Tesla In China’s Ev Market

[dropcap]T[/dropcap]here is a lot to expect in the future for the EV industry in China. A new EV (electric vehicle) era has already begun in China (especially in the Tier 1 cities), but it is time for another shift in the electrification process.

We already had a text written on this subject, but here is an update on this matter.

Did you know that in 2021 more than 4 of every 5 EV’s sold in China were local EV brands? Can you guess why Tesla is the only foreign company among the top 10 EV manufacturers?

Well, we were wondering about that ourselves.

Our best guess is that the foundation of Tesla’s initial success can be traced back to its relationship with the Chinese government. Initially, China needed a market leader and foreign help in building the EV supply chain and opening the retail consumer market for electric vehicles. Tesla has done that job well.

In 2019, Tesla signed a VAM with the Shanghai Government to build factories in China. Tesla got a good deal on land and low-interest loans, and the only thing China was asking was that Tesla grooms local suppliers and spur the Chinese EV industry. Today, thanks to the Giga factory in China, Tesla is leading the world EV market with a 15% share.

So, now it’s easier for us to understand what brought about the loss in market share for all other traditional multi-national carmakers. They are rapidly losing market share, and if they don’t switch to EV soon, it will be even tougher to come on board later. In China, that is.

This situation in the vehicle market in China is particularly bad for VW Group, holding the largest market share of the vehicle market in China. In 2020, VW sold more than 2.5 million traditional car units in China.

In 2021, VW introduced a new EV – ID.X, trying to catch up with Tesla, but a little too late if you ask us. In the new era of electrification and the EV market, VW is no longer a market leader. Not by far. Not in China.

[box type=”shadow” align=”” class=”” width=””]VW had success in Europe with their EV version, but China is a tough nut to crack. In May 2021, VW even introduced the new business strategy – Accelerate, aiming at the transformation into a software-driven mobility provider with digitalization, autonomous driving.[/box]

And what about Europe, the USA, Canada? Well, a new era in the vehicle market may begin sooner than we think for the rest of the world.