Electric vehicles produced in China are making a global impact, and not exclusively from Chinese automakers. Nissan’s recent announcement to sell electric vehicles developed in China worldwide reflects the broader trend of automakers adapting to China’s increasing influence in the automotive industry.
Nissan’s decision, as reported by Reuters, highlights the appeal of lower manufacturing costs in China, pushing global players to reassess their strategies in response to China’s burgeoning automotive capabilities.
Chinese electric vehicle manufacturers have a notable advantage as they expand globally—their dominance in the supply chain enables them to maintain cost competitiveness. Companies like BYD, which garnered early success with an investment from Berkshire Hathaway, control the entire EV battery supply chain, from raw materials to finished battery packs, and even design their own semiconductors. Similar advantages are enjoyed by other Chinese EV makers such as Nio, Xpeng, and Li Auto to varying degrees.
The cost advantage from Chinese manufacturers is prompting legacy automakers worldwide to prioritize cost-cutting measures. Ford CEO Jim Farley has emphasized that Chinese automakers are perceived as the main competitors, surpassing traditional rivals like GM or Toyota.
While there may be assumptions about the quality of Chinese EVs, Elon Musk, CEO of Tesla, acknowledges the competitiveness of Chinese carmakers, attributing it to exceptional manufacturing capabilities and a strong work ethic.
Despite subsidies in the Inflation Reduction Act providing some protection to American automakers against Chinese EVs, industry leaders recognize the inevitability of Chinese EVs entering the market. Ford Motor executive chairman Bill Ford Jr. has cautioned that preparations are needed for their arrival.
This concern extends beyond automakers. German car-parts manufacturer ZF Friedrichshafen has expressed the need to enhance sales within China, acknowledging the challenge posed by Chinese automakers and their local suppliers as they expand globally.
Nissan’s decision to sell China-developed EVs in markets overlapping with BYD, including Southeast Asia and Europe, aligns with the broader trend of major automakers like Tesla, Ford, and BMW expanding their exports of cars manufactured in China.
Within China, the largest EV market globally, foreign automakers like Nissan have faced challenges from domestic brands. In response, Nissan aims to collaborate with China’s Tsinghua University on joint research efforts in EV technology to better understand the Chinese market and tailor strategies to meet customer needs.
As Chinese EV makers have demonstrated, success in the competitive Chinese market can translate into success on a global scale.
