![\"\u0421elebration](\"http:\/\/bricsmagazine.com\/en\/wp-content\/uploads\/sites\/2\/2025\/06\/first-automobile-works-celebrating-their-first-products-1956-edited.jpg\")
\u00a9 Wikimedia Commons<\/sup><\/em><\/figcaption><\/figure><\/div>\n\n\n
Yet, until 2024, there were no such things as Xiaomi cars. Known primarily for consumer electronics, Xiaomi decided to convert its brand popularity into additional revenue by entering the automotive sector. Their first attempt resulted in a car described in the press as a competitor to none other than the Porsche Taycan. This was not an isolated success story: currently, over 150 brands are producing cars in China, many focusing specifically on electric and hybrid models equipped with advanced technologies like autonomous driving systems. These cars boast impressive characteristics and designs compared to offerings from established European and American luxury brands.<\/p>\n\n\n\n
Chinese vehicles are now sold in more than 200 countries. According to data from S&P Global Mobility, production in China continued growing throughout 2024 while volumes dropped among traditional leaders in the industry: the US, Europe and Japan (see Chart 3). Today, China leads the world both in total production and sales volumes, accounting for 35.4% of all global automobile output.<\/p>\n\n\n
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Even more striking is that China dominates the production and sale of so-called new-energy vehicles (NEVs), a term used locally to refer to battery-\u00adelectric cars and plug-in hybrids. In 2024, Chinese brands accounted for 62% of global EV sales, or more than 11 million of the 17 million units produced. In 2024, exports of electric cars and plug-in hybrids increased by 24.3% year-on-year, reaching 1.29 million units despite being barred from the United States, the second-\u00adbiggest auto market in the world.<\/p>\n\n\n\n
Even in the EU, where higher tariffs have been imposed on imported cars, certain member states report shares of Chinese EVs ranging between 10%\u201311%. Meanwhile, according to Bloomberg, during the first half of 2024, 89% of all electric cars sold in Brazil came from China. Chinese-made EVs also dominate the markets in Thailand (80%) and Indonesia (75%).<\/p>\n\n\n
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For many nations today, the face of the electric car industry is not Tesla, which pioneered the trend, but rather China\u2019s BYD company. Starting as a manufacturer of rechargeable batteries, BYD surpassed Tesla in terms of fully electric vehicle production in 2024: 1.78 million versus 1.77 million for their US rival. If hybrids are included, BYD\u2019s annual output reached 3.5 million NEV units, a figure greater than what iconic Suzuki sold globally in 2024. BYD accounts for roughly three-\u00adquarters of exported EVs. Additionally, Chinese firms led by CATL maintain leadership in developing and manufacturing batteries for electric transport, providing consultation services even to Western automakers.<\/p>\n\n\n\n
It was not long ago that China\u2019s auto industry lagged far behind the rest of the world. How did a country that began by copying Soviet trucks become the leader of the electric mobility revolution?<\/p>\n\n\n\n
Legacy of Soviet ZIS Trucks<\/h2>\n\n\n\n
In the early 20th century, factories operated by Western car manufacturers, such as Ford Motor Company, General Motors, and Mercedes-\u00adBenz, were already functioning in Shanghai. Cars and trucks started appearing in China in the 1910s and 1920s, initially concentrated on foreign-held territories known as concessions. Especially notable was Shanghai, home to French, British, and International Concessions, where cars became a familiar sight, albeit mostly owned by foreigners. Local dealers sprang up and, reflecting the trends of the era, some cars were occasionally assembled locally.<\/p>\n\n\n
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<\/figure><\/div>\n\n\nYet, the expansion of motorized transport was severely hampered by the near-total lack of proper roads. Big cities along China\u2019s East coast were linked solely by rudimentary trails. Trucks meant for transporting goods between these cities had to be rugged rather than fast, necessitating specialized construction unlike those found in Europe or America. Truck chassis also doubled as foundations for the buses vital for urban public transport.<\/p>\n\n\n\n
