China’s carmakers are on track to capture about one-third of the global auto market by 2030 and generate most of their profits overseas, according to UBS, underscoring the resilience of the country’s electric vehicle (EV) advantage despite mounting trade barriers in the West.
The Swiss bank said its forecast had remained unchanged from two years ago, even as Chinese carmakers accelerated factory construction in Europe and some global rivals scaled back electrification plans.
“The main drag was due to Europe’s slowdown of EV adoption, and tariffs and protectionism against Chinese EVs,” said Paul Gong, an analyst at UBS specialising in Chinese EVs. “I think 2024 progress was slower than expected, but recent signs have shown some catch-up.”
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
UBS estimated that overseas markets now accounted for about 20 per cent of industry sales and as much as 50 per cent of earnings for some Chinese carmakers, highlighting their growing reliance on international expansion as domestic competition intensified.
Industry executives said the forecast did not suggest China would dominate the market alone. Instead, they argued that global competition was increasingly coalescing around a small number of large EV platforms – a shift that still left room for emerging players such as India.
Global competition is increasingly coalescing around a small number of large electric vehicle platforms, industry executives say. Photo: Reuters alt=Global competition is increasingly coalescing around a small number of large electric vehicle platforms, industry executives say. Photo: Reuters>
“The fact that [China] has been learning aggressively means that they’re going to have a dominant position and market share,” said Frank Diana, managing partner and principal futurist at Tata Consultancy Services. “But they’re not alone … you will see the rise of other players in the space.”
Diana advises carmakers and manufacturers on technology strategy and digital transformation at Tata Consultancy Services, India’s largest IT services company and part of the Tata Group, a conglomerate with interests spanning energy, steel and hospitality.
India is among the markets beginning to close the gap – at least domestically. “Tata Motors and Mahindra are the two Indian companies that have rapidly grown their market share in the last five to six years,” said V.G. Ramakrishnan, managing partner at automotive consultancy Avanteum Advisors.
Both companies have expanded their EV portfolios and pursued overseas acquisitions, including Tata Motors’ ownership of Jaguar Land Rover and Mahindra’s purchases of South Korea’s SsangYong and Italy’s Pininfarina.
“However, these investments have not fully translated to these companies becoming global players as Brand Tata or Brand Mahindra,” Ramakrishnan said. “While both companies have an international presence through exports, they are not significant players in the global market.”
Against that backdrop, Diana said China was likely to remain the dominant force in EVs as the industry consolidated around a limited number of large platforms.
“So there will be consolidation even at the EV market level, and you end up with 10 to 15 platform orchestrators made up of [original equipment manufacturers and] big technology companies,” he said.
As Chinese carmakers globalise, competition will increasingly hinge on platforms and partnerships rather than individual markets, says Frank Diana of Tata Consultancy Services. Photo: Peggy Ye alt=As Chinese carmakers globalise, competition will increasingly hinge on platforms and partnerships rather than individual markets, says Frank Diana of Tata Consultancy Services. Photo: Peggy Ye>
Analysts said China’s staying power was rooted not just in scale, but in years of early investment that translated into faster learning cycles, vertically integrated supply chains and cost advantages that were difficult to replicate.
“The EV supply chain is dominated by Chinese companies,” Ramakrishnan said. “The India EV supply chain, including electronics, is imported from China.”
To blunt trade barriers, Chinese carmakers are increasingly shifting from exports to local production. Thailand already hosts full production plants of SAIC, Great Wall Motor and BYD, while Brazil and Hungary are set to add major BYD and GWM facilities by the middle of the decade.
That expansion could eventually intensify pressure on India’s domestic champions. Tata Motors, India’s EV market leader, was targeting EVs to make up 30 per cent of its domestic sales by 2030, though analysts warned that reduced subsidies, narrowing tax incentives and gaps in charging infrastructure could slow growth.
Ramakrishnan said Tata’s EV market share had already declined year on year as rivals such as Maruti Suzuki and MG Motor rolled out new models.
Chinese brands remain keen to deepen their India presence. BYD operates through a joint venture with limited sales volume and no manufacturing footprint, while Chery and Great Wall Motor are seeking entry should regulatory conditions ease.
“As and when [Chinese brands] come in, the customers will accept these brands,” Ramakrishnan said.
As Chinese carmakers globalised, competition would increasingly hinge on platforms and partnerships rather than individual markets, Diana said, pointing to Africa as the next strategic battleground.
“If you are able to create a relationship with South Africa, and you form a pathway into the broader African market, then you’ve expanded your space,” he said. “So it focuses on relationships, strategic partnerships, not just technology and supply chain.”
