China’s Love of Local EVs Is Bad News for Foreign Carmakers
Buyers in the world’s biggest electric vehicle market are overwhelmingly shifting toward homegrown brands.
For the past four decades, Western automakers have enjoyed a welcome lift from Chinese car buyers, who were drawn to the foreign brands’ quality and cachet. That allowed sales in the Asian nation to become a sizable piece of European and US automakers’ revenue and growth plans. But as China’s car buyers quickly shift away from traditional gasoline- and diesel-powered cars and toward electric vehicles, that could be changing. Homegrown auto manufacturers now command the lion’s share of new-energy vehicle (NEV) sales, leaving global giants such as Volkswagen AG and BMW AG at risk of being left behind in the world’s biggest EV market.
Domestic automakers accounted for almost 80% of EV sales through the first seven months of 2022, according to data compiled by the China Passenger Car Association (PCA). While long-established BYD Co., backed by Warren Buffett’s Berkshire Hathaway Inc., is the runaway leader, newer entrants such as Xpeng Inc. and Hozon New Energy Automobile Co.—barely known outside the country—now outsell VW’s two Chinese joint ventures.