Given these circumstances, it seemed logical to establish a factory for truck production. Daniel Meyers, an American engineer, specially developed a truck called Minsheng for China, intended for mass production starting in 1931. Unfortunately, the factory was destroyed during Japan\u2019s invasion of Manchuria, halting production efforts indefinitely.<\/p>\n\n\n\n
Consequently, the first Chinese-\u00adproduced vehicle to achieve mass production was the Jiefang CA\u201110 truck, introduced by First Automotive Works (FAW) in 1956. Founded in 1953 with technical and financial assistance from the Soviet Union, FAW modelled its design closely on the Soviet ZIS\u2011150, itself inspired by an American truck from the 1930s. Innovation was not prioritized back then; ensuring stable production to meet China\u2019s transport needs took precedence.<\/p>\n\n\n
![\"\"](\"http:\/\/bricsmagazine.com\/en\/wp-content\/uploads\/sites\/2\/2025\/06\/pg_087-1-613x1024.jpg\")
<\/figure><\/div>\n\n\nIn 1958, China launched the \u201cGreat Leap Forward\u201d, an economic and social campaign running through 1962 under the leadership of the Communist Party of China, with the explicit goal of closing the gap with Western industrial powers. Chairman Mao Zedong sought to transform the country from an agrarian economy into an industrialized one by establishing people\u2019s communes. As part of this initiative, several Chinese factories, including FAW, began, from 1958 onward, to develop domestically produced passenger cars for civilian use.<\/p>\n\n\n\n
One of the best-known results was the Hongqi CA72 executive sedan, engineered by FAW. When series production was launched in 1959, its design evoked traces of the Soviet GAZ\u201121 Volga and ZIL\u2011111 limousine, although technologically it mirrored an American Chrysler Imperial replica. Named after the \u201cRed Banner\u201d, the Hongqi quickly became the official vehicle of senior party members.<\/p>\n\n\n\n
Nonetheless, during the initial three decades following the founding of the People\u2019s Republic of China, passenger car production remained highly restricted, with vehicles rarely available to individual buyers. Only 5,200 passenger cars and approximately 360,000 trucks were manufactured nationally in 1985. Typical road traffic at the time consisted of trucks, buses, taxis, and millions of cyclists.<\/p>\n\n\n
![\"\"](\"http:\/\/bricsmagazine.com\/en\/wp-content\/uploads\/sites\/2\/2025\/06\/pg_088-1-863x1024.jpg\")
<\/figure><\/div>\n\n\nJust a year later, the Chinese government adopted the Seventh Five-\u00adYear Plan, formally recognizing the automotive industry as a cornerstone sector. The Chinese auto industry transitioned away from small-\u00adscale manual assembly shops to modern Western-\u00adstyle production lines and rigorous quality-\u00adcontrol. Levels of local sourcing for car components gradually climbed, even though much of the output originated from joint venture factories partnered with Western brands like Volkswagen, Citro\u0451n, Jeep, and Suzuki. Model localization eventually exceeded 90%, allowing key components such as bodies, engines, transmissions, front and rear axles to be manufactured domestically.<\/p>\n\n\n\n
Beginning in the late 1990s, China\u2019s auto industry grew exponentially, propelled chiefly by the vast internal market where rising consumer affluence fuelled demand. Annual production escalated dramatically from 2 million cars in 2000 to nearly 29 million by 2017.<\/p>\n\n\n\n
The Electric Habit Takes Hold<\/h2>\n\n\n\n
Understanding the phenomenon of China\u2019s dominance in electric vehicle production requires acknowledging that EVs did not enter a void. Before electric cars became mainstream, Chinese people had already formed habits associated with electric transport, specifically calculating distances on single charges. We are talking here about electric bicycles and scooters: for millions of Chinese people, these two-wheeled machines represented their first experience with motorized transport. Why electric bikes rather than the noisy petrol-\u00adpowered scooters ubiquitous across Asia?<\/p>\n\n\n
![\"\"](\"https:\/\/bricsmagazine.com\/en\/wp-content\/uploads\/sites\/2\/2025\/06\/pg_089-1-512x1024.jpg\")
<\/figure><\/div>\n\n\nThe dramatic surge in electric bicycle popularity in China owes less to technological breakthroughs and more to farsighted government policy. Efforts to promote environmentally friendly modes of transport coincided with severe restrictions placed on petrol-\u00adpowered motorbikes. City administrations across the country enacted decisive measures: outright bans on motorcycles in central districts, suspension of new licence issue and sale of number plates at auctions. Electric bikes escaped these limitations altogether.<\/p>\n\n\n\n
