A trade war is brewing between China and the West; What is at stake is who will dominate the global electric vehicle market.
Outside the port city of Ningbo, Chinese car company Zeekr is launching luxury products. electric vehicles and growing rapidly. The factory has only been in operation for three years, but this year it has more than doubled its production.
Chinese car company Zeekr is launching luxury electric vehicles at its factory near the port city of Ningbo. Photo: Lex Ramsay
Zeekr is a new player in the electric vehicle market, but it has unbridled ambitions to sell its high-end, high-tech cars abroad. It is a subsidiary of a state-backed company, Geely.
However, critics in the US and EU say the Chinese government’s financial backing and vast resources give companies like Zeekr an unfair advantage.
On a recent trip to Beijing, US Treasury Secretary Janet Yellen accused Porcelain of “overproduction” and “dumping” of its electric vehicles in foreign markets. The European Commission has launched an investigation into whether to impose punitive tariffs on Chinese industry.
But on Zeekr the threat of tariffs is being downplayed. The company insists that 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 massive auto show on the outskirts of Beijing, Zeekr vice president Chen Yu explained that when foreign car companies began setting up electric vehicle plants in China, local car companies watched and quickly learned. .
“Definitely,” Mr. Chen said. “We learned about performance, design, culture, everything.”
Now companies like Zeekr and BYD, which is a giant in the Chinese electric vehicle manufacturing market, are taking on traditional auto companies.
“I wouldn’t say that (Chinese electric vehicles) are dominating the market. I would just say that they bring more diversity to the local customer, that’s the nature of competition, as you know,” Chen said.
However, the possibility of Europe imposing tariffs on Chinese electric vehicles is a concern for the Zeekr executive: “Definitely, if the tariffs increase, we are certainly concerned about the potential challenge.”
Zeekr vice president Chen Yu. Photo: Lex Ramsay
At the auto show, car dealers and importers were clearly impressed with China’s electric vehicles and warned traditional automakers that they are 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 can obviously see why Europe fears them and also taxes them.”
This week the US Secretary of State, Antony Blinken, is in China. Trade tensions are on the agenda, along with global geopolitical crises.
The United States already imposes a 27.5% tariff on Chinese cars. But in Europe it is only 10% and that makes 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 that we have to talk about subsidy competition.”
Zeekr also produces luxury electric vehicles. Photo: Lex Ramsay.
Germany is in a difficult situation. As Europe’s largest automaker, 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 and it can make them cheaper and faster than its competitors.
Late 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 astonishing. BYD owns its mines, battery factories and eight ships.
Even a comparatively smaller company like Zeekr is a model of efficiency, with 2,700 workers producing around 500 cars a day.
The focus on electric vehicles is part of Chinese President Xi Jinping’s plan to reform the country’s debt-driven economy. He calls it “new forces of production.” Investment in infrastructure is ruled out, new technologies are in fashion.
In the industrial hub of Anhui province, local officials are also downplaying the looming threat of tariffs. Provincial official Pan Feng said: “Some countries, thinking about their own short-term interests, introduced some regulations, but I think they are only temporary.
“China is a large country, with a large market, it has enormous power and confidence to counteract these conflicts.”
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Chinese buyers also rely on their country’s electric cars, purchasing more than seven million of them in the country last year.
The country also has more charging stations than any other place on the planet.
While charging his BYD electric car in Zhejiang province, Mr. Chen told us: “Cars made in China are good enough for us ordinary Chinese. If you are thinking of buying an electric vehicle, there is no need opt for a Mercedes or a German electric vehicle. “.