The story appears on

Page B4

May 21, 2018

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Benchmark

Startups elbow into electric auto industry

China is not only the world’s largest auto market but it is also the most advanced in the field of electric cars. Small wonder that so many startup companies are hoping to benefit from national policies favoring green cars.

The startups are hoping to gain a foothold by rolling out electric car models with intelligent and connected features inside the vehicles. For them, an electric car is a smart device on wheels.

“This year will be a crucial one for these startups,” said Cui Dongshu, secretary-general of the China Passenger Car Association. “According to plans of these enterprises, a number of new models will be unveiled his year. Some of the companies, such as Shanghai-based NIO and VM Motor Technology Co, have even entered the stage of actual production.”

The startups are raising eyebrows among Chinese consumers and industry insiders alike. They are pioneering new technologies and trying to define what consumers want in a cutting-edge vehicle.

“In the past, most people around me paid attention to traditional car manufacturers during the Beijing Auto Show,” said Cheng Yujia, a friend of mine who studies at the School of Automotive Studies of Tongji University. “But this year, they are discussing Chinese electric startups and are eager to get a look at their vehicles.”

According to Caixin Global, an estimated 20 electric-vehicle startups have been launched since 2014. The first 10 out of the gate reportedly secured investments totaling more than 50 billion yuan (US$7.9 billion).

China began issuing permits allowing non-traditional automakers to manufacture electric cars in 2015. It’s part of a national policy to encourage non-polluting cars and help reduce smog in major cities.

Bolstered by such strong government backing, more startups are appearing. With government subsidies and a rising consumer acceptance of electric vehicles in large cities, it’s considered a promising sector.

After much initial consumer skepticism, sales of electric cars are becoming more robust. In the first four months of this year, China sold 225,310 electric cars, nearly a 150 percent surge from the same period a year ago. That compares with the 4.8 percent growth rate in the overall auto industry.

The country wants to see electric vehicles dominate the roads in the future.

Compared with traditional car manufacturers, electric car startups are often more innovative when it comes to interactive functions between drivers and vehicles, and features such as automated driving and connectivity to the Internet. These technologies are helping make electric cars more attractive to consumers, especially a young generation hooked on everything digital.

Chinese electric car startups NIO and Future Mobility Co are among the companies betting on technology inside the vehicle.

NIO has applied self-driving technology to its electric sport-utility vehicle called the NIO ES8. NIO Pilot, its autonomous driving assistant system, is Internet-connected and equipped with 23 sensors. The system includes a highway pilot, a traffic jam pilot and automatic emergency braking.

Drivers can interact with the vehicle through a voice-activated artificial intelligent assistant named Nomi to broadcast music, close the windows and navigate to a destination.

Last month, Future Mobility Co showcased its smart electric sport-utility vehicle called the Byton Concept. It comes equipped with multiple screens, including a touch screen that replaces the central console in traditional cars. The touch screen automatically adjusts brightness according to changes in light, and it enables content to be shared with other passengers in the car.

Face-recognition cameras allow the driver or passenger to unlock the door. The car also recognizes driver and passenger preferences to auto-adjust seat angles, entertainment options and other information. Autonomous driving features are applied on the model.

Smart features and technology are the trump cards for electric car startups. However, some industry insiders also point to constraints for these firms.

The startups face competition from the traditional carmakers like Volkswagen, Ford and BMW, which are muscling into the electric car space. These auto giants have made new energy vehicles a high priority in their future development plans in China.

“The automobile is a very complicated business, involving all aspects of supply chain, manufacturing, sales and after-sales services,” said Zhang Xiaofeng, an independent market analyst. “For all of those aspects, traditional car manufacturers have certain advantages because they have been in the business for so many years. Electric startups still lack that level of experience.”

Cui said manufacturing electric vehicles involves huge upfront costs.

“The competition is only going to get fiercer in the future,” he said. “Electric car startups will need to accelerate their development pace, and not many of them will be able to survive with a mass production scale of cars.”

For electric car startups, there’s also the challenge of turning what is now consumer curiosity into concrete sales. They need to build brand image and cultivate buyer loyalty.

According to a recent survey by consulting firm J.D. Power, the startups are in a weaker position than traditional automakers.

The survey of 2,710 Chinese consumers found that only 9 percent would consider buying startup brands, while 46 percent said they prefer traditional car brands.

The remainder of the respondents said they would look at both before making any decisions.




 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend