Nio, a Chinese electric car company that competes with Tesla, employs 11,000 people in research and development, but sells a mere 8000 cars per month.
On Wednesday, European politicians worried by a wave of Chinese exports formally launched an investigation into whether electric car manufacturers in China have received government subsidies, a step that could lead Europe to impose tariffs. China’s EV exports have surged 851 per cent in the past three years, mainly to Europe. The inquiry by the European Union is geopolitically complicated: Many of Europe’s most important companies have ties to China’s market, and China is ready to retaliate.
Wages also tend to be lower in China. Autoworkers in big cities like Shanghai earn about $US30,000 a year in pay and benefits, while workers in less expensive cities in the interior earn considerably less. Paul Gong, head of Asia automotive research for the bank UBS, predicted that Chinese carmakers would capture a third of the global car market by the end of the decade. Much of the growth in his forecast is a jump in Chinese carmakers’ share of the European market to 20 per cent, from just 3 per cent now.
Volkswagen announced in April that it would build a $US1.1 billion car development centre in the central China city of Hefei. VW will hire 2000 engineers to do work previously performed at its headquarters in Wolfsburg, Germany, for cars manufactured in China. The global market can expect far more exports from BYD: The company recently ordered, from Chinese shipyards, its own fleet of the largest transoceanic car-carrying ships ever built.