Chinese tech companies transforming EV market, says German expert

BEIJING: China's tech companies could significantly transform the market for electric cars in the coming years, according to a German specialist who monitors the industry.

"It looks like we are witnessing the biggest transformation in the industry," Ferdinand Dudenhöffer said in a recent study on China, the world's largest car market.

Companies such as Huawei and Xiaomi, initially known abroad as makers of smartphones, are driving this shift, in his view.

These tech companies are developing vehicles with car manufacturers and supply the software that is crucial for intelligent cars, said Dudenhöffer, pointing to the SU7 saloon by Xiaomi and electric car brand Avatr, which Huawei set up with battery manufacturer CATL and other companies.

"The SU7 is not produced by Xiaomi itself, but assembled by the Chinese car manufacturer BAIC," Dudenhöffer noted.

Huawei supplies its Harmony operating system and so powers the voice control in the Avatr cars.

Dudenhöffer expects a kind of role reversal in the automotive industry, saying most of today's car companies now only assemble cars and are increasingly becoming suppliers for the tech giants, rather than vice versa.

The tech companies supply the ecosystem and intelligence for the car, said Dudenhöffer, who added, "Bending sheet metal is getting boring."

China is the world's most important market for electric cars, a highly competitive market. Chinese car manufacturer BYD and US e-car maker Tesla are in a tightly-fought race for customers.

German car makers, the most important in Europe, meanwhile are being left behind.

In the fourth quarter of 2023, BYD overtook Tesla for the first time in terms of sales figures for electric cars.

"BYD will replace Toyota in around 10 years," Dudenhöffer forecast.

The Japanese company is currently the largest car manufacturer in the world.