When our colleagues at CGTH.com, China’s national TV channel and its international broadcasting platform, reached out to us to talk about EVs, we jumped on the occasion. What we weren’t expecting was the stellar and classy service getting there.
A Tesla was waiting in front of our doorstep ready to take us to downtown LA for the life TV interview. We were surprised and thought it was done on purpose. After all, we have helped Tesla’s recognition internationally and have certainly indirectly sold a fair number of Model S and Model X electric vehicles globally. But it turned out to be a coincidence. CGTN had contacted EVX Limos, a company we’ve been meaning to cover in good depth — stay tuned for that. EVX showed up with the only type of vehicle it has, electric. Now that was a welcome coincidence.
CGTN Asks CleanTechnica About China’s Car Brand Recognition
The topic was three of China’s state-owned carmakers — FAW Group Corp., Dongfeng Motor Corp., and Changan Automobile Co. — agreeing to work together to tackle four pillars of the modern automotive industry. They will work together on EVs, automated vehicles (aka self-driving cars), manufacturing of cars, and parts. What this means is that the companies will collaborate on innovations in these fields, expand their overseas reach, and beef up their chain operations. All three signed a strategic cooperation framework agreement in the central Chinese city of Wuhan. Let that one sink in because the repercussions and potential are very big and far-reaching.
Hadn’t heard that news? Strangely enough, not too many outlets have picked up on it either. And we are betting that a few carmaker board members are growing gray hair by the minute.
The segment appeared on CGTN’s China 24 and focused on China can establish strong automotive brand recognition abroad. Most of us here know of BYD but perhaps a few less about SF Motors. Perhaps you know about a few other Chinese car companies — how many can you name? Well, the ones above are three of the top ten. By having three of the top ten carmakers in China band together, it seems that their resources will be better used to quickly advance in the EV industry and tackle the international market — at least, that is the rationale.
When China Gets Serious About Business, Pay Attention
In general, China is steadfast and has proven it can implement long-term strategies. Its 2003 “Alternative Energy” automotive program is coming to fruition despite various administrations, something that has a hard time happening in the West. The directions change with every administration. It can be a good thing at times, but as we’re currently experiencing in the US, Net Neutrality is going away and fossil fuels are being given even more advantages against renewable energy for no good reason.
The Chinese strategy implications are huge for many reasons. First, this is a sort of strategic merger of some of the top three state-owned car manufacturers in China. They will be able to pool their resources and strategize better than when just fending for their own. International engineers will be swapped and will add to the shared innovations. In a sense, they are forming a megacorporation out of three giant corporations.
The questions asked of CleanTechnica on the show were: How can these companies work together while developing separately? What are the advantages of having three companies in a highly competitive industry working together? Can they keep their identity or will they create an international brand jointly?
The segment that aired on CGTN’s America channel concentrated on the competition aspect of the merger.
We proposed that three companies working together would increase competition. It would do so at least for the US, where the EV market has established three core pricing clusters — $20,000–30,000, $35,000–50,000, and $70,000+. There isn’t a lot of choice in most markets, especially down at $20,000 and below. A Chinese brand with three companies working in unison could offer a compelling EV in the $20,000 price range. This would mean not only competition for Nissan but the rest of the industry up to the $40,000 mark point.
If the Chinese market and industries are leaving you confused and you live in the US, we suggest you check out the National Committee on U.S.–China Relations for more background.
We know a lot of you are already informed a bit about this market, though, so we’re curious what you think. Can China give the US healthier competition than what it has now? How do you see it happening? How long would it take for a Chinese brand to have enough recognition in the US and abroad to make a dent in the international EV market (not Chinese EV market)? What are the repercussions and potential of these companies coming together for China in the US, given our unstable political scene?
And now, just for fun, if you haven’t already clicked play above, see Nicolas represent CleanTechnica internationally!
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