As cars go electric, China builds a big lead in factories
ZHAOQING, China — Xpeng Motors, a Chinese electric car startup, recently opened a large assembly plant in southeastern China and is building a matching factory nearby. It has announced plans for a third.
Another Chinese electric car company, Nio, has opened one large factory in central China and is preparing to build a second a few miles away.
Zhejiang Geely, owner of Volvo, showed off an enormous new electric car factory in eastern China last month rivaling in size some of the world’s largest assembly plants. Evergrande, a troubled Chinese real estate giant, has just built electric car factories in the cities of Shanghai and Guangzhou and hopes to be making almost as many fully electric cars by 2025 as all of North America.
China is erecting factories for electric cars almost as fast as the rest of the world combined. Chinese manufacturers are using the billions they have raised from international investors and sympathetic local leaders to beat established carmakers to the market.
Success is far from assured. The players include startups, electronics manufacturers and other car industry rookies. They are betting that drivers in China and beyond will be willing to spend $40,000 or more for brands that they had never heard of.
Chinese automakers concede that experience gives the established car companies some advantages. But they insist their plans will work.
“We have the will, and we have the patience,” said He Xiaopeng, the chairman and chief executive of Xpeng, in an interview. “I think we will find it very challenging, but we must also move forward.”
The Chinese industry has momentum. China will be making over 8 million electric cars a year by 2028, estimates LMC Automotive, a global data firm, compared with 1 million last year. Europe is on track to make 5.7 million fully electric cars by then.
General Motors and other North American automakers have plans to catch up. In April, President Joe Biden called for the United States to step up its electric vehicle efforts. During a virtual visit to an electric bus factory in South Carolina, he warned, “Right now, we’re running way behind China.”
North American automakers are on track to build only 1.4 million electric cars a year by 2028, according to LMC, compared with 410,000 last year.
Global car companies are helping China’s lead. Volkswagen recently began construction on its third Chinese factory designed to produce electric cars.
China already has the electric car infrastructure, thanks to a government-backed nationwide rollout of over 800,000 public charging stations. That is almost twice as many as the rest of the world, although drivers in the United States — who are more likely to live in single-family houses — can more easily plug in their cars at home.
With a slower deployment of charging stations outside China, automakers elsewhere plan to continue building some plug-in hybrid cars with small gasoline engines for a few more years. But the market for fully electric cars is already bigger than for plug-in hybrids, and the electric cars’ lead is widening rapidly. Automakers like GM plan to eliminate gasoline and diesel engines entirely in the next 15 years.
For the new Chinese cars, name recognition will be a major challenge. The brands are mostly unfamiliar even to Chinese drivers. On roads filled with Buicks, Volkswagens and Mercedes-Benzes, they could struggle to stand out.
Alibaba, the e-commerce company, and two state-backed firms have set up an electric car joint venture under the name IM Motors, which plans to begin delivering cars early next year.
Evergrande named its brand Hengchi, pronounced “Hung-cheh.” A stock market mania for electric cars has propelled the Hong Kong-traded shares of the company’s electric car unit, Evergrande New Energy Vehicle, to almost the same market capitalization as GM.
Evergrande plans to make and sell 1 million fully electric cars a year by 2025. So far, it has sold none.
Geely, an industry veteran with recognized brands in China, has named its electric brand Zeekr, which rhymes with “seeker.” It plans to begin delivering cars in October.
The Zeekr is being made in a new electric car factory near Ningbo, on China’s eastern coast. The factory is a cavernous space with miles of white conveyor belts and rows of 15-foot cream-colored robots made by ABB of Sweden. It has an initial capacity of 300,000 cars a year, larger than most car factories in Detroit, and floor space for expansion.