First off, I refuse to drive one of those shitboxes and support those bastards running the Chinese government.
Unless it's priced competitively and has good features. Then I'll buy one but I won't feel good about it.
China overtakes Japan in auto exports with boost from EVs
Japan loses crown for 1st time in seven years amid BYD's rise
Cars for export wait to be loaded onto a cargo vessel at a port in Lianyungang, China. © Reuters
AZUSA KAWAKAMI, SHIZUKA TANABE and SHUNSUKE TABETA, NIKKEI ASIA
February 1, 2024
TOKYO/GUANGZHOU/BEIJING -- China became the world's largest exporter of automobiles last year for the first time, knocking Japan off its perch thanks to strong overseas sales of electric vehicles.
Japan exported 4.42 million vehicles in 2023, up 16% from the previous year, the Japan Automobile Manufacturers Association said Wednesday. The volume fell short of the 4.91 million vehicles China exported last year, according to the China Association of Automobile Manufacturers, the total soaring 58% on the year.
The figures represent the first time in seven years Japan has lost its crown, comparable data shows. Japan was last edged out in 2016 by Germany.
A large driver of China's auto exports was Russia, a market that Japanese and Western automakers withdrew from in response to the war in Ukraine.
Another significant driver was an 80% surge in China's exports of new energy vehicles, a category that includes EVs.
Symbolic of this rise is BYD, which outstripped Tesla in global EV sales for the first time ever during the fourth quarter.
In 2022, BYD declared a capacity to manufacture 1.25 million passenger vehicles, but it actually produced over 1.8 million units that year. And in 2023, the company fielded a capacity for around 3.5 million vehicles, according to local media, placing it above Tesla's 2.35-million-unit capacity for the same year.
BYD has been rapidly expanding Chinese plants with the cooperation of local governments. The first phase of a plant project in Anhui province's Hefei took just 10 months between the start of construction and the launch of operations, according to local media.
BYD is expected to expand capacity at facilities in the cities of Shenzhen in Guangdong province and Zhengzhou in Henan province. HuaAn Securities estimates BYD's production capacity will grow above 4.5 million units this year.
BYD's overseas sales last year topped 240,000 vehicles. Disclosures show that the total for the second half of 2022 was roughly 50,000 units.
BYD's offshore success has been credited to more affordable prices compared to EVs from Tesla and Volkswagen. In Europe, BYD's EVs are priced 20% to 40% less than the average.
Environmentally conscious young people have also boosted BYD's sales volumes in Europe, while the company has been capturing demand in Thailand as well.
BYD has grown overseas sales of EVs by offering more affordable prices than Western rivals.
BYD, which started out as a battery company, is able to make EV components in-house, including semiconductors and seats. This structure keeps supply costs down, while the large sales volumes generate benefits associated with the economy of scale.
In the third quarter last year, BYD attained a net profit margin of 6.4%, approaching Tesla's 7.9%.
Government support has played a large part in the expansion of China's auto production capacity.
In 2009, the government adopted a plan to put new energy vehicles into the mainstream, rolling out sales subsidies for such vehicles from 2010 to 2022. Those subsidies totaled roughly 300 billion yuan (around $42 billion), according to Chinese media.
Automakers themselves were also pushed to shift to EVs. From 2019, the government generally did not approve new assembly plants unless they made electrics. In 2020, officials fully implemented a quota system for the manufacture and sales of new energy vehicles.
"The thinking and speed that Chinese EV makers apply for investments approaches that of information technology firms," said Koichi Iguchi, partner at the management consultancy KPMG FAS. "The government provided powerful backup in furthering affordability, and [China] took over the global EV market in just a few years."
Foreign brands have also been integral to China's export bonanza. Even with BYD's successes, Tesla was the top exporter of new energy vehicles from China last year at 340,000 units, accounting for nearly 30% of all exports.
To realize the Chinese government's goal of expanding EV exports, authorities are believed to have asked Tesla to aim to export half the vehicles made at its Gigafactory Shanghai at the time the facility was built.
Beijing is looking to leverage the global shift to electric vehicles to position China as an industry powerhouse. The country's lead in auto exports is seen as only one step along this path, with automakers shifting focus to overseas production going forward.
One government official expects China to sell a total of 12 million vehicles overseas in 2030 -- 6 million exported from China, and 6 million manufactured abroad.
That said, China's efforts to grow its exports are intended partly to alleviate a domestic capacity glut. Chinese auto factories used 54% of their total capacity in 2022, down from 67% in 2017, according to Chinese media.
By one estimate, the country will be able to produce more than 36 million new energy vehicles in 2025. About 14 million to 16 million are expected to be sold domestically that year, which would leave a surplus of more than 20 million vehicles.
Cooling domestic demand could make the problem even worse in the future.
Meanwhile, countries such as France and Italy are considering moves to restrict subsidies for Asian-made EVs amid concern about an influx of cheap imports from China.
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