Chinese brands will likely outsell foreign brands in that country in 2023 for the first time in recent history. AlixPartners predicts these brands will rapidly increase their domestic market share, growing to 65 percent of the Chinese passenger vehicle market by 2030.
Chinese automakers also became the world’s largest exporters in the first quarter of 2023, beating out former leader Japan.
Companies that take lessons from what’s working for Chinese EV brands will win globally in the future, Wakefield said.
While traditional automakers tend to be engineering-driven and focused on getting vehicles right on the first try, Chinese EV brands have emerged fueled by new technology with a strong appetite for risk, prioritizing speed-to-market and cost over other factors.
Chinese brands also continue to benefit from the Chinese government, which has invested about five times as much as the U.S. in EV purchase incentives since 2016, according to AlixPartners.
While Chinese automakers will likely target the U.S. market last, due to regulatory and geopolitical challenges, their influence on Western markets is very real and coming soon, Dyer said.
“It’s three to five years away, and so there is time for the traditional automakers to do this kind of a pivot and to try to move toward this different type of business model,” Wakefield said.