China’s proactive and assertive strategy in the automotive sector has sparked a response from other countries, who are now making concerted efforts to reduce the competitive gap. Competitors have recognized the need to step up their game to effectively tackle this challenge. Consequently, stakeholders within the industry are facing growing pressure to align their operations with the rapid technological advancements taking place in China’s automotive sector.

China has come a long way in the automotive industry, moving from a perception of imitation to becoming a global leader in electric vehicle technology. In the past, Geely and Cherry were often seen as imitations of Western or Japanese cars, while Haval was the rare exception that gained some trust.

However, with significant government support, China has established original equipment manufacturers (OEMs) to ensure they can produce the necessary components for building vehicles independently. This commitment to self-sufficiency has paid off, as China now holds the title of top exporter of electric vehicles and related products, including batteries and other innovations.

This achievement is a testament to China’s determination to establish itself as a leading player in the electric vehicle market.

Many observers, including myself, have long held the view that, given the current state of the industry, China will not emerge as a major player in the electric vehicle (EV) manufacturing market until at least 2028. Surprisingly, though, Chinese electric vehicle sales in Europe have surpassed those of domestic manufacturers like Tesla.

The key to the success of Chinese electric vehicles in the European market is their ability to source all original equipment manufacturers locally, eliminating the need to import. This allows them to produce vehicles with advanced features and high perceived quality at a price point below 20,000 euros.

The government’s strategy that prioritises investment in innovation and the manufacturing of motor vehicles—especially semi-autonomous and grid-connected cars—is closely tied to this achievement. Elon Musk has invested in a massive Tesla facility called the Giga Factory after taking note of these innovations and the Chinese OEM market.

Chinese automotive manufacturers conducted an extensive analysis of the electric vehicle market, which revealed that most EV customers typically commute around 40 kilometres (equivalent to approximately 24.85 miles) per day. As a result, substantial funding was allocated to the development of economical batteries with a practical range rather than investing in costly batteries with an extended range, which could affect the affordability of electric vehicles.

Several cost-effective Chinese EV models have a range of approximately 300 kilometres on a single charge, allowing for a weekly distance of 409 kilometres without requiring a recharge. China’s strategic positioning has placed it in a favourable position concerning the European Union’s goal of achieving carbon neutrality by 2050.

In 2023, the Chinese automotive market witnessed an impressive surge in the sales of battery-electric vehicles (BEVs), accounting for about 36% of total vehicle sales. Furthermore, China has made substantial investments in establishing a robust infrastructure to support the deployment of autonomous driving cars, keeping in line with the advancements brought about by the fourth industrial revolution.

Experts at Bloomberg NEF have foretold that by 2040, China will lead the world in terms of its extensive fleet of Robo taxis, with an estimated development of around 12 million units. The United States is projected to follow closely behind with approximately 7 million Robo taxis.

In addition to China, countries such as Abu Dhabi have already implemented Chinese We Ride autonomous taxis. The projected market for autonomous vehicles is anticipated to surpass 500 billion dollars by 2030. We Ride is a Chinese autonomous driving vehicle taxi company headquartered in Guangzhou.

China has obtained a licence in the United Arab Emirates to operate its self-driving taxis on that country’s highways and motorways, resulting in a thriving market for autonomous electric vehicles in China. This trend has caused significant concern among Western and European policymakers, as their strategies are not adequately prepared to compete with the well-designed long-term plan of the Orient.

Many people are concerned about the mining of rare materials used in electric vehicle (EV) batteries, which predominantly takes place in China. China manufactures and sells finished products within its own territory, ensuring self-sufficiency and reducing dependence on external parties for original equipment manufacturers.

The United States imposes a 27% import tariff on Chinese vehicles to deter any negative impact on its domestic electric vehicle market, with the European Union applying a 10% import duty. Several countries within the European Union offer subsidies for new electric vehicles, which encouraged a significant influx of Chinese individuals relocating to Europe.

Regrettably, some countries, including South Africa, are in a state of slumber. Minister Ebrahim Patel informed the press that electric vehicles will be available or manufactured within our borders by 2026. Certain companies, such as VW SA, have expressed significant apprehension regarding the reliability of our power grid and the cost of manufacturing goods in South Africa. Consequently, there have been indications that these companies may consider relocating to other locations.

As a member of BRICS, South Africa has the exciting opportunity to draw inspiration and knowledge from the thriving Chinese automotive industry. Moreover, it presents an ideal chance for South Africa to actively engage in and participate in this industry. Our country’s wealth of crucial minerals, which are currently mined and exported, could be utilised to process and manufacture automotive products locally. This shift would not only boost our economy but also foster technological advancement and skill development within our own automotive sector.

Catalytic converters, a widely utilised technology in automotive exhaust systems, are instrumental in reducing the harmful emissions released into the environment. Among the key components of these converters, aluminium holds paramount importance. While countries such as South Korea, Taiwan, and China have embraced a role as original equipment manufacturers in this domain, South Africa predominantly exports aluminium in its raw material state. This current export strategy limits South Africa’s potential to capitalise on the value-added opportunities associated with manufacturing catalytic converters locally.