A trade war is brewing between China and the West, with the stakes being who will dominate the global electric vehicle market.
Outside the port city of Ningbo, Chinese automaker Zeekr rolls out luxury products EV and growing rapidly. The factory has only been operational for three years, but this year its production has more than doubled.
Zeekr is a new player in the electric vehicle market, but it has unbridled ambition to sell its high-end, high-tech cars overseas. It is a subsidiary of a state-backed company, Geely.
However, critics from the US and EU say the Chinese government’s financial support and vast resources give companies like Zeekr an unfair advantage.
During a recent trip to Beijing, US Treasury Secretary Janet Yellen accused China of “overproduction” and “dumping” of its electric vehicles on foreign markets. The European Commission has opened an investigation into whether to impose punitive tariffs on Chinese industry.
But at Zeekr, the threat of customs duties has been ruled out. The company insists the global market is big enough for everyone.
Zeekr is a new player in the electric vehicle market. Photo: Lex Ramsay
Speaking to Sky News at a major auto show on the outskirts of Beijing, Zeekr vice president Chen Yu explained that when foreign automakers began setting up electric vehicle factories in China, Local automakers watched and learned quickly.
“Certainly,” Mr. Chen said. “We learned more about performance, design, culture, everything.”
Now, companies like Zeekr and BYD, a giant in China’s electric vehicle manufacturing market, are taking on traditional automakers.
“I wouldn’t say that (Chinese electric vehicles) dominate the market. I would just say that they bring more diversity to the local customer base, that’s the nature of competition, as you know,” Mr. Chen.
However, the possibility of Europe imposing tariffs on Chinese electric vehicles worries the Zeekr executive: “Certainly, if tariffs increase, we are definitely worried about the potential challenge. »
Mr. Zhang, electric vehicle owner Photo: Lex Ramsay
At the auto show, car dealers and importers were clearly impressed by Chinese electric vehicles and warned traditional automakers that they were in trouble.
New Zealand car dealer Matthew Foot has been attending the annual show for five years and said: “It’s going to be very difficult to beat China. They get incredible resources from the government; from lithium mines to ships and everything in between.
“You obviously understand why Europe fears them and taxes them as well.”
This week, US Secretary of State Antony Blinken is in China. Trade tensions are on the agenda, alongside global geopolitical crises.
The United States already imposes 27.5% tariffs on Chinese cars. But in Europe the figure is just 10%, making companies like VW, Volvo and BMW increasingly nervous.
Last week in Beijing, German Chancellor Olaf Scholz said: “It is clear that we have to talk about issues of overcapacity and we have to talk about subsidy competition.”
BYD car at the Beijing Auto Show Photo: Lex Ramsay
Germany finds himself in a difficult situation. As Europe’s largest carmaker, it fears that if the EU imposes tariffs on Chinese cars, China could retaliate by restricting access to its vast market.
But the fact is that more than half of all new electric cars sold worldwide come from China, which can make them cheaper and faster than their competitors.
At the end of last year, Chinese electric vehicle giant BYD sold more electric cars than Tesla. Tesla was back on top last quarter, but competition is fierce.
The scale of production is staggering. BYD owns its mines, battery factories and eight ships.
Even a relatively small company like Zeekr is a model of efficiency, with 2,700 employees producing around 500 cars per day.
The focus on electric vehicles is part of Chinese President Xi Jinping’s plan to restructure the country’s debt-driven economy. He calls this “new forces of production.” Investment in infrastructure is over, new technologies are emerging.
In the industrial heartland of Anhui province, local authorities are also dismissing the looming threat of tariffs. Provincial official Pan Feng said: “Some countries, thinking of their short-term personal interests, have introduced certain regulations, but I think they are only temporary.
“China is a big country, with a big market, it has enormous power and confidence to thwart these conflicts.”
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Chinese buyers are also confident in their country’s electric cars, having bought more than seven million in the country last year.
The country also has more charging stations than anywhere else on the planet.
While charging his BYD electric car in Zhejiang Province, Mr. Zhang told us: “Cars made in China are good enough for us ordinary Chinese. If you are considering purchasing an electric vehicle, there is no need to opt for a Mercedes or German electric vehicle. “.
