As Chinese EVs expand overseas, the wind and waves are increasing

For a time, China's automobile export volume surpassed Japan's to become the world's No. 1, attracting widespread attention from society. But Sun Xiaohong reminded us that the ranking according to the export value could better reflect the actual situation of China's auto exports. "The actual position of China's auto exports should be ranked third or fourth."

On the other hand, although the prospect of going overseas is very good, there are many thorns along the way. Starting from 2022, external risks such as international geopolitical conflicts are rising rapidly, including trade policies, product access, green barriers, and data compliance which will pose considerable challenges to Chinese auto companies seeking global development.

It is worth mentioning that China will replace Turkey as the largest source of EU car imports in 2022. However, rumors recently exist that Europe may consider launching an anti-dumping investigation on Chinese electric vehicles to protect its auto industry.

Faced with many challenges, can Chinese car companies still make great strides in going overseas? From "going overseas" to "globalization of the value chain," where have Chinese car companies come?

■The EU initiated anti-dumping and anti-subsidy investigations.

According to statistics from the China Association of Automobile Manufacturers, China's auto exports will reach 3.111 million units in 2022, a year-on-year increase of 54.4%. Among them, the export volume of new energy vehicles will be 679,000 units, accounting for about 22% of the total. In the first five months of 2023, the export volume of automobiles will be 1.758 million, a year-on-year increase of 81.5%.

In the past two years, Chinese new energy car companies have regarded the European market as the largest export region, mainly because of Europe's policy support for new energy vehicles, the strong performance of the new energy vehicle market in Europe, and the improvement of China's new energy vehicle industry chain. Factors such as obvious scale advantages have jointly promoted more and more new energy vehicle companies "go overseas" to Europe.



However, the strong overseas expansion of new Chinese energy car companies has also made the EU fearful. Recently, French media reported that the European Union plans to launch anti-dumping and countervailing investigations on Chinese new energy vehicles.

According to Eurostat data, Chinese cars will only account for 2.9% of the EU car market in 2022" "This proportion is still very small, and the year's forecast will account for up to 3.4%. I don't understand why the EU worries about China's new energy vehicle". Sun Xiaohong believes the development of new energy vehicles in the EU, and China is mainly due to the dislocation of development stages. Yes, because China's new energy vehicles developed relatively early, China's new energy vehicle policies and measures began to decline; it was when the subsidies for new energy vehicles in the EU and the United States increased. Therefore, at this stage, regardless of models or quality, the EU believes that the competitiveness of China's new energy vehicles is prominent, so this voice appears within the EU.

This brings uncertainty to Chinese car companies going overseas to Europe. According to the president of a well-known domestic car company, "Judging from the results of the anti-dumping investigation initiated by the EU, nearly 90% of all Chinese car companies are subject to restrictions, including SAIC, Chery, Weilai, etc., more or less increased The tariff will affect the going out of the car companies. The anti-dumping investigation is not a matter for one company. The Automobile Industry Association should organize Chinese car companies to deal with this matter. Otherwise, the 50% tariff is unacceptable for car companies. Bear the pain".



In addition, from the perspective of dumping, Sun Xiaohong believes that there is no dumping problem in the current European prices of Chinese cars, and the overall price is very reasonable. Therefore, I hope that China and the EU can properly handle this issue based on the principle of mutual benefit and mutual trust. Europe has introduced many rules, mainly focusing on green and carbon reduction. In addition to the anti-dumping and anti-dumping investigation mentioned above, the EU also passed the "EU Battery and Waste Battery Regulations" in March 2022, introducing the concept of a battery passport. If you can't get a battery passport, you may not be able to enter the European market.

In addition to the European Union, the United States introduced the "Inflation Reduction A" in 2022 to subsidize eligible consumers and producers of new energy vehicles from 2023 to 2033. The tax credit for new electric vehicles is capped at $7,500 per vehicle. However, the bill has strict requirements on qualified vehicles, including battery material requirements, vehicle assembly requirements, vehicle price requirements, and income requirements for car buyers. Li Ke, executive vice president of BYD, recently said that this will increase the cost of electric vehicles for American consumers and made it very clear that" "the US market is not within our current consideration."

■Domestic hymn?Still in its infancy

Although Chinese car companies have made breakthroughs in the global market in recent years, calm down and think about it, the road ahead will be long and difficult.

Sun Xiaohong pointed out the positioning problem of car companies going global. Now there is a saying that in 2022 China's auto exports surpassed Germany to rank second, and from January to May 2023, it surpassed Japan to rank first. However, Sun Xiaohong believes that based on the global export data by country in 2022China's exports will rank first. In fourth place, behind Germany, Japan, and the United States. The ranking is based on the amount, which reflects the actual ranking of China's auto exports."



This means that the average export price of Chinese automobiles is lower than that of traditional automobile powerhouses such as Japan and Germany" "Compared with Toyota's production and sales distributionChina, 's's auto industry still has a long way to go to go globally." Sun Xiaohong gave an example's global sales in 2022 will be 10.55 million vehicles, of which 2.04 million will be sold in Japan, and 8.51 million will be sold overseas. ; During the same period, ToyotMotor's global production was 10.72 million vehicles, domestic production was only 3.78 million vehicles, and overseas production reached 6.94 million vehicles, with the focus of production concentrated overseas.

