Karlheinz Zuerl, CEO der German Technology & Engineering Corporation (GTEC) /
Foto: GTEC
“China is not nearly as strong in electromobility as is often portrayed in the West,” says Asia expert Karlheinz Zuerl, CEO of German Technology & Engineering Corporation (GTEC). He points out that only BYD and Tesla achieved net profits on the Chinese market in 2023, while “the other car manufacturers in China are fighting for their economic survival”. Although Tesla CEO Elon Musk recently publicly highlighted the performance of Chinese competitors BYD, Nio, XPeng and Polestar, all four companies are 14 to 74 percentage points behind Tesla in terms of operating profit margin, analyzes Karlheinz Zuerl. In terms of cash flow, the gap to Tesla is between 16 and 20 billion US dollars.
The GTEC CEO clarifies the situation: “Over five years ago, there were once more than 480 registered companies in China that had set out to produce electric vehicles. Over 400 of them have long since disappeared, most of them without ever even building a prototype. In the last four years alone, more than 75 Chinese car brands have had to give up. It is foreseeable that a further 60 to 70 percent of the 40 or so brands still in existence today are on the verge of disappearing.” He cites the “catastrophic situation” of China Evergrande NEV as an example of the economic decline of the Chinese e-car industry. The company had set a target of producing one million e-vehicles per year by 2025. In 2023, however, not even 2,000 Hengchi 5 cars, China Evergrande NEV’s only e-car, had been delivered.
Most Chinese manufacturers of “new energy vehicles”, as e-cars are called in China, have “worryingly thin capital resources”, says Karlheinz Zuerl. Up-and-coming second and third-tier car manufacturers such as Aiways, Leapmotor, Weltmeister, Skywell, Sitech and Future Mobility are struggling with “very serious difficulties”.
In addition to a glaring lack of capital, many of the suppliers are struggling with quality problems and difficulties in adapting to increasing consumer demands in terms of comfort. “Many Chinese manufacturers are finding it extremely difficult to switch from small prototype-quality vehicles to the high-quality e-cars demanded by customers,” explains Karlheinz Zuerl. Many companies such as Hozon or Future Mobility can therefore only sell a few hundred vehicles per year, far too few to remain on the market in the long term.
Asia expert Karlheinz Zuerl concludes: “The German automotive industry has better opportunities on the global market for e-mobility than it is often given credit for. German manufacturers should see Tesla in particular as their main competitor due to its innovative strength, rather than the numerous suppliers from China, many of which will disappear from the market again.” According to the GTEC CEO, the innovative strength of Chinese industry lags far behind that of the USA, and this also applies to the automotive sector. Even individual progressive concepts such as Nio’s swappable battery (swapping batteries instead of charging) do nothing to change this. “The Chinese market offers a whole cornucopia of enormous opportunities for the German economy,” explains Karlheinz Zuerl, “but there is still little sign of Chinese superiority in the most important fields of modern technology. The German automotive industry can certainly learn more from Tesla than from Chinese cars when it comes to the future of its industry.”
You can read this and other articles on the subject of electromobility & autonomous driving in the current issue of eMove360° magazine. Download the free PDF or order the print edition in the shop.
