The Secret to Chinese Electric Cars Beating Tesla

He further explained that the development of Chinese electric cars focuses on software development and digital integration. Other manufacturers focus on the hardware side.

Thus, the process of recalling vehicle units is no longer necessary. It should be noted that when a manufacturer announces a recall, owners must bring their vehicles to a workshop to be checked and serviced.

In many Chinese-made cars, repairs from suspension to security features can be done through software updates, thus reducing costs and making it easier for consumers.

The rapid launch of new models and software updates has proven difficult for Western car manufacturers to keep up with.

Photo : Geely

Not only that, Western brands are said to require five to seven years to introduce the latest generation of a particular model.

On the other hand, Chinese manufacturers like Li Auto only need half the time of other automotive producers, because their organizational system is agile like a startup.

Then, Chinese brands quickly follow market movements as the demand for electric cars increases.

To attract consumers more quickly, they will first increase the production of various entry-level models while competitors are busy expanding or overhauling their factories.

Foreign Brands Face Difficulties in China

Yu refers to the difficulties of foreign brands in China as a dual crisis. First, profits in China are declining even though the 'bamboo curtain' country is a key growth market for them.

The second problem is the inability of various brands to finance the research and development of electric cars, due to the large funds required.

Photo : Special

For example, Volkswagen is a traditional player with the best future readiness but is struggling due to declining revenue and a reliance on a hardware-centric model lineup.

New strategies must be considered if legacy automotive players want to survive amidst the onslaught of Chinese-made cars. Several Japanese brands have started partnering with local partners to present EVs (Electric Vehicles) specifically for Chinese consumers. 

This is not impossible to do. Considering that many traditional brands are already known and trusted by the public in the global market, while other Chinese brands, along with Tesla, are still concentrated in a few countries.