China’s automobile industry has entered an era of infinite competition. In the 2020s, 40 years after Japan’s Sony became the world’s No. 1 Walkman in the 1980s, China’s BYD is now the No. 1 electric vehicle (or equivalent of Tesla).

Electric vehicles and batteries have become the first industries in China to top the capital-intensive high value-added industry, and China is likely to be much different from before in the future.

BYD’s Pro Plus DM-i

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“What’s a catharsis?” …Unlimited competition for six-day-a-week Chinese electric cars [China Difference]
[Editor’s note] I look at China, which is different, with an uncomfortable and unfair eye.

Due to her fiancee’s repeated urging, she quit working at an electric car store in the mall. “The number of customers in the mall is more than 10 times that of an ordinary car dealership. Moreover, the demands of the company are high, which makes the company intensive. My colleagues and I joke that it is a “consumable item,” but we rarely leave work before 10 p.m.,” she said.

Zhang He, who manages car sales in areas near Shanghai, China, often works until 11 p.m. these days. In severe cases, the meeting begins at 11:30 p.m. and ends after 1 a.m., but the meeting continues at 8:30 the next day. If you have any materials to present for the morning meeting, you only have three to four hours to wake up.

Nejian (a new term referring to unlimited competition), which began to be popular in China a few years ago, has become the epitome of the Chinese automobile industry. With the transformation of electricity, the Chinese automobile industry enters an infinite competition, and the entire automobile company is engaged in a bloody competition.

The Chinese automobile industry is also undergoing significant changes. As for sales channels, 4S stores, the official agency that provides sales and after-sales service, have become the trend. The first floor of shopping malls in large cities was packed with electric car stores.

China’s new car development cycle has been shortened to 20 months, less than half of global automakers (48 months) by new electric carmakers. As price competition overheats, the Chinese automobile industry as a whole is under extreme survival pressure, with electric carmakers demanding parts suppliers cut delivery prices by 10 to 20 percent a year.

Instead, the result of Neizuan is lower electric vehicle prices than new and internal combustion vehicles, which are pouring every day. As the Chinese automobile industry is engaged in an infinite competition called ‘Neizuan’, China’s local brand share is soaring, and the position of global automakers such as Germany and Japan is shrinking. Let’s take a look at China’s electric vehicle industry.

1. BYD, the equivalent of Tesla

Shares surged 10% on the 2nd (local time) as Tesla said it delivered 443,956 units in the second quarter, exceeding market expectations. The figure is down 4.8% from the same period last year, but up 14.8% from the first quarter (386,810 units). Delivery in the first half of the year was 837,766 units, down 6.6% from the previous year.

In the first half of this year, BYD sold 1,612,983 units, up 28.5 percent from a year earlier. Of these, 726,153 pure electric vehicles (BEVs) and 880,992 plug-in hybrid vehicles (PHEVs), which are inferior to Tesla’s when the BEVs are counted. Tesla only produces BEVs.

BYD has absolute influence in China. This is a snapshot of sales data from January to May this year. During the period, BYD sold 1.267 million units, ranking first with a 34.8 percent market share. The sales also increased 27.1 percent year-on-year. BYD sold more than 340,000 units in June, while it sold more than 300,000 units every month.

Tesla ranked second with a market share of 9.8% with 356,000 units, but sales decreased by 7.1% compared to last year. It reveals that Tesla’s position in China, where fierce competition is ongoing, is not the same as before.

When Tesla CEO Elon Musk was asked about BYD in a Bloomberg interview in 2011, he asked, “Have you ever seen BYD’s car?” and answered, “I don’t think BYD electric cars are attractive,” which makes me feel a different story.

Geely Automotive Group ranked third with sales of 254,000 units. Geely acquired Sweden’s Volvo Cars in 2010 and normalized it, and is accelerating its overseas expansion through sub-brand names such as Zeekr and LYNK & CO. Changan Automotive Group came in fourth with 214,000 units, followed by Shanghai GM O-ring (154,000 units). AITO, an electric car brand developed by Huawei and Cyris, came in sixth and Rioto seventh.

2. China Is Becoming the Grave of Foreign Cars

As Chinese automakers advance without hesitation due to the trend of electricity, the position of global finished car brands such as Volkswagen and Toyota is gradually shrinking.

According to the China Automobile Market Information Association (CPCA), local brands’ market share in China stood at 57.5 percent in May, up 21.8 percentage points from 35.7 percent in 2020. During the same period, the German market share plunged to 25.5 percent → 18.7 percent, and the Japanese market plunged to 24.1 percent → 14.8 percent. China is becoming the grave of foreign cars as Volkswagen and Toyota followed the path where Hyundai Motor and Kia’s share peaked and began to decline sharply in the mid-2010s.

The Chinese auto industry is full of confidence, with a consensus that the share of global finished car brands, which are currently in the low 40% range, could fall to about 30% in the future, and could plunge to less than 20% if they fail to adapt to the Chinese market.

In the Chinese automobile market, unlimited competition is unfolding on the back of the two trends of ‘electricization’ and ‘localization’, and the six-day week has become common due to Neizuan.

Battery manufacturers without electric vehicles and one body are no exception. In June, CATL, China’s largest battery maker, made headlines on social media that it will implement the 896 workday system. The 896 workday system means going to work at 8 a.m. and working six days a week until 9 p.m., which is more intense than the six-day week system, which means working on Saturdays.

In addition to CATL, the management and sales sectors of the Chinese automobile industry, such as Cherry Motors, are becoming more common on Saturdays. The Chinese automobile industry believes that only a few companies will survive the ongoing competition