China tech rush for EVs to drive faster growth

Thought Big Tech was taking over your life through smartphones? It may be coming for your car next as Chinese firms lead a stampede into auto manufacturing in their battle for more consumers.

Cars are the next major prize in the battle for digital territory, industry insiders say, and the deep pockets and data muscle of big Chinese tech firms will fuel even faster growth in “smart-electric” vehicles — and hasten the arrival of autonomous cars.

In recent weeks, Chinese smartphone giants Huawei and Xiaomi, e-commerce leader Alibaba, and even DJI, the world’s top drone manufacturer, have thrown their hats into the ring.

“This sort of competition is a good thing and will greatly accelerate innovation,” William Li, founder, chairman and CEO of Chinese electric vehicle producer NIO, said in an interview ahead of the Shanghai Auto Show.

The first major auto industry gathering of the year opens to the public today with the global sector looking to China — the world’s biggest and most rapidly electrifying auto market — to lead the way into a post-pandemic future.

Sales in China contracted 2 percent to 25.1 million vehicles last year — nearly one-third of the global total — but are rapidly recovering thanks to the expanding popularity of electric cars.

Just a tiny fraction of Chinese sales until recently, EVs accounted for around 9 percent in March, according to official figures.

China’s government expects new-energy vehicles — which integrate the most advanced driving technology — to comprise 25 percent of car sales by 2025, and recent announcements appear to bode well.

Xiaomi, which has become one of the world’s biggest smartphone suppliers, plans to invest US$10 billion over the next decade in a smart EV subsidiary, and Huawei will invest US$1 billion this year.

Alibaba-linked autonomous driving unit AutoX has partnered with Japan’s Honda to ramp up testing on Chinese roads. And tech giant Baidu said on Monday its Apollo autonomous navigation system would be installed on 1 million vehicles over the next three to five years.

Cars represent a fresh opportunity for companies like Huawei, now rushing to develop its own tech ecosystem after United States sanctions banned it from using Google’s Android.

Huawei has realized its current “market limitations,” said Chen Yusheng, chief technology officer for procurement analysis firm Shanghai Autodatas Co.

“(Huawei) will enter a new track in the future, and with its own advantages, including combining software and hardware, will help promote lightning-fast development of smart cars and autonomous driving,” Chen said.

Even potential competitors seem intrigued.

“This is very reassuring. (Tech companies) see there is an opportunity in this industry, which means that this industry still has a very bright future,” said Antoine Barthes, managing director of the automaking joint venture Dongfeng Nissan.

“And they are probably going to shape the industry.”

Autonomous driving remains largely in the testing phase but China is widely expected to take the lead thanks to government encouragement, modern infrastructure, and a head start in deploying necessary 5G networks.