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Competing against Chinese electric vehicles in China is no easy task. Just ask the CEO of Volkswagen<\/a>.<\/p>\n The German automaker \u201ccannot keep up at the top of the table at the moment\u201d in China\u2019s EV sector, VW chief Oliver Blume told FAZ<\/a> in a Friday interview.<\/p>\n VW had long been China\u2019s best-selling automotive brand, but last year it was overtaken<\/a> by Chinese rival BYD<\/a>, which sells both EVs and plug-in hybrids but no longer produces<\/a> traditional cars. BYD, backed by Warren Buffett\u2019s Berkshire Hathaway<\/a>, also beat Tesla for the first time<\/a> in global sales of electric vehicles in the fourth quarter of last year, although Elon Musk\u2019s carmaker reclaimed the crown<\/a> in the first three months of this year.\u00a0<\/p>\n With sales of traditional vehicles declining in China, carmakers more focused on EVs have been gaining market share at the expense of legacy automakers. VW, with its local partners, still sells traditional vehicles in China, in addition to a relatively small number of EVs compared to BYD.<\/p>\n The intense competition in China\u2019s EV space is having ripple effects both within and outside the country. Last month, Bloomberg reported that Tesla<\/a> planned to reduce production<\/a> at its Shanghai plant, with the carmaker facing ever stiffer competition from Chinese rivals offering more affordable EVs with all manner of features<\/a>.<\/p>\n Across the globe, legacy automakers have been taken aback<\/a> by the prices at which Chinese EV makers\u2014which are rapidly expanding exports\u2014can offer their vehicles.\u00a0In the U.S., trade groups and lawmakers are warning about<\/a> Chinese EV makers possibly gaining market entry through Mexico and want already tough protectionist measures to be strengthened. In the EU, the European Commission is looking into whether Chinese EV makers have an unfair advantage thanks to government subsidies, and could recommend higher tariffs.<\/p>\n \u201cIf there are no trade barriers established,\u201d Musk said<\/a> earlier this year of Chinese automakers, \u201cthey will pretty much demolish most other car companies in the world. They\u2019re extremely good.\u201d<\/p>\n \u201cNo one can match BYD on price. Period,\u201d Michael Dunne, CEO of Asia-focused car consultancy Dunne Insights, told<\/a> the Financial Times <\/em>in January. \u201cBoardrooms in America, Europe, Korea, and Japan are in a state of shock.\u201d<\/p>\n Interestingly Australia, which has no legacy automakers to protect, is putting up no roadblocks to Chinese EV makers, which are quickly expanding there<\/a>.<\/p>\n In Japan last month, Nissan<\/a> and Honda<\/a>, facing the looming threat Chinese EV giants, announced a once unthinkable partnership<\/a> to develop electric vehicles together.\u00a0<\/p>\n \u201cThe rise of emerging players is becoming faster and stronger,\u201d Honda president Toshihiro Mibe told<\/a> the Financial Times<\/em>. \u201cCompanies that cannot respond to the changes will be wiped out.\u201d<\/p>\n Similarly, Ford said in February it\u2019s open to cooperating<\/a> with rivals to lower EV production costs, with GM signaling<\/a> a similar willingness. Both cited the rising threat from China.<\/p>\n As for Volkswagen, it said it might collaborate<\/a> on mass-market EVs with French rival Renault<\/a>, also with Chinese up-and-comers in mind.<\/p>\n As for competing on EVs within China, said VW chief Blume, his carmaker \u201cshouldn\u2019t have utopian expectations.\u201d<\/p>\n<\/div>\n\nChinese EV makers \u2018extremely good\u2019 <\/h2>\n
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