ELECTRIC CARS: US vs. CHINAOctober 22nd, 2020 by Socially Powerful
First, Tesla woke up the EV market… but has it lost control?
Electric Cars are more than fashionable. They are dominating the stock market and the auto industry. Though sustainability was perceived as a trend to most industries, the car industry has invested more than enough into EVs for it to be merely a fashion statement. But as things heat up, we decided to hone into the topic: Is the Electric Car hub in the US or China?
Now, this isn’t the first time the two countries have been polled against each other – and given the current state of geopolitics, it definitely won’t be the last. However, much of the electric car dialogue is not centred around sales or growth in the mass market but stocks, IPOs, offerings, share prices and investors. This makes it difficult to understand the electric car market from a supply and demand perspective, as we are too focused on the uncanny valley of it all.
- Tesla has topped the social media leaderboard for a consecutive four months
- In the past two months, Tesla’s voice of mention has increased by 50%
Without a doubt, Tesla is an extremely fashionable and attractive company that causes a lot of debate on social media. 2020 has been a big year for the company, they announced in August that they will split their stocks, that for the year of 2020 their vehicle deliveries should exceed 500,000 (which isn’t looking likely), all while remaining the largest short in US stock market history.
However, Tesla has already accomplished a lot in providing opportunities for electric cars worldwide. So whether their stock shares continue to surge or fall, or you continue to love or hate it, it’s safe to say that Tesla is already a household name in the industry – and on social media.
The share price of Tesla may be changing, as the company split their stocks this August alongside Apple. However, the Tesla brand ethos is not. Despite any criticism, Tesla has changed the entire image of the electric car industry. Yet despite being the most talked about on social media, the US is losing market share in the EV market. In places like Germany, where EV sales skyrocketed 65%, Tesla’s sales fell from 6,816 in 2019 through to July, to 5,306 over the same period in 2020. Its share in the EV market plunged from 18.4% to 8.7%. This has positioned the Chinese and European markets to blow past the US, as Volkswagen, Renault and Hyundai quickly filled the increased demand in Germany.
If Tesla has accomplished anything for certain, it’s that it woke up the rest of the world – and it woke up China. For Tesla to compete with the Chinese EV market, it’s going to have to reevaluate their price, service, reliability, supply and demand – elements that attract real customers, not fans.
HOW CHINA IS DRIVING THE COMPETITION
- NIO has seen a 61% increase on social media mentions, which surpasses the rise of Tesla talk online.
- NIO’s stock has delivered major returns to investors.
- Tesla’s market share in China’s EV market is 13% this year (down 1% from 2019). VW is a more distant 4th place, with a 6% market share.
EVs in China were first perceived as copycats of the Western World’s automotive models. But when it comes to electric vehicles, China has proved that its technology has the potential to overtake the West’s EV reputation. Porsche has recently entered the Chinese market as well, with the Taycan.
- In 2019, there were 2.58 million battery electric vehicles in China, compared to just 0.97 million in Europe, and 0.88 million in the USA, according to the International Energy Agency.
- China has 82% of the global fast charger installations
- China is the largest EV market (roughly 50% of all global EV sales)
China also surpasses any other country’s lead on charging stations. Both the US and Europe were forced to adapt to the CCS standard, which offers a wider opportunity for other auto companies to compete with Tesla on EV charging capabilities. The government in China meanwhile is moving forward with wireless charging.
When it comes to sentiment, NIO seems to be mentioned with more positive connotations than Tesla. This is because NIO’s stock has been popular amongst investors, as it is more stable than Tesla’s.
Another Chinese EV company, Xpeng has caused lots of online discussion because of its P7 model, which essentially is an affordable Tesla Model 3. (Priced at $36,000).
Since the electric car market is becoming a mass market, this means that the most important selling point to consumers isn’t the look and feel, but if it’s reliable or not. They want to know that their cars will last and get them from point A to point B quickly. They want to know that it won’t cost them an arm or a leg to change a part.
For so long, it’s felt like Tesla has had no competition, especially in the Chinese market. Now, it’s not just the technology that’s competing with Tesla, but the price. This is similar to the 70s/80s, when Japanese cars stormed the automotive market, at a much lower price.
China is also the world’s largest producer of lithium. To compare this, the US contributes just 2% of the world lithium supply, and (in 2019) China over 60%. Lithium (lithium-ion battery) is a component element in most EV battery technology.
If the current EV landscape was purely based on supply and demand, value for cost and free markets – Chinese EVs would surely dominate the market. However, the geopolitical climate we are living in will leave little room for China in the US, UK and European EV market. Protectionism takes priority, thanks to the Trade Wars and Economic devastation from the pandemic.
So, the flood of Chinese EVs in the world market is sure to come, but slowly. So while Tesla reaches its Tipping Point, it’s important to take note of the one place Chinese EVs are visible; social media and online forums. Social media is the perfect tool to use in your favour when it comes to being one step ahead of what’s to come for the world of EVs.
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