Explore the Automotive Industry in China

From niche to norm

China’s EV sector, once a niche market, has witnessed explosive growth, fuelled by the Made in China 2025 strategy and substantial government subsidies. By 2023, China dominated global NEV sales with a 63.6% share.

As the global EV market matures, the industry faces challenges such as navigating the adoption of S-curve and industry convergence. Companies like BYD and Tesla have managed initial growth phases through vertical integration, but the long-term success of others remains uncertain.

Foreign brands in China must decide whether to forge new paths or continue with JVs in their EV ventures. The emergence of “reverse joint ventures,” like Volkswagen’s investment in XPeng Motors, indicates foreign firms’ growing interest in Chinese EV technology.

Chinese brands, meanwhile, are innovating in response. For example, NIO is building a comprehensive ecosystem beyond automotive manufacturing into smart devices, and Li Auto leads in sales due to its deep understanding of consumer preferences. China’s automotive landscape, with its shift from traditional car manufacturing and JVs to a booming EV sector, reflects the nation’s adaptability and commitment to sustainable growth.

China’s automotive odyssey: From joint ventures to global EV dominance

Elon Musk said Chinese electric car makers will find “significant” success outside of China – and the numbers do not lie. In 2023, with a total output of 30 million vehicles, China achieved the position of having the world’s largest automotive production sector, including global leadership in the manufacture of new energy vehicles (NEVs), producing nearly nine million units during the year – almost two in every three NEVs produced globally.

Back in 1985, China’s population had just breached the one billion barrier. That year, it produced just over 5,000 passenger vehicles. Four decades on, the country can look back on the progressive development of an automotive manufacturing sector that is seen by the government as strategically important – and a key contributor to the national economy.

How has China’s automotive sector made the journey to where it is today? What has driven this focus and dynamic growth and what are its prospects?

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Case Study

Transforming Geely: From fridges to motorcycles to EVs … to?

The case is about the continuous entrepreneurial transformation, over two decades, of a company in terms of increasingly advanced technologies and international product markets. It describes how Geely, a leading player in the global automotive ind…

Case Study

CATL: Global battery supremacy

Contemporary Amperex Technology Co Ltd (CATL) was founded in 1999 under the name ATL. Initially, it had no technology of its own, and the founder, Zeng Yuqun, traveled to the US and acquired a patent for a lithium-ion polymer (LiPo) battery from B…

Can CATL power the future?

Providing it can avoid the perils of geopolitics, Chinese electric vehicle battery maker CATL has all the ingredients necessary to become a world-beating multinational, says IMD Professor of Innovation and Strategy Mark Greeven.

Future Readiness Indicator

In arguably one of the most turbulent industries, carmakers have witnessed the meteoric rise of newer players like BYD and Xpeng as the industry pivots towards new capabilities such as chipset design, battery manufacturing, and software.

Case Study

The automotive industry: Disrupting or being disrupted?

This industry note talks about how the automotive industry has been disrupted over the years, the various factors that triggered these disruptions, the current trend in the industry and the value chains interlinked with the automotive value chain….

News Stories

Tesla fends off hot competition from China to lead auto sector in Future Readiness Indicator

Automotive companies that scale capabilities like chipset design and software were found to be more future ready and therefore likely to keep growing.