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The Shanghai Auto Show should have dispelled any lingering doubts about China’s position as a global leader in electric vehicles. China is creating and selling attractive EVs and profiting from the sales. Chinese manufacturers are responsible for eight of China’s top 10 best-selling EV vehicles.
Unlike the U.S. market, these are not merely premium and luxury products that a small segment of society can purchase. The Chinese carmaker BYD, which Warren Buffet finances, debuted the Seagull EV at the exhibition, and the understated car drew some of the event’s biggest crowds. According to industry observers, this car, which begins at 78,000 yuan ($11,300), is anticipated to become the most popular EV in the nation.
The largest EV market in the world is already China. However, as the Financial Times pointed out in its auto show coverage, China is also on track to unseat Japan as the world’s largest exporter of cars this year after passing Germany in 2022.
Foreign automakers are faced with a dual difficulty as a result of this trend. First, foreign companies like Buick, BMW, Mercedes-Benz, and others face domestic competition after years of dominating China’s premium and luxury market. These same automakers are also under pressure in their own countries now that China is selling cars to Europe.
To be clear, I do not anticipate Chinese brands to pursue the American market aggressively now. But I’m careful about how these businesses do in Europe.