Such policies pursued several key objectives simultaneously: alleviating traffic congestion, enhancing road safety, and addressing environmental concerns in densely populated metropolitan areas. Consequently, electric bicycles transformed from a fleeting trend into lifelines for Chinese cities. More than 90 major Chinese cities enforced restrictions on motorbikes, consolidating electric bikes as the go-to choice for urban dwellers.<\/p>\n\n\n\n
During this period, while the rest of the world honed internal combustion engines striving for optimal ecological performance, China witnessed remarkable growth in the production and sale of two-wheeled electric vehicles. Annual sales of electric bicycles alone soared from 40,000 units in 1998 to 10 million by 2005. By 2013, the total number of electric bikes on Chinese roads exceeded 200 million. Unlike Western consumers, for whom electric transport might have felt unfamiliar, Chinese riders had already embraced this form of mobility. So, when China began producing electric cars, the market was poised to welcome them openly: the seeds landed on fertile soil.<\/p>\n\n\n\n
Internal Drivers<\/h2>\n\n\n\n
Entering the 2000s, prior to mastering electric vehicle production, China\u2019s automotive industry was already firmly entrenched in manufacturing conventional internal combustion engine (ICE) vehicles. Even so, the country acknowledged a shortage of domestic brands capable of challenging foreign competition, particularly on both external and domestic markets. Faced with these realities, the Chinese government opted to channel investments into a radically different area: vehicles powered exclusively by electric motors and batteries. Risks loomed large: up to that point, electric cars had remained experimental niches for big-name brands (such as GM and Toyota), typically fading into oblivion within a couple of years. Simultaneously, countries leading in petrol or hybrid vehicle production lacked sufficient motivation to explore alternate types of transport. Similarly, fossil fuel-trading companies had little incentive to alter the status quo. The automotive industry is undergoing profound changes driven by electrification, digitization, and development of smart technologies. In China, the primary catalyst to the industry\u2019s evolution will be emission reduction targets: achieving peak carbon emissions by 2030 and becoming carbon neutral by 2060. This means that electric vehicles will continue to be a focal point. 1. Provided Financial Subsidies to EV Manufacturers<\/strong> 2. Organized Public Procurement Contracts<\/strong> 3. Stimulated Consumer Demand for EVs<\/strong> 4. Fostered Cooperation Between Local Governments and Producers<\/strong> 5. Did Not Limit Competition with Foreign Brands<\/strong> Do you want to see the cars of the future? Take a look at China\u2019s electric vehicles. Futuristic, packed with incredible features and affordable: today, Chinese brands dominate more than half the global EV market, pushing aside Japanese, German, and American manufacturers. By the end of 2024, brand No. 1 in this segment was no longer Tesla but the BYD Group. This tectonic shift occurred within just a few years. BRICS Business Magazine explains how China achieved it.<\/p>\n","protected":false},"author":2,"featured_media":2260,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"country":[71],"authors":[],"class_list":["post-2259","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry","country-china"],"acf":[],"yoast_head":"\n
Recognizing their inability to overtake American, German, and Japanese automakers in ICE-related technologies, China looked elsewhere. When it came to hybrid vehicles, where batteries initially played a minor role relative to ICEs, Japan held sway. Toyota, for instance, unveiled its incredibly successful Prius hybrid sedan in 1997.<\/p>\n\n\n\n![\"\"](\"http:\/\/bricsmagazine.com\/en\/wp-content\/uploads\/sites\/2\/2025\/06\/shutterstock_2441625591-edited.jpg\")
Concurrently, electric vehicles appealed to China for additional reasons: the potential reduction in severe air pollution, less dependence on imported oil, and economic stimulus after the 2008 financial crisis. To policymakers, betting on electric mobility appeared a foolproof strategy.
