The future of the global auto industry was on display at the world’s largest auto show in Beijing last week. Whether North American automakers will be a part of it is still TBD.
What happened: The Beijing Auto Show wrapped yesterday, with nearly 1,500 (mostly electric) vehicles showcased, many boasting futuristic features, powerful specs, and prices that seem almost too low to be believed.
Some noteworthy examples: the XPeng GX (a fully electric, three-row luxury SUV that looks like a Range Rover and has a range of 750 km), the BYD Denza Z (a sports car that can go 0 to 100 km/h in less than two seconds), and Geely’s Galaxy (a subcompact that retails in China for the equivalent of around $12,000).
Why it matters: The show was a stark illustration of the divergence between China’s automakers and their North American competitors. While the former grabs more of the world’s EV market share, the latter have been paring back their EV ambitions, taking enormous financial hits as they walk away from investments in the technology.
Ford took a US$19.5 billion writedown and abandoned several planned EV models last year. GM and Stellantis took charges of US$7.6 billion and US$26 billion, respectively, when they retreated from EVs.
Why it’s happening: China’s massive industrial base and dominance of key supply chains for EV components, particularly batteries, has given its automakers a major leg up on GM, Ford, and Stellantis.
Chinese carmakers tend to be far more vertically integrated than North American ones — BYD produces around 80% of its core parts in-house — which allow them to lower costs and test new features more quickly.
Zoom out: Globally, EV sales are still rising, up 17% in China last year, 33% in Europe, and 48% in the rest of the world. The North American car market, and its carmakers, are the outliers — and at risk of being left behind.
