The car industries of Europe and the US have always been the global frontrunners for over a century. After WW2, things started to change: Japan rose from the ashes of war, positioning itself as a global car industry power through exceptional product quality and factory efficiency since the 60s. As for Korea, the nation began its economic development and planning of its car industry after the Korean War. Afterward, Korea followed Japanese carmakers’ business models, first entering markets with budget models and venturing into premium car segment and new car techs in recent years, thus also becoming a force to be reckoned with. At the same time, carmakers from Europe and the US were also advancing, yet the burden of their long history somewhat limited their creativity and progress. It wasn’t until the rise of Tesla in the last decade that European and US carmakers realized the imminent reality: the heyday of low-risk, high-return ICE cars is coming to an end. Besides, the Paris Agreement adopted in 2015 has set its timetable for carbon neutrality, marking a new age for the car industry, the dawn of EVs and new energy techs, and a historic shuffle of the global market. Ever-changing environments like this undoubtedly reveal more potential opportunities for non-traditional carmakers, such as tech companies and ride-sharing businesses. To view this competition from a larger perspective between nations, countries aside from current car superpowers could explore brand-new openings in the future car industry and even come out on top, like the new Asian car power led by Chinese self-owned brands, for example. In the massive Chinese market, basic manufacturing training from and design plagiarism of joint ventures were commonplace a few decades after the Chinese economic reform. Until recently, global automakers were rushing to cooperate with Chinese car brands and tech companies to develop key technologies, marking a 180-degree change in the industry. The future for car markets is an untreated territory, and European and US carmakers will face the brand-new challenge of Asia, aside from Japan and Korea.
Take the US market as an example: American brands are facing Asian powers stationing or planning to station in their home base:
- China: BYD electric battery bus factory and Geely Volvo Cars’ factory that has been producing ICE cars, EVs, and BEVs since 2018 first came to mind. Additionally, there are multiple Chinese car factories in Latin America, although their intentions of selling to the US market are currently unclear.
- Taiwan: the Foxconn-acquired Lordstown factory, an OEM, will manufacture EVs branded Lordstown, Fisker, and other brands, including Monarch electric tractors. Recently Foxconn also announced they would set up a passenger car R&D center in Detroit, the Motown of US.
- Vietnam: self-owned brand VinFast will establish an EV manufacturing plant in North Carolina, aiming to start production in 2024 with annual production capacity of 150k units.
Even the European market that was hard for Japanese and Korean brands to expand has experienced the Asian power:
- China: SAIC’s MG and Maxus are exporting new energy models to Europe, aiming a 120k annual sales; NIO is setting up an R&D center for deploying battery swapping stations in Hungary, starting production this September to provide swapping service to European car owners. With NIO’s launch in Norway last year, the company is expanding to Germany, the Netherlands, Sweden, and many more regions. BYD and XPeng are also entering Norway market. All the advancements above happened within only these two years. Moreover, Great Wall Motor established its European HQ in Frankfurt, Germany last year, commencing full-scale planning for the European market. Geely and Chery, on the other hand, had a head start: taking advantage of the 2,000 staff cut from the Opel R&D center due to GM’s selling of Opel to PSA. The companies smoothly established their European HQ. CATL, the world’s largest battery manufacturer, is launching battery production in Germany this year and has just announced that it’s building a 100GWh battery plant in Hungary.
- Taiwan: Foxconn announced on HHTD21 last October that it would set up EV factories respectively in Europe, India, and South America, though the details remained undisclosed. However, if the direct purchase of equipment and labor like Lordstown remains unlikely, the difficulty of building factories and teams in Europe from the ground up for a Taiwanese company that has never set foot in the car industry is sky-high and unfitting for Foxconn’s efficiency-first business motto. Maybe this decision of setting up local factories stemmed from the tech joint venture with Stellantis in smart cockpit.
- Vietnam: Aside from the US, VinFast will set up factories in Germany, planning to mass produce EVs for European market from 2025. What’s more, the ambitious company has also been exporting vehicles to the European market.
In conclusion, to challenge the US and European car markets, automakers must lay their foundations with new energy models, equip cutting-edge human-machine interfaces and infotainment systems, and differentiate themselves from local products by achieving higher price-performance ratios. If Chinese, Vietnamese, and Taiwanese carmakers could enter the European car market, which was notoriously difficult for their Japanese and Korean counterparts, then their determination and resolution in the EV age are certainly worth keeping an eye on.