[REPORTER'S DIARY] China's conquering of EV industry is coming true

Industry

Published: 04 Dec. 2023, 18:07 Updated: 04 Dec. 2023, 18:13

[REPORTER'S DIARY] China's conquering of EV industry is coming true

Visitors watch the BYD's Atto 3 at the IAA motor show in Munich, Germany on Sept. 8. [AP/YONHAP]

SHANGHAI — Strolling down the streets of Shanghai, China, EVs are seen unexpectedly often on the roads, with almost half of them having green-colored plates that represent eco-friendly vehicles.

But one thing that surprised this reporter most was that almost all of the EVs were from local brands like BYD and Roewe, with very occasionally a few Teslas.

China is trying to chase two hares at once — price competitiveness and long mileage — to electrify the roads of the world with their own cheap EVs. The journey seems to be going smoothly with Chinese brands expanding their presence in U.S. and European markets and global automakers selecting their cheap batteries in an attempt to cut the price of their automobiles.

This contrasts with Korea which keeps failing to develop cheaper batteries, with companies scrambling to withdraw or slow down their EV investment as the sales of eco-friendly vehicles have remained sluggish in recent months.

EVs with exclusive license plates in Shanghai, China. [SARAH CHEA]

During the three-day trip in Shanghai at least, only a Lafesta, a gasoline-powered sedan, was seen from Hyundai Motor or Kia. No EVs from the Korean brands were spotted.

China is the world's largest EV market, accounting for more than 60 percent of total EVs sold globally last year. A total of 6.89 million eco-friendly vehicles, including fully electric cars and plug-in hybrids, were sold in China, making up 25.6 percent of all new passenger cars sold in the country.

It is more than double the previous year, when eco-friendly cars accounted for only 12.7 percent.

“Considering that statistics about the Chinese market are not entirely reliable, the industry sees that the EV share is higher than the data,” said an industry source.

An electric car with an exclusive license plate is charged at an electric vehicle charging station in Beijing, China. [EPA/YONHAP]

China Passenger Car Association predicted that eco-friendly car sales will reach 8.5 million this year, with the share increasing to 36 percent.

Korea sold 164,482 eco-friendly vehicles during the same period which only took up 9.8 percent of all cars sold. That’s even below the world’s average, which stood at 10 percent. Of all cars sold in the United States last year, only 4.6 percent were eco-friendly.

A notable aspect is that Chinese EVs are expanding their presence not only domestically but also globally. China even became the No. 1 exporter to Korea for three consecutive months since August, driven by rising sales of Shanghai-made Tesla Model Ys.

A Tesla is charged at an EV station in Shanghai, China. [EPA/YONHAP]

The flood of Chinese EVs not only impacted the market itself, but also the European brands that have China as their biggest market. Volkswagen, which relies on China for half its sales, lost its top position to BYD last year.

The market share of Chinese EVs in the European Union (EU) rose to 8 percent, and will likely increase to 15 percent, according to the EU.

“Chinese EV imports could cost the EU over 24 billion euros [$26 billion] in economic output in 2030, or 0.15 percent of the bloc's GDP,” Allianz Trade said in a recent report.

The 24 billion euros is half of France-based Renault Group’s annual sales.

China’s EV batteries are also expanding their influence, with them holding more than 60 percent of the entire battery market. The market share of Chinese batteries in the European market doubled to 34 percent in 2022 compared to 15 percent two years ago.

It’s not the right time for Korean automakers and battery makers to relax.

The transition to EV is not a choice but a must, and the EV industry is no longer new, but a cutthroat market that needs to compete with price competitiveness.

China's EVs are evolving quickly and if Korea loses in the price war, the whole market will be swallowed by China in a snap.

BY SARAH CHEA [chea.sarah@joongang.co.kr]