Starting in 2001, the Chinese government engaged intensively in electric vehicle technologies, incorporating them as a priority R&D project in the country\u2019s subsequent five-year economic plan. Further impetus arrived in 2007 when Wang Gan, having spent several years working as an automotive engineer at Audi in Germany, was appointed Minister of Science and Technology. Wang was an ardent advocate of electric vehicles, personally testing the first Tesla Roadster upon its 2008 market debut. He reportedly resolved to dedicate his entire tenure to championing electric vehicles. Ever since, EV development has remained a cornerstone of China\u2019s national economic planning.
An additional reason for China\u2019s preeminence on the EV market lies in its advancements in battery technology. Batteries constitute a pivotal component of electric vehicles, accounting for up to 40% of their total cost. Critical for commercial success, batteries must balance capacity, reliability, and affordability. Chinese companies excelled not only in replicating existing technologies but also innovating independently. While Western firms conventionally favoured lithium nickel manganese cobalt (NMC) batteries, China chose to focus on lithium iron phosphate (LFP) battery technology, emerging victorious.
Initially, LFP batteries stood out for safety and low cost but suffered drawbacks in energy density and suboptimal performance in colder climates. Companies like Contemporary Amperex Technology Co.\u202fLtd. (CATL) invested over a decade researching these shortcomings, successfully bridging gaps in energy density. Now constituting around a third of all batteries for electric transport, their share continues to expand. Western firms find themselves increasingly reliant on procuring batteries from China or consulting with Chinese experts when developing proprietary solutions.
Moreover, China grasped earlier than others the importance of securing the rare earth metals essential for battery production. Currently possessing the requisite processing capacities, Beijing ensures access to minerals crucial for the green economy, whereas other nations scramble to secure mines offering \u201cfuture minerals\u201d.<\/p>\n\n\n\nWhat Comes Next?<\/h2>\n\n\n\n
At least on the domestic market, which happens to be the largest globally, the outlook appears very positive. In 2024, consultancy firm AlixPartners published a survey assessing consumer attitudes toward electric vehicles. The findings were startling: in China, 97% of respondents said their next car would probably be fully electric. By contrast, only 35% of Americans and 43% of Europeans reported similar intentions. Moreover, Chinese consumers overwhelmingly prefer domestic brands. Understandably so: China holds a clear advantage in the electric vehicle race, excelling not only in pricing but also in product quality and feature-rich options. This lead is unlikely to shrink in the foreseeable future.<\/p>\n\n\n\n
\n\n\n\nImpulses Behind China\u2019s Electric Vehicle Revolution<\/h2>\n\n\n\n
![\"\"](\"http:\/\/bricsmagazine.com\/en\/wp-content\/uploads\/sites\/2\/2025\/06\/pg_096-1024x518.jpg\")
Starting in 2009, the government began issuing subsidies to companies producing electric buses, taxis, and individual consumer cars. In that year, fewer than 500 electric cars were sold in China. Greater financial resources allowed companies to enhance their product development and lowered purchase costs for consumers. Over the span of 2009\u20132022, the government allotted over USD 29 billion in subsidies and tax benefits, which had the desired effects: annual EV sales multiplied into the millions.<\/p>\n\n\n\n
The Chinese government supported local EV manufacturers by awarding procurement contracts. Long before private customers generated substantial sales (which took around two years), electric vehicles were integrated into extensive public transport systems.<\/p>\n\n\n\n
In major cities like Beijing, car registrations follow quota systems, requiring applicants to wait years or spend thousands of dollars to obtain permits for conventional vehicles. In contrast, acquiring an electric vehicle has streamlined this process considerably.<\/p>\n\n\n\n
BYD, which has challenged Tesla\u2019s dominance on the electric transport market, has flourished thanks to tight cooperation with the city of Shenzhen. Collaborative efforts culminated in Shenzhen becoming the first city in the world to electrify fully its bus fleet.<\/p>\n\n\n\n
Despite prioritizing domestic EV manufacturers, the Chinese government extended subsidies beyond local entities. Shortly after launching its Gigafactory in Shanghai, Tesla received financial aid. Apart from generating jobs, China benefited indirectly: Tesla motivated Chinese brands to accelerate innovation and strive to match, or exceed, Tesla standards. Now, Tesla itself is facing the challenge of sustaining its competitiveness in China.<\/p>\n","protected":false},"excerpt":{"rendered":"