Auto Shanghai to Showcase Electric Competition at Sector’s New Frontier
The world’s biggest auto show opened Wednesday in Shanghai, with foreign carmakers eager to demonstrate their competitiveness against Chinese firms that dominate the electric vehicle sector.
As traditional internal combustion engines face challenges, major auto expos like Paris and Detroit are re-inventing themselves. In contrast, Shanghai’s event is already centered on cleaner engines and AI-powered operating systems. China’s government has historically supported EV and hybrid development, propelling the country to the forefront of this sector.
In 2024, EVs and hybrids accounted for 26% and 19% of total car sales in China, respectively, according to Inovev. “It’s the only country that manages to get the automobile sector’s industrial giants cohabiting with the innovation of a multitude of startups,” said Deloitte analyst Guillaume Crunelle.
The Auto Shanghai exhibition, running until May 2, will feature numerous launches of electric, high-tech models including luxury SUVs, saloons, and multi-purpose vehicles, all designed and built in record time. Dozens of brands will participate, ranging from state-owned enterprises to startups like Li Auto and Xpeng, as well as tech giants such as Huawei and consumer electronics company Xiaomi, which has ventured into car manufacturing.
Analysts consider the Chinese market, the world’s largest, to be younger and more receptive to new technologies. However, it is also intensely competitive. Some startups have already failed, while established brands like SAIC Motor, BYD, and Geely are engaged in a fierce price war. Reports of potential mergers among state-owned auto enterprises suggest government efforts to consolidate companies and create global leaders.
“They are in a phase of rationalisation and simplification directed by the state,” Crunelle explained. Many companies are also looking to expand into overseas markets, hoping to boost sales in regions like Southeast Asia, Europe, and Latin America to secure their future.
Foreign carmakers, particularly German manufacturers, have faced challenges in the new market landscape. After years of dominating the Chinese market, Volkswagen, BMW, and Mercedes have seen their sales decline as domestic brands gained popularity. Volkswagen is attempting to recover at this year’s show with three China-developed vehicles and an advanced autonomous driving system.
Volkswagen’s China chief, Ralf Brandstatter, stated that foreign manufacturers still have opportunities in China as Beijing increases its reliance on foreign investment amid economic slowdown. The company has chosen to prioritize profitability over sales volume and market share in the face of intense price competition.
German manufacturers will need to demonstrate their innovative capabilities to maintain their current market share, according to analyst Stefan Bratzel. He noted that regaining their former market supremacy is unlikely.
The US-China trade tensions, exacerbated by potential tariff increases under Donald Trump’s presidency, add to the uncertainty. Notably, Tesla will not be participating in Auto Shanghai, despite having two large factories in the city. However, other US brands like Cadillac, Buick, and Lincoln will be present, showcasing models produced and sold locally.
