How to tap into China’s burgeoning EV market?

LEE DO-SUNG
The author is a Beijing correspondent of JTBC.

“Thirty minutes from here to the entrance,” read the sign in front of the exhibition hall of Xiaomi, a home appliance and mobile phone maker in China. The company made its first appearance at the Beijing Motor Show which opened on April 25. Crowds gathered to see Xiaomi’s first electric car, the SU7, in person. The venue where Chairman Lei Jun personally gave the presentation was already packed 30 minutes before the opening.

The Beijing Motor Show, which had been canceled due to Covid-19, returned after four years. In the meantime, Chinese electric cars have improved remarkably. Not only Xiaomi, but also other Chinese companies such as BYD proved popular on their home turf. After surpassing Tesla, BYD became the top EV producer in the world, and Geely became popular in China after acquiring one European car brand after another.

The “cheap” image of Chinese products is long gone. The luxury electric car U7, unveiled at the show, has 1,287 horsepower and takes only 2.9 seconds to go from zero to 100 kilometers per hour. It directly competes with high-end European cars. Hongqi, Nio and Dongfeng, lesser known brands in Korea, also attracted attention by unveiling their new cars.

Global companies also participated in the EV war. Not only major brands like Mercedes, BMW and Audi but also high-end brands like Rolls Royce and Lamborghini came to Beijing. For them, China is a market they cannot give up. A total of 8.41 million EVs were sold in China last year, accounting for about 60 percent of the global market.

Controlling both supply and demand, Chinese electric carmakers have the government’s support behind them. On his visit to the motor show, Premier Li Qiang said that China will continue to lower the entry barriers to the Chinese market and create an environment free of discrimination.

Hyundai Motor Group also set up an exhibition hall. Hyundai presented high-performance electric vehicles and premium models targeting the Chinese market. But the situation is not easy. Hyundai once had a more than 10 percent market share in China, but it has fallen to 1 percent now. Sales has declined by more than 70 percent in seven years. A Chinese reporter covering the automobile industry said, “Hyundai does not have dominance in either design or durability, and despite the image of high quality, it is not sufficient to lure Chinese consumers into buying them.”

Hyundai Motor Group reportedly sent 1,200 employees to the show, including those in marketing and sales as well as R&D. Could Hyundai return to the Chinese market after witnessing the dramatic rise of Chinese electric cars? A Hyundai Motor insider said, “Hyundai will target the market with differentiated products, as China is still an attractive market.”