Baidu, Xiaomi, Huawei, OPPO, Evergrande and other Chinese companies have recently announced their commitment to doing electric vehicle research and development. These companies are not car makers: Xiaomi, Huawei and OPPO are phone makers; Baidu, which has already invested in driverless vehicles, is in Internet-related services; and Evergrande started out as a real estate developer.
At the Shanghai Auto Show in April, while Tesla was under the spotlight because of a consumer dispute, the electric cars that local automakers presented and also the aforementioned companies attracted a lot of attention.
As Chinese financial media and Radio Free Asia reported, Evergrande launched nine new electric car models at the Shanghai Auto Show using the brand name “Hengchi.” Evergrande boasted that they were developed in cooperation with car manufacturers such as Swedish supercar producer Koenigsegg. The nine models that Evergrand launched were later found to be “model cars” which had only a shell and no brakes or suspension system. For this reason, Evergrande sent an army of security personnel to guard the stage and wouldn’t allow the audience to take pictures of the chassis of the display cars.
It was widely believed that China’s manufacturing sector still has great difficult in achieving self-sufficiency in the area of critical parts and components, as well as in the core technologies such as auto chips. Making a car is a much more complex business than making a smartphone. The “great-leap-forward” model of investing in electric vehicles cannot last long.
Some argue that China’s domestic demand has not yet recovered, and that it is a question whether most people can afford an electric vehicle. One cannot rule out the possibility that some companies and local governments are making the initial investment in order to solicit financial subsidies from the central government.
Source: Central News Agency, May 2, 2021