China’s biggest electric carmaker has waged war on Western rivals by calling on the country’s auto manufacturers to unite and “demolish” their competition.
BYD’s founder Wang Chuanfu made the declaration after his company delivered its five millionth electric vehicle, as he claimed the “time has come for Chinese brands”.
The rhetoric has been seen by some as the clearest indication yet that Western car brands are in danger from China’s agile and well-resourced suppliers.
Former Aston Martin chief executive Andy Palmer said manufacturers in Europe and the US face a “real and present danger”.
Mr Chuanfu made the comments during a presentation earlier this week, as he claimed “it’s an emotional need for the 1.4 billion Chinese people to see a Chinese brand becoming global”, according to Reuters.
He signed off his speech by encouraging China’s car firms to “demolish the old legends and achieve new world-class brands”.
Slowing market conditions in China have led to the country’s fast-growing carmakers looking to the West for new customers.
China has piled into the EV sector much quicker and with more capital than Western brands, aided by state support and a nationwide strategy to make parts readily available.
The country now controls the majority of the refinery capacity for lithium, a crucial mineral for battery making.
It also has access to graphite and other components, while the world’s largest battery maker for EVs is in the city of Ningde in the Fujian province.
All of this puts China in a strong position to take on competitors abroad.
Mr Palmer said China has “created an industry, thanks to government support, that has allowed them to take leadership in EVs”.
“They’ve got a massive home market that gives them economies of scale, and they have the government that’s backing them to go overseas,” he said.
“What does that mean to European carmakers? It means they’re going to come under ever more pressure and it’s going to tighten their margins. Maybe some of them won’t survive the pivot to electrification.”
For consumers, the picture is rosier as China is offering high-quality cars at cheaper prices, Palmer added.
The boss of Vauxhall-owner Stellantis last month warned of an “invasion” of Chinese electric cars.
Carlos Tavares said Stellantis faces a “brutal scenario” where it must compete with Chinese-made cars which are a quarter less expensive while having to invest billions into electrification.
He is not alone in raising concerns, as other executives believe UK and Europe could be too slow in responding.
Cars can be made with greener energy in Europe, which ought to mean they receive more favourable tax and tariff treatment.
This keeps Western carmakers competitive as China is still reliant on carbon-intensive steel.
One industry figure said Chinese-made cars should face higher tariffs, while domestically-built vehicles should receive better tax treatment because of greener production.
BYD overtook Tesla as the world’s top electric car maker including plug-in hybrids last year.
It aims to outpace Elon Musk’s brand on purely battery-powered cars in 2023.
Source: finance.yahoo.com