Editor’s Note:
As China’s new-energy industries rise to global prominence, US officials have started a smear campaign based on false “overcapacity” claims. The rise of China’s new-energy industries is due to innovation, rather than subsidies, and is beneficial for the world, instead of posing threats to other countries. To illustrate this, the Global Times is publishing a multi-part series under the theme of “New Energy, New Opportunities.” This story focuses on how the Chinese new-energy vehicles (NEV) industry draws its competitiveness from competition, debunking the groundless narrative that Chinese NEV industry’s strengths came from government subsidies. This is the third installment of the series.
Workers assemble new-energy vehicles at a factory in Southwest China’s Chongqing Municipality on April 15, 2024. Photo: VCG
Chinese NEV company ZEEKR, an automotive brand under China’s Geely, got listed on the New York Stock Exchange on Friday, taking only 37 months from its launch to the IPO, setting a record as the fastest IPO in the history of Chinese NEV companies. On its first trading day, its stock price surged by over 34 percent.
Behind this remarkable IPO lies the latest evidence of the global market’s acknowledgment of the strength and prospects of Chinese NEVs, despite the intensified narrative of the so-called overcapacity by the US-led West targeting Chinese new-energy industry, particular Chinese NEVs.
China’s NEVs are securing a foothold in the global market due to their competitiveness, which includes cost-effectiveness and high quality. They are becoming very popular not only in China but also worldwide, including in developing countries spanning from Mexico to Hungary and Pakistan. These countries are urgently pursuing sustainable and high-quality development, which calls for green transformation and industrial upgrade.
Officials, scholars and business representatives from diverse countries said that it becomes evident how Chinese new-energy products have gained popularity worldwide, rebutting the ‘overcapacity’ rhetoric. They said the demand for Chinese-related products remains substantial.
Gaining in competitiveness, popularity
Chinese NEVs have become global bestsellers, greatly driving the global transition to green energy and industrial upgrading, especially for developing countries. Chinese NEVs are not only of good quality but also well priced, enabling developing countries to benefit from China’s green development.
In 2023, China exported 1.203 million units of NEVs, a 77.6 percent increase year-on-year. These exports reached over 180 countries and regions across Europe, Asia, Oceania, the Americas, and Africa. Moreover, Chinese NEVs accounted for over 60 percent of the global installed capacity of power batteries. Six Chinese power battery companies, including Contemporary Amperex Technology Co (CATL) and BYD, entered the top 10 globally in terms of installed power battery capacity.
Chinese NEV economy has maintained the momentum in 2024. From January to April, China’s exports of NEVs amounted to 421,000 units, a year-on-year increase of 20.8 percent, data from the China Association of Automobile Manufacturers showed.
Benefiting from the sustained expansion of overseas markets, China’s exports of photovoltaic silicon wafers, batteries, and modules also gained momentum.
There is huge opportunity for cooperation with China in the new-energy sector in Latin America, and the region is open for Chinese technology and products, Héctor Villagrán-Cepeda, former minister of transport and public works of Ecuador, told the Global Times in an exclusive interview on Sunday.
He spoke highly of China’s NEV sector for its cost-effectiveness, industrial transformation and contribution to carbon reduction in the Latin America region.
The continuous increase in global demand is attributed to the competitiveness of Chinese companies, which is inseparable from their mastery of key independent technologies and their capability of innovation across the entire NEV supply chain.
In a statement BYD sent to the Global Times, the company said that while continuously exporting high-quality products to overseas markets, BYD has built up core technological advantages in new energy such as batteries, motors, and electronic controls.
In recent years, BYD has expanded its passenger car exports to more than 50 countries and regions.
Despite their noteworthy achievements, the Chinese company has maintained an open attitude toward cooperation within its industry and supply chain, earning both recognition and respect.
In order to promote the stable development of the industry chain, BYD said that it is ready to share technological innovations in batteries, motors, electronic controls, and other areas with its peers upstream.
The efforts of the Chinese NEV companies are rewarding.
Recently, Azerbaijan initiated a bidding process to build an NEV factory. BYD won the bid and signed an agreement to establish a joint venture company and set up an electric bus production line in Azerbaijan, Ambassador of Azerbaijan to China Bunyad Huseynov told the Global Times in an interview in late April.
The Central Asian country is planning to gradually replace fuel-powered buses with electric ones in Baku, the capital of Azerbaijan, Huseynov said, indicating a possible area of cooperation.
