EV Car carrier BYD Explorer departs on its maiden voyage to deliver EVs to Europe

China is now targeting domination of the global EV, solar panel and wind turbine markets as Western governments foolishly continue their crusade to shift away from fossil fuels to renewables.

Last year China’s BYD, backed by Warren Buffet of Berkshire Hathaway fame, passed Tesla as the world’s largest EV company.

China is riding the nation’s EV boom to revolutionize the car business and leave traditional automakers in the dust.

Legacy Auto executives acknowledge that Chinese EV companies are 30% faster in developing new EVs. 

Rather than following the traditional new model development protocol, these Chinese companies have embraced working on many phases of EV development at once.

They’re willing to substitute smaller, faster suppliers for traditional ones. They run more virtual tests instead of time-consuming mechanical ones. And they’ve redefined when a model is ready for the market. 

Western automakers admit they’re chasing the Chinese auto companies, once considered also-rans. However, the fear now is that Chinese EV companies may flood the market with cheap EVs at a time when demand is slowing. Financial losses would explode. 

NIO, one of China’s leading EV manufacturers, takes less than 36 months from the start of a project to delivery to customers. That’s a year quicker than traditional auto manufacturers.

Zeekr, an EV venture of Chinese auto giant Geely, can develop EV models in 24 months. Part of their strategy is to develop various models – SUVs, multipurpose vehicles and hatchbacks – that share the same manufacturing and digital architecture with other Geely brands such as Polestar and Smart. 

Another characteristic of the Chinese EV market is the rapid development of new models and the refreshment of older models. Chinese buyers tend to favour the latest models.

According to China’s passenger car association, car models launched last year contributed 90% of the nation’s passenger car sales growth. 

An analysis by AlixPartners shows that “domestic EV makers offer models for sale for an average of 1.3 years before they are updated or refreshed, compared with 4.2 years for foreign brands.” 

Instead of being also-rans, Chinese EV companies are being mimicked and even partnered with for their skills rather than as a ticket to enter China’s auto market.

Tesla’s Elon Musk and Ford’s CEO, Jim Farley, have warned that their biggest future threats will be from Chinese EV companies. 

Germany’s Volkswagen is partnering with Chinese EV companies seeking to speed up its design and manufacturing processes. The head of Volkswagen’s China subsidiary noted that it traditionally took four years to bring a new model to market compared with 2½ years for Chinese EV companies. 

NIO, once considered to be China’s Tesla-killer, has redefined when a model is ready for market by utilizing “minimum viable products,” which means they build their EVs with more advanced chips, cameras or sensors than their software can support at the time.

Once it has developed the new technology to utilize all the unused capabilities, the vehicle is sent software updates over the air. 

As China works to dominate the global EV market, it already dominates the solar panel market.

It secured access to that technology from European manufacturers and then capitalized on the country’s cheap labour, power and abundant polysilicon supply to undercut competitors. 

China now controls 80% of the solar panel market and has plans to build more than 1,000 gigawatts of N-type cell capacity, the next generation after P-type, which will be 17 times the capacity of competitors.

This market dominance results in Chinese modules costing half that of those made in Europe and two-thirds less than U.S. panels.

Is it any wonder solar subsidies and tariffs are needed in Europe, USA and Australia in order to compete? 

When it comes to wind turbines, China controls nearly 60% of the global market, largely because it has been installing significant generating capacity and also because the country’s policy is to make renewable energy a foundation for economic growth.

In 2022, ten of the world’s top 15 wind turbine manufacturers were Chinese, and they delivered 56% of the units installed. Having provided two-thirds of the 156 GW of capacity installed last year, China’s global market share further increased. 

Western countries are trying to protect and grow domestic competitors to China in all three markets – EVs, solar panels and wind turbines.

From government investigations into Chinese manufacturers anticompetitive actions to installing high tariffs and outright restrictions on access to local markets, Western governments are battling a Chinese commercial invasion. 

At risk are jobs, capital investments and tax revenues, along with potential national security implications.

Recent renewable energy market slowdowns and turmoil have only helped strengthen China’s hand as its actions are blessed by its government, which is looking to the long-term for these industries to underpin the country’s economy. 

This economic policy battle will generate unintended consequences that we will only see when they emerge. The biggest loser will be Western consumers forced to buy more expensive items once China has achieved total market dominance.  

Governments, businesses and consumers should stop buying Communist China’s products whenever it’s possible to do so.

Instead, we should be buying locally made alternatives or from countries that share our values and do not pose a threat to our security.

As someone recently observed, every dollar we spend buying Communist China’s products buys them a bullet they may well use against us one day!

This article initially appeared in The Maritime Executive newsletter. Minor amendments have been made including additional commentary. See their website at: https://www.maritime-executive.com Images/cartoon courtesy of BYD, Getty and John Spooner.

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