The Chinese Automobile Industry Association is confident that the 50 per cent share of electric vehicles
in new car sales will be ‘easily’ surpassed this year. The competition in China is merciless, as local car
manufacturers have understood how to create innovations in record times, bring products to market and
optimize costs. An electric car in China now costs around half as much as in the western world. Who can
hold their own in this increasingly tough market environment and how are international competitors
reacting to this enormous pressure in the world's largest car market?

Chinese winners in the local market

BYD from Shenzhen is undoubtedly one of the clear winners over the past 12 to 24 months. BYD's
sponsorship of the 2024 European Football Championship in Germany made the company well-known
to many Europeans. The company is taking the automotive world by storm with its affordable electric
vehicles. In the first quarter of 2025, BYD sold almost 700,000 electric and plug-in vehicles in China.
BYD has overtaken Tesla to become number 1 in its home market and has also surpassed the traditional
market leaders for combustion engines.

Geely, which owns brands such as Volvo Cars, Polestar, Zeekr and Lynk & Co, is also one of the rising
stars. NIO’s new Firefly sub-brand will export affordable small electric cars to Europe. It is fair to state
that domestic manufacturers dominate the show floors with bold design and aggressive pricing,
accelerating global competitiveness to local and international market participants. On top it becomes
evident in the halls here in Shanghai that large tech companies are shaking up the market in China.
Xiaomi launched its first electric saloon, an SU7, in 2024, with a clear focus on technology. Smartphone
giant Huawei is also active and supplies its software expertise to at least seven car manufacturers.

How are the international OEMs represented in Shanghai?

International car manufacturers are trying to catch up with the speed that Chinese OEMs have shown in
recent years. They have been overtaken by their former imitators and are beginning to adapt to a market
with faster product cycles than anywhere else in the world. The disappearance of traditional brand
affinity and the more playful, design-oriented interior of the vehicle have taken a lot out of the traditional
carmakers in Europe and the US. Most of the Europeans have realized that only through partnerships
with local players such transformation is possible.

• BMW rolled out the Vision Driving Experience concept while underlining a “China-for-China”
  localisation playbook. Oliver Zipse, Chairman of the Board of Management of BMW AG stated
  that ”in the Neue Klasse ... the user interface is even more intuitive, the design even more
  progressive and the driving experience even more precise and dynamic. By the end of this year,
  we will be putting the mobility of the future on the road". Shorter development cycles paired with
  an understanding of what Chinese drivers want, seems to be the new MUST for international
  OEMs. Sister brand MINI premiered performance-oriented electric vehicles with the MINI Cooper
  JCW EV and the MINI Aceman JCW EV in Shanghai.
• The Mercedes-Benz Vision V show car demonstrates the German car manufacturer’s vision of
  combining a luxurious and elegant chauffeur-driven limousine with unprecedented digital
  experience. The Mercedes Benz CLA was presented as the first vehicle based on the scalable
  Mercedes Benz Modular Architecture (MMA). It is also the first to operate on the new in-house
  developed Mercedes Benz Operating System MB.OS, making it the first software-defined
  vehicle from Mercedes-Benz.
• Volkswagen unveiled three China-specific electric concept cars. “Our ‘In China, for China’
  strategy has put us on the right path. Our aim is to remain the leading international automaker in
  China – even in the age of the intelligent connected vehicle,” says Thomas Schäfer, CEO of the
  Volkswagen brand. That said, Volkswagen focuses on shorter development times, strong local
  partners in China and sophisticated local development.
• Nissan introduced the Frontier Pro PHEV, its first electrified pickup – aimed at urban adventure
  buyers.
• Stellantis backed Chinese partner Leapmotor is highlighting intensifying Sino-global alliances in
  EV distribution.

‍
Software defined vehicles (SDV) - what’s news?

Several large suppliers presented updates to specific functionalities for SDV (Software defined vehicles).
Bosch's Chinese Fusion test vehicle for example highlighted an in-house SoC enabling advanced ADAS
and OTA feature deployment. Generative-AI cockpits turning the vehicle cabin into a digital assistant,
pushing the conversation beyond infotainment to full-vehicle intelligence. ZF and other Tier-Is displayed
domain controllers and autonomous stacks aimed at shortening Chinese OEMs' launch cycles. The
ongoing pride of Chinese innovation and engineering capacity became clear as almost every major
reveal carried a "designed in China, engineered for the world" imprint.

Interesting times ahead and the Chinese market is setting the pace.

‍

Copyright Images: BMW Group and Mercedes-Benz press.

‍