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In the race for electric vehicles, Chinese consumers are in the driver’s seat

Matt Levin Jul 3, 2023
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"Tesla is still crushing it in China," says Tu Le, managing director at Sino Auto Insights. But Chinese automotive giant BYD sold more cars than Tesla in the second quarter. Xiaolu Chu/Getty Images

In the race for electric vehicles, Chinese consumers are in the driver’s seat

Matt Levin Jul 3, 2023
Heard on:
"Tesla is still crushing it in China," says Tu Le, managing director at Sino Auto Insights. But Chinese automotive giant BYD sold more cars than Tesla in the second quarter. Xiaolu Chu/Getty Images
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It feels like we’re finally nearing an inflection point in the electrification of the global auto industry, with the Chinese consumer in the driver’s sea.

Sunday, Chinese automotive giant BYD reported record sales of 700,000 electric and plug-in hybrid vehicles for the second quarter. Monday, Tesla reported its own quarterly record of 400,000 deliveries, partly boosted by discounts the Austin-based company has had to offer to compete in the Chinese market.

Where does this leave legacy automakers like GM and Ford, that used to be pretty popular in China?

Taylor Ogan has lived in Shenzen, China, for about six months now. When he hopped in a Chinese ride-hailing car the other day, he thought something was wrong with it.

“I was like, ‘What is the horrible noise?’ And I didn’t really realize that I hadn’t been in an internal-combustion engine vehicle for six months until I heard the engine,” said Ogan, who is CEO of Snow Bull Capital, a hedge fund that invests in electric vehicle automakers.

Ogan said Chinese ride-hailing fleets are mostly all EVs. About 1 in 3 new cars sold in China is electric.

But instead of Ford F-150 Lightnings or Chevy Volts on Chinese roads, you’ll see way more BYD Songs.

“The average Chinese EV driver three to four years ago would never have considered ever in their lifetime driving a Chinese-made car. And yet they are,” Ogan said.

Chinese drivers used to be reliable customers for Detroit automakers. 

“Now their share and their sales have eroded significantly,” said Tu Le, managing director at Sino Auto Insights.

That’s mostly because Chinese companies have produced much cheaper EV sedans. The BYD Seagull is about $10,000.

One expensive American brand is doing pretty well. “Tesla is still crushing it in China,” Le said.

Chinese consumers are choosing cutting-edge tech over legacy carmakers, and Seth Weintraub at the EV website Electrek said it’s a matter of time before the GMs and Fords of the world have a Chinese competitor to worry about at home.

“We can see it coming. They’re making very compelling vehicles, high-quality vehicles,” he said.

Weintraub says even with a 27% tariff, Chinese EV’s could be a cheaper alternative to American models.

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