China takes the lead in wind energy and solar, as well as electric vehicles, and is ready to share its achievements with other countries, which the Azerbaijani ambassador said “demonstrates China’s open and win-win cooperation attitude.”
‘Overcapacity’ narrative groundless
The popularity of Chinese new-energy products has garnered the attention of the US-led West, who are far lagging behind, and in order to catch up, they are playing their protectionist card again by alleging Chinese “overcapacity” with threatening actions to follow.
The Biden administration is set to announce new tariffs as high as 100 percent on Chinese electric vehicles and additional import taxes on other Chinese goods, including semiconductors, as early as this week, The New York Times reported on Friday, citing people familiar with the matter.
The US has called out a so-called overcapacity of Chinese new-energy products. However, in stark contrast with the US claim, the demand for NEVs is huge both at home and abroad.
Domestically, from January to April, the market share of NEVs reached 40 percent, indicating that the demand in China is far from saturated, Cui Dongshu, secretary-general of the China Passenger Car Association, told the Global Times on Monday.
Global demand for NEVs remains substantial, and significantly concentrated in just a few major markets. According to a report by the International Energy Agency (IEA), sales of electric cars neared 14 million worldwide in 2023, 95 percent of which were in China, Europe and the US.
Moreover, throughout Africa, Eurasia and the Middle East, electric cars are still rare, accounting for less than 1 percent of total car sales, IEA said.
In addition, according to data released by CleanTechnica, a US-based cleantech news site, the global sales of new-energy passenger vehicles totaled only 13.68 million units for the entire year of 2023. This figure is well below the IEA’s estimated target of 45 million units by 2030, which is crucial for meeting the United Nations’ sustainable development goals for 2030.
Graphic: Tang Tengfei/GT
In an interview with the Global Times, Peruvian Foreign Minister Javier González-Olaechea Franco said that “evidence show that, despite the rapid growth of Chinese electric vehicle exports, there remains a consistent global demand that far exceeds current production capacity. Reality and potential must drive our decisions.”
Chinese NEVs have become a popular choice for many developing countries because of their cost-effectiveness and environmental friendliness, the Peruvian foreign minister noted.
The US has accused China’s NEV industry of “dumping at low prices.” However, the facts and figures also suggested that the pricing of some China’s exported NEVs are competitive and still rising.
Data indicate that in 2019, the average export price of Chinese NEVs was $5,000 per unit, which increased to $22,000 in 2022, the People’s Daily reported on May 5 this year.
Victor Cadena, executive vice president of the Mexican Chamber of Commerce in China, told the Global Times on Monday that Chinese green-energy companies have already developed a strong presence in Mexico.
In addition to boosting green transformation, China’s NEV companies create jobs and promote industrial upgrade. Meanwhile, as Chinese companies announced their intentions to build manufacturing plants in Mexico, including BYD, prices of NEVs manufactured or assembled in Mexico are expected to be even more competitive than the imported ones, Cadena said.
Vaqar Ahmed, joint executive director at Sustainable Development Policy Institute in Pakistan, shared the similar views. He told the Global Times on Monday that in Pakistan, China’s new-energy technologies and products has been playing a key role in the country’s energy ecosystem, particularly in the transition toward cleaner and greener sources.
“All this contributes favorably to Pakistan’s aim to expand renewable energy to at least 30 percent of its electricity generation by 2030,” Ahmed said.
In response to the “overcapacity” claims, Ahmed said that it’s essential to consider the context of such claims.
“China remains a leader in electric vehicles and has made investments in electric vehicle infrastructure. While some may raise concerns about ‘too much capacity,’ it’s important to recognize that China’s domestic market is vast. The scale of production aligns with the country’s goals for reducing emissions and promoting clean transportation [not just locally but also in the whole region],” Ahmed noted.
As the global demand for NEV grows, Ahmed said that China’s capacity becomes “an asset rather than a liability,” which allows for economies of scale, cost-effectiveness, and technological advancements not just locally but also globally.
“Rather than viewing it as excess capacity, we should recognize it as an investment in global future sustainability,” Ahmed said.
In the face of the growing global complexities, with the US-led West calling for “decoupling” from China for protectionism, Erno Peto, president of the Hungarian-Chinese Chamber of Economy, emphasized to the Global Times that “the globalization process is now irreversible.”
Peto highlighted the important role that China has played in spearheading the battle against the adverse effects of climate change, calling for cooperation, not competition.
“In my view, the EU’s economies need the Chinese market as much as China needs the EU market, so the solution is not the so-called decoupling, but cooperation that takes into consideration of each other’s long-term interests,” Peto said.
