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Small-Medium Cities to Be Next Growth Potential for Chinese EV Market| Insights


Chongqing - “China has now surpassed Japan to become the world’s largest exporter of automobiles,” said Shi Yuntao, General Manager of the Automotive Industry at Thoughtworks, during an exclusive interview with iChongqing and Bridging News at the 2023 Smart China Expo (SCE 2023) on September 4. 

Shi added, “Among them, the growth rate of new energy vehicles (NEVs) in exports has exceeded that of traditional fuel vehicles.” Data showed that automobile exports reached 2.533 million units from January to July, marking a remarkable year-on-year increase of 67.9%, reaching a historical high. 

During this period, the export of NEVs grew by over 1.5 times, with China’s NEVs already establishing a strong presence in overseas markets across Europe, Southeast Asia, Oceania, and South America, and even securing a leading market share in some countries.

“In the future, we anticipate a growing trend of consumers choosing electric vehicles (EV), with data from McKinsey research indicating that 68% of consumers are considering electric vehicles for their next car,” Shi added.

Thoughtworks, a leading global technology consultancy at the forefront of digital innovation, integrates strategy, design, and software engineering to enable enterprises and technology disruptors to thrive. 

Shi Yuntao, General Manager of Automotive Industry at Thoughtworks. (Graphics/Chen Yingzhu)

Localization of production and supply chains overseas

However, Shi acknowledged that there have been some challenges with the rapid growth of China’s EV production and global market share.

For example, the latest European Battery Act has significantly impacted all Chinese battery exports and power battery companies looking to establish European factories. It stipulates that starting from 2027, power battery exports to Europe must be accompanied by a compliant “battery passport” containing information such as the battery manufacturer, material composition, carbon footprint, supply chain details, and more.

This will possibly impact China’s battery dominance and influence a broad range of competitive Chinese EVs exported to the U.S. and European markets.

“Despite the continuous expansion of overseas markets, we cannot overlook the associated challenges,” Shi emphasized. “Localization of production and supply chains takes precedence for continuous development.”

He further explained that establishing local overseas teams and hiring high-caliber local institutions and personnel effectively increase global market share, requiring enterprises to adopt an international perspective and a forward-looking mindset, cultivating international markets with a development-oriented approach.

Intelligent cabins reflect human-machine natural interaction

Shi highlighted Chongqing’s role in NEV transformation. He witnessed numerous local automotive companies actively researching and developing intelligent cabins.

Take the example of Changan Automobile, which recently unveiled the Changan Qiyuan A07 Emotional Island Intelligent Cabin. This innovative cabin features a new user interface (UI) and voice interaction, enhancing the intelligence of vehicles.

Additionally, ThunderSoft provides the overall intelligent cabin software solution, automobile service, and advanced intelligent driving experience for drivers and passengers. More than 100 companies are adopting ThunderSoft’s intelligent cabin products and solutions.

“As we examine industry trends, the natural interaction between human senses and machines emerges as the ultimate goal for intelligent cabins, with ‘multimodal fusion’ being a crucial aspect,” Shi said. “We are currently focusing on five key areas to achieve this goal.”

The five key areas include Human-Machine Interaction Technology, Intelligent Driving Assistance Systems, Internet Services and Data Security, Artificial Intelligence and Big Data Analysis, and In-Cabin Comfort.

Shi said that NEVs are increasingly technologically advanced, offering convenient operation and purchase options while aligning with the future low-carbon and environmental sustainability concepts.

He thinks the domestic market for Chinese NEVs is expected to continue growing due to market expansion both within China and internationally, maintaining a consistent pace of growth for a considerable period.


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