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中国小型电动汽车制造商从大型汽车制造商身上获利
The big international carmakers like General Motors and Volkswagen may think their electric vehicles (EVs) will keep selling well in China. But they could face a surprise.
Local carmakers have already taken a big share of the world's largest car market. It is estimated that car sales amount to $500 billion in China each year.
Buyers looking for smart technology
When Beijing office worker Tianna Cheng planned to buy a car, she chose between three Chinese brands, Xpeng, BYD, and Nio. She did not consider foreign cars.
"If I was buying a gasoline car, I may have considered foreign brands," the 29-year-old said as she drove home from work. "But I wanted an EV, and other than Tesla, I saw few foreign brands applying advanced smart technology properly."
Cheng said that foreign car brands did not have what she was looking for. She wanted an EV able to give her the "comfort" of having a smartphone-like experience in her vehicle.
"Foreign brands are so far from my life and lifestyle," said Cheng. She uses a mobile device to connect to shopping websites and control the windows and music while she is in her car.
Cheng is one of many Chinese who are buying electric vehicles. The China Association of Automobile Manufacturers reported that sales increased in the first four months of 2022. During that time, the number of electric or plug-in hybrid passenger cars more than doubled from a year earlier to 1.49 million cars.
Vehicles with these kinds of technologies represent 23 percent of China's passenger car market. However, vehicle sales fell 12 percent because of a drop in demand for gasoline cars.
There are almost no foreign brands among China's top 10 makers of so-called new energy vehicles this year. The only exception is Tesla, which is in third place. All the rest are Chinese brands, from BYD and Wuling to Chery and Xpeng.
China's leader is BYD. The company has sold about 390,000 EVs in the country this year. That is more than three times as many as worldwide leader Tesla sold in China. The top-ranked traditional carmaker is Volkswagen's FAW Group, in 15th place for EV sales.
Since the 1990s, foreign carmakers sold 60 to 70 percent of the passenger cars in China. But in the first four months of 2022, their sales went down to 52 percent, and in April it was at 43 percent.
Nissan chief Makoto Uchida told Reuters that some brands "could disappear in three to five years" in China.
"Local brands are becoming stronger," said Uchida. He added that the quality of EVs from Chinese makers had improved quickly, with progress being made in the space of months. He said foreign carmakers had to move quickly in the design, development and launch of new models. He warned, "...If we were slow, we would be left behind."
Hi-technology natives
Bill Russo is a former Chrysler executive who now heads the Shanghai-based advisory business Automobility. He said foreign brands need to change the situation quickly because they control less than 20 percent of China's only growth auto market.
"Chinese brands are winning the race to EV," said Russo. He added that consumers' desire for cars that are more like smartphones on four wheels is not likely to change. He considered this a problem because, "Traditional companies are not hi-tech natives."
General Motors (GM) is now trying to gain younger buyers in big cities. The company announced plans to spend more than $35 billion worldwide by 2025 to make electric cars. That includes more than 30 new EVs, over 20 of them in China. This year, for example, GM will launch the all-electric Cadillac Lyriq sports utility vehicle.
GM said it was using smart technologies including driver assistance on highways, high-level or "aviation-grade" cyber security and wireless software updates.
Fast cars?
Volkswagen is spending $55 billion worldwide on EVs by 2026. Its new ID. series began selling in China early last year. VW missed its goal of selling 80,000 to 100,000 ID. cars last year. It has sold only 33,300 cars through April.
One concern for foreign brands is that their new EVs are aimed at the American and European markets. The cars are designed for performance and to last a long time. But drivers in China rarely can drive faster than 60 kilometers an hour because of crowded roads.
Volkswagen said EV demand in China was strongly linked to the "smart car" idea. It is investing more in local research and software.
Among those the international carmakers need to attract are people in big cities with money to spend. Li Huayuan, a civil engineer from Shanghai, is one of those consumers.
Li briefly considered Japanese and German brands before he bought his BYD electric car last year for $43,000.
"Seems to me only Tesla stands out when it comes to American brands," he said from his parked BYD car in the city of Mianyang in Sichuan where he is working on a project.
"The other brands don't even look competitive to me," he added.
I'm Jill Robbins.
And I'm Gregory Stachel.
Norihiko Shirouzu reported on this story for Reuters. Jill Robbins adapted it for Learning English.
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Words in This Storybrand – n. a group of products made by a company that shares a name and certain qualities
plug-in hybrid – adj. a vehicle that is powered by both electricity and gasoline that can be connected to an electricity system to add power to its battery
consumer – n. a person who buys goods and services
cyber – adj. dealing with computers
update – n. new, improved, or fixed software which replaces older versions of the same software
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