has become China’s electric car manufacturers have a growing influence in this field globally, and they hope to secure a place among the heavyweights in the new industry and present a major new challenge to Tesla and the rest of the carmakers.
And the Tesla frenzy pushed the market assessments of the group of electric carmakers to dizzying heights.
Tesla’s value exceeded $ 830 billion in January and is now down to about $ 700 billion, but it is still three times the size of its closest competitor, Toyota, the Japanese car maker.
The value of Chinese competitors Nio, Xpeng and Li Auto rose rapidly to compete with larger and older manufacturers on the back of US stock market listings that gave access to retail investors, despite no annual profit.
Chinese electric car makers are eyeing the European electric car market, the largest in the world.
This increases pressure on older carmakers like Volkswagen, which are trying to rapidly expand electric vehicle production.
And luxury carmakers, including Jaguar Land Rover or BMW, could also lose out if Chinese brands acquire some of their wealthy customers.
Jaguar has pledged to switch to fully electric by 2025, and BMW said last month that half of its European sales would be electric by 2030.
The Chinese government has set aside an opportunity to control a new sector by providing massive subsidies to the electric car industry.
Li Auto, Nio, and Xpeng could grow into Tesla’s biggest competitors, and some Tesla competitors have similar technology and ambitious brands.
The luxury automaker aims to bring together elements from Tesla and Apple, the world’s most successful consumer technology company, said Nio’s executive vice president for Europe.
Nio aims to start selling cars in Europe later this year, and its factory can currently produce about 120,000 cars annually, which is far less than the 500,000 Tesla cars manufactured in 2020.
Nio averted bankruptcy in early 2020 when it was bailed out by the capital of Anhui Province, but it has raised more than $ 4.5 billion in recent months amid rising investor demand.
Tesla has an advantage in Europe when it opens a plant in Berlin early this summer, but automakers in China have the capital to start production in Europe as well.
And Chinese manufacturers may have a chance as European giants profit from fuel models as well as hybrids.
Chinese companies are also heavily involved in the electric car boom by manufacturing lithium-ion batteries.
Chinese company CATL, a supplier to Tesla, has a plant in Germany and said last year it had developed a battery capable of withstanding millions of miles of driving and recharging.
Battery maker BYD, which also makes electric cars, has been backed since 2008 by US investment billionaire Warren Buffett.
Rich competitors could spend large sums on technology, adding to the pressure on Tesla.
Nio’s big selling point is that its batteries can be swapped out in minutes by robots, which eliminates the risk of range anxiety for EV drivers.
Xpeng has invested heavily in self-driving software, so it can compete with Tesla through lucrative sales of subscription-based self-driving capabilities.
And the Xpeng P7 could target potential Tesla Model 3 and Model S buyers in Europe, rather than the richer customers who turn to Nio.
Xpeng launched its G3 in Norway, which last year became the first country in which electric car sales outperformed internal combustion engine cars thanks to government subsidies.