Chinese tech in electric cars spark motor industry buzz
Shanghai, China: Did you think Big Tech was taking over your life with smartphones? It may be coming for your car next, as Chinese companies lead a stampede into auto manufacturing in their search for more customers.
Cars are the next major prize in the fight for digital territory, industry insiders claim, and the deep pockets and data muscle of big Chinese tech firms would drive even faster growth in "smart-electric" vehicles — and probably hasten the arrival of autonomous cars.
Chinese mobile giants Huawei and Xiaomi, e-commerce pioneer Alibaba, and even DJI, the world's biggest drone designer, have all thrown their hats into the ring in recent weeks.
"This sort of competition is a good thing and will greatly accelerate innovation," William Li, founder, chairman, and CEO of Chinese electric vehicle (EV) producer NIO, told AFP in an interview just ahead of the Shanghai Auto Show.
The first major auto industry meeting of the year begins Wednesday, with the global industry looking to China – the world's largest and fastest electrifying auto market – to lead the way into a post-pandemic future.
WATCH: Electric cars and a chip shortage are getting attention at this year’s Shanghai Auto Show pic.twitter.com/q1e74Jtx2D— Reuters India (@ReutersIndia) April 20, 2021
Sales in China fell two percent last year to 25.1 million vehicles – nearly one-third of the global total – but are quickly recovering thanks to the growing popularity of electric vehicles.
Only a tiny fraction of Chinese sales until recently, EVs accounted for about nine percent in March, according to official figures.
The Chinese government expects new energy vehicles, which incorporate cutting-edge driving technology, to account for 25% of car sales by 2025, and recent announcements tend to support this prediction.
Xiaomi, which has quickly become one of the world's largest smartphone suppliers, expects to invest $10 billion in a smart EV subsidiary over the next decade, while Huawei will invest $1 billion this year.
AutoX, an Alibaba-linked autonomous driving unit, has partnered with Honda of Japan to expand testing on Chinese roads.
And, on Monday, tech behemoth Baidu announced that its Apollo self-driving navigation system would be installed in one million vehicles over the next three to five years.
The moves will draw new attention to Apple's top-secret effort to build a self-driving car.
Cars reflect a new opportunity for companies such as Huawei, which is rushing to build its own software ecosystem after US sanctions barred it from using Google's Android.
According to Chen Yusheng, chief technology officer of procurement analysis company Shanghai Autodatas Co., Huawei has recognized its existing "business limits."
"(Huawei) will enter a new track in the future, and with its own advantages, including combining software and hardware, will help promote lightning-fast development of smart cars and autonomous driving," Chen said.
Also, future rivals seem to be impressed.
"This is very reassuring. (Tech companies) see there is an opportunity in this industry, which means that this industry still has a very bright future," said Antoine Barthes, managing director of the automaking joint venture Dongfeng Nissan.
"And they are probably going to shape the industry."
Tesla sets the standard
Autonomous driving is still in its early stages, but China is generally expected to take the lead due to government support, modern infrastructure, and a head start in implementing the required 5G networks.
According to NIO's Li, the Shanghai auto show demonstrates how quickly things can change in China.
It was already dominated by conventional internal combustion engines only four years ago.
"But today, every booth in the hall has electric vehicles, new-energy vehicles. This is a huge change and the very big driving force has been a technological change," he said. Tesla was the most recent spark.
Elon Musk's company established its third factory in Shanghai in 2019 and is now selling one-fourth of its production in China.
Tesla, the world's best-selling EV brand, is energizing the Chinese market and setting the pace for a slew of competitors.
New entrants face numerous obstacles, including a lack of automaking know-how, which may require them to collaborate with existing manufacturers, providing the "brains" of cars while the latter builds the bodies, rather than following Tesla's self-contained blueprint.
Another impediment is a global semiconductor shortage, which has disproportionately impacted the car industry.
According to Li, the shortages caused NIO's production lines to be shut down for five days in early April. He anticipates more pressure in the coming months but sees it as a blip.
China's official EV goals are, in reality, too ambitious for Li.
"I'm much more optimistic," he said.
"I think that by 2030, more than 90 percent of new cars sold in China will be smart EVs."
The Shanghai Auto Show 2021: what to expect?
On Monday in China's financial hub, the Shanghai International Automotive Industry Exhibition kicked off a multiday event to showcase the best and brightest developments in the vehicle market worldwide.
The main trend of electric vehicles and smart-driving technology was backed by everyone from entrepreneurs to the most renowned carmakers – as well as new technology cabals, including Chinese telco giant Huawei Technologies Co, Bloomberg Quint reported.
Despite the burgeoning cases of the virus sprouting from across the world, the Shanghai Auto Show 2021 being held in all its physical glory is quite a spectacle in itself.
China has largely controlled the virus, meaning there's no bar for such public gatherings.
According to Bloomberg Quint present at the show's venue, among the many highlighting aspects of the opening main day, a public walk staged by the CEOs of two of the most valuable firms participating in the event took the limelight.
Nio Inc. CEO William Li and Xpeng Inc. CEO He Xiaopeng, two leading lights of China's EV onslaught, staged a very public walk around each other's stalls, attracting hundreds of onlookers who whipped out their phones to capture the moment.
At one point, Nio CEO Li knelt to inspect the undercarriage of Xpeng's P5 sedan drone, which will be available later this year.
Li also carefully listened to He's explanation of Xpeng's model flying car and inquired about some of the components used.
COVER IMAGE COURTESY OF BLOOMBERG QUINT.