Chinese EV makers' cost advantage puts pressure on legacy automakers
Chinese electric vehicle (EV) makers, such as BYD, are gaining a cost advantage with their dominance in the supply chain, which is making legacy automakers nervous. The supply chain control allows Chinese EV makers to keep costs low, putting pressure on traditional automakers to reduce costs as well. This shift has prompted European carmakers to prioritize cost reduction over other factors. Bill Ford Jr., executive chairman of Ford Motor, has warned about the rapid development of Chinese EV makers and their potential to compete globally. Despite some quality issues, Chinese EV makers are gaining recognition and market share outside of China, and their affordability is becoming an advantage in overseas markets.
Advantage in the Supply Chain
Chinese EV makers, such as BYD, have a cost advantage due to their dominance in the supply chain.
BYD owns the supply chain of its EV batteries, from raw materials to finished battery packs, and designs its own semiconductors.
This cost advantage makes legacy automakers nervous as Chinese cars reach consumers globally.
Reducing Costs Becomes Priority
Legacy automakers are prioritizing cost reduction as Chinese EVs gain market share outside of China.
Startups like Addionics and OneD Battery Sciences are helping automakers produce high-performance batteries at a lower cost.
Bill Ford Jr., executive chairman of Ford Motor, has warned that Chinese EV makers are a significant competitor globally.
Chinese EVs Disrupting Overseas Markets
Chinese EVs are gaining recognition and market share in overseas markets.
In Europe, affordable Chinese EVs, like BYD's Dolphin hatchback, are already available at prices below their competitors.
Automakers are now turning to affordable vehicles to compete with Chinese manufacturers.