In China, everything is changing fast, especially in the technology. Now, AI+Big Data+Cloud is radically transforming the Chinese traditional industries.
Compared with other traditional industries, Car industry has been through a lot of change since Tesla was born.
First，Chinese car industry is already matured, and the growth is negative in recent years. The overall sales volume of car reached top in 2017 at 29M, and gradually reduced to 25M in 2019.
Second, in recent years, Chinese government is pushing the traditional car industry revolutionized into electric vehicle from various aspects, such as car plate permission, subsidy, and constructing largest public charging infrastructure.
In my opinion, the EV is growing fast as similar as the smart phone industry happned before. Tesla is transforming the car industry, which like APPLE has transformed the phone industry.
The interesting part is the most sucess phone brand is iPhone in the mobile internet era, instead of the traditional phone companies, such as Nokia, Motorola. Actually, Nokia and Motorola has already throw the phone business out, as we know, they has more than half of the world market share once before.
Will this happen in the traditional car industry? The answer is not clear so far.
With the success of iPhone, the Chinese smart phone companies also has great achievement, for example, Xiaomi, Huawei phone, OPPO and Vivo. It is noted that Xiaomi has grown into Top three for only 10 years history.
Similarly, with the success of Tesla and the encouragement of Chinese government, the electric vehicle industry grows very fast from 10K sales volume in 2011 to 1.24M sales volume in 2019. The electric vehicle market is growing at 10 times within less than 10 years.
China’s EV market represented 45.1 percent of the global EV sales volume and is expected to grow at a CAGR (compound annual growth rate) of 29.4 percent from 2019 to 2025, reaching 4.2 million units in 2025, according to IHS Markit Report.
We can see very clearly that the Chinese EV market share is less than 5% in the Chinese overall car industry, so the golden era of electric vehicle is coming.
In the backdrop, three electric vehicle starup, NIO, Li Auto, and Xpeng, were all IPO in US market after only several years foundation. This is unthinkable in the traditional car industries, however, that shows the venture has confidence these startups will have bright future in the electric vehicle industry.
NIO became the first Chinese electric car startup listed in the US, when it held its IPO in 2018.
Xpeng’s listing marked the latest Chinese electric startup’s effort to raise capital in the United States, following Li Auto in July 2020 and Nio in September 2018.
NIO, Li Auto, and Xpeng are purely EV companies in China, which will naturely brings up the question: who will be the Tesla of China in the future?
I believe that all of the three companies have the potential, and I will give my thoughts in the next posts.