2023, an increase of 30.7% from the previous year. The company plans to launch a mass-market brand in May.
Asia's future 30, Produced in partnership with Fortune and BCG, this report highlights 30 companies across Asia best positioned for future growth.can be discovered list here.
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