Government support for electric vehicles coupled with growing consumer interest has allowed Chinese companies to dominate their domestic market – the world's largest car market.

Shanghai, where a car show is held every two years - a must-attend event for global manufacturers - has shown that Chinese brands can "compete with all traditional car manufacturers at all levels - performance, quality, comfort, there is nothing they can not do," said Elliot Richards, a specialist in electric vehicles.

At the Shanghai International Motor Show on April 19, 2023 © Hector RETAMAL / AFP

For Richards, "this show marks the end of the internal combustion engine and the beginning of the era of electric vehicles".

Electric car companies are well aware that they are starting to catch up with their predecessors on fossil fuels.

"We consider high-end gasoline vehicles such as BMW, Mercedes Benz and Audi as our main competitors," William Li, CEO of China's Tesla Nio, told AFP.

NIO CEO William Li at the Shanghai International Motor Show on April 19, 2023 © Hector RETAMAL / AFP

Sales of electric and hybrid cars doubled in 2022 and account for more than a quarter of vehicles sold, a level never seen before, according to the China Federation of Private Car Manufacturers (CPCA).

Despite the global slowdown in the automotive sector, electric vehicles in China will account for more than 40 percent market share this year, Li said.

At the Shanghai Motor Show, dozens of new models were on display, from both new and old manufacturers.

"The future is here, now," Mike Johnstone, a senior executive at British luxury brand Lotus, told AFP. There is now a proliferation of electrical products in China, "and it changes the whole market."

A Lotus Eletre being charged at the Shanghai International Motor Show on April 19, 2023 © Hector RETAMAL / AFP

"Getting ahead"

And for good reason: Beijing has devoted enormous resources to this industry.

"They gave up developing gasoline engines" because they couldn't compete with the rest of the world, Richards said.

"So they thought: +With electric vehicles, we can get ahead of everyone else+".

Starting in the 2000s, central and local governments pumped billions of dollars into subsidies and tax breaks, and awarded public transport contracts to electric vehicle companies.

"It's rooted in the nature of the country's economic system: the Chinese government knows very well how to focus resources on the industries it wants to develop," Zeyi Yang wrote in the journal MIT Technology Review.

The infrastructure necessary for the development of this sector has also been developed. According to the government, there are now more than 5.8 million charging stations in China.

Electric car charging stations in Shanghai, China, April 19, 2023 © GREG BAKER / AFP/Archives

Guangdong province alone has about three times as many bollards as the entire United States, according to Bloomberg data.

94 brands, 300 models

Foreign brands have also been able to taste these preferential policies.

These have even managed to attract the American Tesla, leader of the industry, strengthening the reputation of the sector and stimulating competition.

Today, the Chinese market – "the most dynamic in the world" according to Counterpoint Research – has more than 94 brands that offer more than 300 different models.

All this is closely scrutinized by foreign competitors, forced to reinvent themselves in this highly competitive environment.

The brands in the Chinese market "serve as a reference" for others, said Lotus' Johnstone.

And the Chinese are now eyeing foreign markets.

This is the case of BYD, one of the largest sellers in the country, which markets passenger cars in fifty territories, including Europe, one of its priorities as for many other Chinese groups.

The Shenzhen-based group has set a target of exporting 300,000 vehicles worldwide this year, up from 50,000 last year, according to state broadcaster CCTV.

An electric Neta S at the Shanghai International Motor Show on April 19, 2023 © Hector RETAMAL / AFP

The Zeekr brand, which belongs to local automotive giant Geely, announced that it would market the first models in Sweden and the Netherlands at the end of the year, before arriving in other European countries.

Especially since mentalities around the quality of Chinese production are changing, says Spiros Fotinos, managing director Europe of Zeekr.

"Consumers see a lot of innovative safety technologies, with driver assistance systems that are really state-of-the-art," he told AFP.

But the game is not yet won, warns Elliot Richards, who notes that Chinese automakers in the West will have to adapt to this market, very different from theirs.

The stand of the Chinese manufacturer Hong Qi at the Shanghai International Motor Show, April 19, 2023 © Hector RETAMAL / AFP

"Karaoke machines in cars, for example, which are very popular in China, are not as popular in Europe," he says.

In any case, ambition is not to be outdone.

The Asian giant, the world's largest emitter of greenhouse gases, is targeting car sales in 2035, mainly composed of so-called non-polluting vehicles.

© 2023 AFP