Electric vehicles are advancing rapidly in China. Upstart automakers have surpassed overseas rivals to develop cars faster, push smart tech, and overwhelm buyers with choices in the EV boom.
Industry officials claim Chinese automakers are 30% faster in development than legacy manufacturers because they have disrupted decades-old combustion-engine automobile manufacturing techniques.
These ventures work on multiple development stages simultaneously. Smaller, speedier suppliers will replace traditional ones. They do more virtual testing than time-consuming mechanical ones. They are redefining automobile market readiness.
Foreign automakers agree they are pursuing the game, scared of Chinese rivals they formerly regarded as second-rate. As electric vehicle demand slows, China’s prowess and worldwide ambitions raise concerns that it may swamp the world with cheap automobiles.
NIO, one of China’s leading electric-vehicle start-ups, delivers vehicles to consumers in less than 36 months, compared to four years for many established carmakers. It releases cars with latent technology like a spare chip that lets it add new features via software updates.
According to NIO product committee director Mark Zhou, “The faster you can introduce a new technology to the market, provided that it’s a reliable technology, then the chance for you to gain market share will be much bigger.”
EV start-up Zeekr, owned by decades-old automaker Geely, can develop vehicles in 24 months. It quickly releases SUVs, multifunctional vehicles, and hatchbacks that share manufacturing and digital architecture with Polestar and Smart.
China sells the most electric vehicles due to considerable government subsidies. From driver-assistance to in-car entertainment, carmakers prioritise consumer satisfaction with software and digital technology.
Even in China, electric vehicle demand is slowing, forcing carmakers to update and offer new models. New cars accounted for 90% of China’s passenger-car sales rise in 2023.
Chinese purchasers like new cars, therefore they have a limited lifespan. AlixPartners found that domestic electric vehicle companies upgrade models every 1.3 years, while overseas brands update every 4.2 years.
Global automakers are increasingly studying Chinese competition, a departure from the industry norm. Tesla CEO Elon Musk and Ford CEO Jim Farley said China will be their biggest danger. Volkswagen and Nissan are speeding up with Chinese methods.
As Chinese rivals grow, global automakers risk falling behind in technology if they cut investments. Apple has shelved its electric vehicle project, and Elon Musk stated Tesla will release its upgraded Roadster in 2025 after a prolonged delay. By 2027, electric vehicle sales might exceed 40% of global car sales, notwithstanding the recent dip.
Volkswagen is working with Chinese companies to speed up its operations. The China business head reported that it takes nearly four years for the company to launch a new product, compared to only 2.5 years for local manufacturers.
Ford and Nissan are currently exporting automobiles from their China facilities. China overtook Japan as the leading auto exporter in 2023.
China-made autos are raising concerns. China may pose national security dangers; therefore the Biden administration announced it would probe foreign car technologies. China’s EV companies are under the European Union’s anti-subsidy investigation.
Chinese automakers are copying Tesla’s concepts, such as software updates to improve automobile functionality. BYD is now the number one electric vehicle seller, surpassing Tesla.
Some industry insiders claim Chinese carmakers prioritise development over safety and quality, while legacy carmakers maintain a strong safety and quality system.
Everything At Once
Executives said Chinese carmakers are parallelising many development phases for software-driven smart EVs. Traditional gas-powered car manufacture was linear—from design to engineering to manufacturing—and each stage had to be completed and confirmed.
Chinese EV businesses employ simulation tools to build virtual prototypes and test faster. Zeekr and NIO officials claimed virtual parts and mock-ups may be shared across teams and 3D-printed prototypes speed up trial-and-error.
Zeekr Vice President Zhu Ling claimed that assisted driving and powertrain control software may be developed without hardware elements.
CEO Joe Xia claimed Geely and Baidu’s JiYue EV brand can design products in six months. He brings sales, marketing, manufacturing, product development, and software professionals to the design studio almost weekly. He claimed everyone can understand design feature changes and make suitable changes.
German and Japanese carmakers have well-defined norms and guidelines for every step in automobile manufacture and development, but these are impediments to moving swiftly, said Christoph Weber, China general manager for Swiss simulation software maker AutoForm.
Make Now, Update Later
EV company NIO, formerly called China’s Tesla Killer, has modified its market readiness standards. It calls its releases “minimum viable products.” They have better chips, cameras, and sensors than their software can support. Engineers build technology and give drivers over-the-air upgrades to leverage underused capabilities.
In June 2022, NIO’s ES7 SUV had four Nvidia Orin chips, but only three were used. The fourth chip was enabled in 2023 to enhance computing performance, displaying a traffic light signal with a real-time countdown on the car screen. The automobile now alerts when traffic signals turn green. The next NIO update will let the car start or stop based on traffic signals.
“If the minimum viable product will allow us to take the lead over other competitors, that’s attractive enough for our users,” Zhou added.
NIO is producing new models despite mounting losses and laying off 10% of its personnel in late 2023.
Fast Suppliers
Global carmakers often scrutinise new suppliers thoroughly, industry executives say. Chinese companies will include suppliers early in car development to reduce delays.
BYD has reduced Japanese mould supplier delivery time to six months from at least a year since buying the company more than a decade ago. Involving supplier expertise to assist in moulding early in development helped BYD determine its design.
When creating the Zeekr X, a luxury hatchback crossover with an in-car fridge to keep drinks chilled, Zeekr initially sourced the appliance from a recognised manufacturer. But Zhu said the supplier’s bid was too expensive and delivery would be slow. A smaller outdoor fridge maker was delivered in a year instead of two, so the corporation chose them.
“In the age of EVs, the market condition is totally different whether your car is launched six months earlier or later,” Zhu added.
Universal Fit
Chinese automakers are standardising models to save time. They standardise everything from critical software to digital vehicle operating systems, which executives call smart car nerve centres.
Last year, EV company XPeng announced SEPA2.0, which unifies the operating system, driver-assistance software, and battery pack design for all vehicles. XPeng claims a 20% reduction in R&D time.
Volkswagen and Toyota have struggled with car software and hardware compatibility.
According to co-president Brian Gu, XPeng develops software in-house with vehicle hardware, which allows for its strategy. Global automakers usually outsource software development. Volkswagen acquired XPeng in 2023 to collaborate on car development and technologies.
Start-Up Spirit
Some Chinese electric vehicle firms are more like start-ups than automakers. Fewer employees report working greater hours. Industry analysts say executives are more prepared to overrule traditional processes to launch new products faster, even if it makes it tougher to hedge risks and costs when things go wrong.
Munich and China-based NIO automotive designers present the next model. CEO William Li has weekly design meetings with identical clay mock-ups in both nations and decides the final design for all future models.
This is different from many Western carmakers, where design alternatives are submitted via several departments for assessment, a longer process, said NIO’s design leader Kris Tomasson, who worked with Ford and BMW.