Another senior executive of a Chinese car company with an overseas presence said: "At present, there are a lot of hymns in the country, but Chinese cars are not doing so well, and exports are not so good. First, there are more shipments this year, but how many are sold?? Many of them are floating on the water or stored in dealership stores. How much is traded? It will not be more than Japan; In the past, we were still in the state of others many years ago, and this is not worth showing".

In his view, going overseas for Chinese automobiles is not just about going out with complete vehicles but becoming a local corporate citizen. More market and talent energy have become global, making locals inseparable from China.

Wei Wenqing, deputy secretary-general of the China Association of Automobile Manufacturers, also expressed similar views: "Export is an ecological export, first of all, it involves the removal of tariff barriers and non-tariff barriers such as technology. When China joined the WTO, it joined many bilateral and multilateral agreements. All countries attach great importance to automobiles. Automobiles are difficult to negotiate. In order not to Affect these agreements, many of them have adopted exceptions, and there are still many obstacles to be dealt with; second, ecological exports. For example, the biggest problem encountered in recent years is the transportation of vehicles. The downstream support has not gone out yet. Only after the ecology has taken root in this country can the car truly go out; third, there is insufficient information and coordination, Chinese companies lack local market information and consumer insight, and there are many demands in this region".

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"The whole going overseas can be divided into five stages: the first stage, opportunity-based trade; the second stage, brand-based trade; the third stage, simple KD manufacturing; the fourth stage, comprehensive localized manufacturing; the fifth stage, even the home country Without comprehensive internationalization, the entire value chain is distributed around the world according to the market, rather than concentrated in one place." Wei Wenqing suggested that China has passed the initial stage and is now in the second and third stages, but different companies are not the same, and it is not a step-by-step process, and some people skip directly to the third and fourth steps. The automobile is an intensive industry, capital-intensive, technology-intensive, and labor-intensive. No group can spread pepper noodles to fight globally, and it needs to focus on key areas.
If the Charging cannot be guaranteed, the car will encounter problems overseas.

According to forecasts, the export proportion of new energy vehicles is expected to increase to 35% in 2023. However, Fan Bin, Director of the Charging Technology Department of China Automotive Research Institute New Energy Vehicle Inspection Center (Tianjin) Co., Ltd., pointed out at the 2023 China Auto Forum that there are differences between overseas charging piles and domestic charging piles in terms of product certification and interface standards Problem.



According to the statistics of the Charging Alliance, as of the end of May 2023, the number of charging infrastructure in my country has reached 6.356 million units, ranking first in the world. As Chinese brand new energy vehicles go abroad, the country's charging facilities have also entered the international market, pushing Chinese solutions to the world's major charging markets."
"A series of problems made it difficult for us to go to sea with charging." Cao Guangyu, executive deputy general manager of Shanghai Zhida Technology Development Co., Ltd., said: "Charging and the car are tied to a boat, or a grasshopper on a rope if the charging can't be guaranteed out at sea, the car will also encounter problems out at sea."

The backward construction of overseas charging piles will also hinder the progress of new energy vehicles overseas. It is reported that Southeast Asia, Europe, and Latin America are the three main regions for China's auto exports, all of which have relatively low vehicle piles and unreasonable charging layouts to varying degrees.

Although the overseas charging pile market is vast, and domestic manufacturers are also actively exploring overseas markets, Fan Bin pointed out that charging piles still face several difficulties when going overseas:

1. The common charging protocol of European and American standards differs from that in China. It is a PLC communication protocol. The standard is completely different from that in China. The understanding and mastery of technical standards by domestic personnel is relatively low.

2. In the international market, there are also many problems of mismatching and incompatibility of vehicle piles, resulting in poor charging experience, and may even affect product brand building.

3. Although about 150,000 new energy vehicles will be exported in 2022, the research and development experience is still insufficient, and an in-depth analysis of standards and technologies is required.

4. is the issue of export certification. Domestic technicians are not particularly clear about foreign certification rules, which will also affect the Export of products.

To sum up, the charging problem encountered in the Export of new energy vehicles has hindered the promotion of the international development strategy of related enterprises "going out, going in, and going up."



In this regard, Li Shaohua, deputy secretary-general of the China Association of Automobile Manufacturers, made suggestions: First, do a good job in basic skills, strengthen the research and development of charging pile technology, improve product quality, and build a Chinese brand in the field of charging piles; second, speed up foreign localization certification. In-depth research and analysis of local charging pile certification regulations and standards, but also strengthen cooperation with relevant testing and certification institutions at home and abroad to break through the overseas certification problems of charging piles; the third is to strengthen international cooperation and cooperate with relevant enterprises in overseas countries in various ways. Breakthrough regional policy barriers rapidly expand with the help of customers' local superior resources and gradually achieve large-scale growth in overseas markets. The fourth is to explore the application of new technologies and models in different scenarios, combine the local characteristics of different countries, and deliver China's successful experiences and achievements to the local area.

On the way of Chinese auto companies "going overseas," there are scenery and storms, but only by firmly going outstanding on the world stage and participating in global competition can the Chinese auto industry forge world-class competitiveness, which is also the dream of all automakers.