China – motoring on many fronts
The January/February data releases from China were encouraging. Retail sales increased 4% year on year according to the National Bureau of Statistics. Meanwhile industrial output rose 5.9% and fixed-asset investment accelerated to 4.1%, over the same period. All three data releases beat expectations.
BYD has unveiled a line-up of electric vehicles that it says can charge almost as fast as it takes to refuel a ICE. BYD’s new battery and charging system is capable of providing around 400km of range in just 5 minutes according to Chairman and founder Wang Chuanfu. Following a sharp rally on Tuesday 18th March, BYD (which stands for Build Your Dreams) now has a larger market capitalisation than Ford, General Motors and Volkswagen combined.
Not to be outdone CATL filed a new patent every two hours last year according to their latest annual report and has just launched the world’s first LFP (lithium iron phosphate, LiFePO4) battery which gives a range of circa 1,000km. Game changer.
Chinese passenger car exports climbed some 20% last year to nearly 5mn. This compares to less than 1mn in 2019. Last year China overtook Japan (4.2mn) for the first time. It is interesting to note where these cars are going. Number one was Russia (0.957mn) which is probably not a surprise, Mexico (0.386mn) comes second and the UAE (0.247mn) third. Belgium (0.247mn) is fourth and the UK (0.167mn) is seventh. No other European country is in the top 10 and neither are the United States or Canada. Chinese cars are going to the Global South. Interestingly only 20% of total exports are EVs, 80% are old fashioned gas guzzlers, which reflects the limited EV recharging capabilities in the Global South at present. This will change.
Chinese brands received a boost in Brazil a decade ago when the government made electric vehicles and hybrids exempt from a 35% import tax. No surprise that BYD and Great Wall are now building plants in Brazil on sites where Ford and Daimler once ran facilities.
Finally, we look at Thailand, long known as ‘The Detroit of Southeast Asia’. The market share of Chinese brands reached 13.3% in 2Q24, more than twice the 5.5% market share two years prior. China’s share of Thailand’s EV market has exploded from 22% to 71% over the same time period. This follows from Thailand’s slashing of import duties on EVs, the introduction of buyer subsidies and big tax breaks for plant investment.
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