Chinese automakers bet on EV boom, ramp up factories
ZHAOQING, China — Xpeng Motors, a Chinese electric car startup, recently opened a large assembly plant in southeastern China and is building a matching factory nearby. It has announced plans for a third.
Another Chinese electric car company, Nio, has opened one large factory in central China and is preparing to build a second a few miles away.
Zhejiang Geely, owner of Volvo, showed off an enormous new electric car factory in eastern China last month rivaling in size some of the world’s largest assembly plants.
Evergrande, a troubled Chinese real estate giant, has just built electric car factories in the cities of Shanghai and Guangzhou and hopes to be making almost as many fully electric cars by 2025 as all of North America.
China is erecting factories for EVs almost as fast as the rest of the world combined. Chinese manufacturers are using the billions they have raised from international investors and sympathetic local leaders to beat established automakers to the market.
Success is far from assured.
The players include startups, electronics manufacturers and other car industry rookies. They are betting that drivers in China and beyond will be willing to spend $40,000 or more for brands that they had never heard of.
Chinese automakers concede that experience gives the established car companies some advantages. But they insist their plans will work.
“We have the will, and we have the patience,” said He Xiaopeng, chairman and chief executive of Xpeng.
The Chinese industry has momentum.
China will be making
over 8 million EVs a year by 2028, estimates LMC Automotive, a global data firm, compared with 1 million last year. Europe is on track to make 5.7 million EVs by then.
General Motors and other North American automakers have plans to catch up.
In April, President Joe Biden called for the United States to step up its EV efforts. During a virtual visit to an electric bus factory in South Carolina, he warned, “Right now, we’re running way behind China.”
North American automakers are on track to build only 1.4 million electric cars a year by 2028, according to LMC, compared with 410,000 last year.
Global car companies are helping China’s lead.
Volkswagen recently began construction on its third Chinese factory designed to produce electric cars.
China already has the electric car infrastructure, thanks to a government-backed nationwide rollout of over 800,000 public charging stations. That is almost twice as many as the rest of the world, although drivers in the United States — who are more likely to live in single-family houses — can
more easily plug in their cars at home.
With a slower deployment of charging stations outside China, automakers elsewhere plan to continue building some plug-in hybrid cars with small gasoline engines for a few more years. But the market for fully electric cars is already bigger than for plug-in hybrids, and the electric cars’ lead is widening rapidly. Automakers like GM plan to eliminate gasoline and diesel engines entirely in the next 15 years.
For the new Chinese cars, name recognition will be a major challenge. The brands are mostly unfamiliar even to Chinese drivers. On roads filled with Buicks, Volkswagens and Mercedes-Benzes, they could struggle to stand out.
Geely, an industry veteran with recognized brands in China, has named its electric brand Zeekr, which rhymes with “seeker.” It plans to begin delivering cars in October.
Michael Dunne, chief executive of ZoZo Go, a consulting firm specializing in the electric car industry in Asia, said the industry’s outlook was becoming clear: “China is going to be the global dominator when it comes to making electric cars.”