Chinese electric vehicle (EV) automakers have recently faced mounting pressure when expanding their overseas markets. Currently, there are indications that the UK and the US are preparing to initiate an anti-subsidy probe into Chinese EVs, as well as assessing the national security implications associated with their products. The coalition alleges that China has gained a competitive edge through what they deem to be unfair subsidies, raising the prospect of implementing tariffs as a response.
As a matter of fact, the global popularity and competitive edge of Chinese EVs stems from technological innovation and superb quality, rather than government subsidies.
According to Mokter Hossain, an assistant professor at the College of Business and Economics, Qatar University, the competitive edge of Chinese EV companies is the result of a multifaceted strategy that combines governmental support, market scale, rapid innovation, and strategic global positioning.
In Hossain's article published in California Management Review, he summarizes several technological factors underlying China's unique advantages.
Rapid innovation and product development contribute to Chinese EVs' popularity. Swift application of technologies like advanced battery technologies, autonomous driving capabilities, and connected car services, Chinese EV companies can bring new models and features to the market faster than their international competitors. Especially the speedy upgrading of battery technology, which is regarded as the 'lifeblood' of EVs, cements China's position as a frontrunner in the auto industry.
China excels in the production of budget-friendly cobalt-free battery solutions. Lithium iron phosphate (LFP), an outstanding energy storage material known for its affordability, robust life cycle, and safety features, aligns well with automotive requirements. It is primarily produced in China, Oliver Petschenyk, a powertrain expert analyst at GlobalData, told Just Auto, an automotive industry news site and part of leading information service company GlobalData.
The focus on advancing battery technology has led to improvements in energy density, charging speed, and battery life, enhancing the performance and appeal of Chinese-made EVs, said Hossain.
More importantly, many Chinese companies have been focused on EV manufacturing from the beginning, unlike traditional automakers whose R&D focus is switching from internal combustion engines to EVs. This allows them to design and optimize their vehicles specifically for electric propulsion without being constrained by legacy systems.
In this regard, some analysts argue that Western car manufacturers are suffering from self-inflicted pain as they delayed the all-but-inevitable switch to EVs, having betted on massive gas-guzzlers for too long, according to an opinion article in Project Syndicate co-authored by Gernot Wagner, a climate economist, and Shang-Jin Wei, a professor at Columbia Business School.
Western countries should focus on addressing their internal issues instead of viewing China as a threat to their domestic market. The fundamental solution to jumping out of the trap and improving their global competitiveness lies in enhancing technological innovation rather than resorting to tariffs. Tariffs, aimed at Chinese EVs or other products such as solar panels, which are crucial for the global green transition, are not justifiable, said Wagner and Wei.
The electric vehicle industry is globalized. Only through cooperation and fair competition can mutual benefits and technological progress be achieved, said Lin Jian, spokesperson of the Foreign Ministry.
Source: Science and Technology Daily
