Page 200 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
them. For example, major cities like Guangzhou Electric Vehicles
restrict pickup trucks from entering the city limits
during the day. In major Chinese cities there are China’s electric vehicle (EV) industry, growing
also restrictions on how many cars a person can fast amid strong take-up of the new technology,
own. Typically, it is one vehicle per person, and will likely face a period of excess capacity in the
you have to win a license plate lottery before even near-term amid a glut of unwanted cars from some
being able to buy one. Therefore, people will be underperforming manufacturers. The industry
less likely to choose a car that they can’t drive all is set for a period of consolidation and closures
the time since they can only have one car. This as the strongest start-ups and conventional
means that, right now, people from second and carmakers up their EV game with new models to
third tier cities and the rural areas are most likely to outdo weaker competitors. The market outlook is
consider pickups because there are less restrictions bright but that is not enough to ensure that every
compared to major first tier cities. However, even player can become a winner. The accelerated pace
with the restrictions, China is starting to see more of electrification on the mainland’s roads has
consumers in 1st tier cities purchasing pickups attracted about 500 companies, investing tens of
anyway. For example, a couple will have one car billions of dollars into developing, designing and
that they can drive within the city (increasingly assembling electric vehicles. China’s EV industry
choosing an electric SUV) and then the truck which faces severe overcapacity in the coming years, as
they can use on weekends to drive out of the city the industry shows signs of overheating. Total EV
into rural areas. As more consumers are choosing deliveries in China, the world’s largest automotive
pickup trucks, the central government is trying to market, hit 1.17 million units in 2020, up 12% year on
boost economy and promote outdoor sports and year. A bullish estimate by Swiss bank UBS recently
domestic tourism while also encouraging certain said that 25% of new passenger car sales on the
cities and local government to ease restrictions on mainland in 2025 would be powered by batteries,
pickup trucks (Zhang). amounting to 6.6 million units. Conventional
carmakers, investment funds, technology
Several Chinese brands have jumped on this behemoths and car component suppliers have
opportunity and are creating trucks designed been splurging on EV projects to tap China’s efforts
for the China market. China's Great Wall Motors to meet carbon neutrality by 2060. Beijing also
unveiled the Black Bullet concept, a radical off-road hopes domestic EV companies can up their game
adventure pickup that looks like China's answer to in core technologies, ranging from batteries to
the Ram 1500 TRX and the Toyota Tacoma TRD Pro autonomous driving systems, to reinforce China’s
(Bigg). Great Wall Motor aims to sell over 300,000 ambitions of becoming a global EV powerhouse.
pickup trucks in 2022. Baoding-based Great Wall, Local governments, including Guangdong and
the top pickup truck maker in China, also aims to Wuhan, have all extended generous incentives
sell over 500,000 of the vehicles a year in 2025, but to leading players to set up production bases,
half of the 2025 sales will be overseas (ETAuto). The creating an industry chain worth billions of dollars.
newly launched Wuling Zhengtu pickup in China The investment craze has triggered worries about
would start at just US$9,033.65 (RMB 58,800) if it redundancies. Carmaking is a capital-intensive
was for sale in the United States. If you need a little industry and billions of yuan may still not turn out
extra space, then the dual-cab model with seating to be sufficient to build a new car plant and brand.
for five would be 9,648.18 (RMB 62,800). Wuling is At least 20 billion RMB (US$3.1 billion) is needed
one of General Motors' brands in China, and the to invest in an EV start-up before it can develop
Zhengtu is its first pickup. The Zhengtu's cargo a production model. Many EV players will not be
bed is especially useful because the sides can fold able to design and develop a single model before
down. This can make loading and unloading easier. they go bust. Even if they can present a new car to
Plus, it could allow for carrying awkwardly shaped the market, it is not certain whether the model will
things that might need to hang over an edge. The be well-received by customers. The country’s EV
Zhengtu is not going to be a heavy hauler because assemblers should better use of the existing supply
power comes from a 1.5-liter engine that makes 99 chain to more effectively manage costs and boost
horsepower (74 kilowatts) (Bruce). profitability. At the end of the day, China does not
200
them. For example, major cities like Guangzhou Electric Vehicles
restrict pickup trucks from entering the city limits
during the day. In major Chinese cities there are China’s electric vehicle (EV) industry, growing
also restrictions on how many cars a person can fast amid strong take-up of the new technology,
own. Typically, it is one vehicle per person, and will likely face a period of excess capacity in the
you have to win a license plate lottery before even near-term amid a glut of unwanted cars from some
being able to buy one. Therefore, people will be underperforming manufacturers. The industry
less likely to choose a car that they can’t drive all is set for a period of consolidation and closures
the time since they can only have one car. This as the strongest start-ups and conventional
means that, right now, people from second and carmakers up their EV game with new models to
third tier cities and the rural areas are most likely to outdo weaker competitors. The market outlook is
consider pickups because there are less restrictions bright but that is not enough to ensure that every
compared to major first tier cities. However, even player can become a winner. The accelerated pace
with the restrictions, China is starting to see more of electrification on the mainland’s roads has
consumers in 1st tier cities purchasing pickups attracted about 500 companies, investing tens of
anyway. For example, a couple will have one car billions of dollars into developing, designing and
that they can drive within the city (increasingly assembling electric vehicles. China’s EV industry
choosing an electric SUV) and then the truck which faces severe overcapacity in the coming years, as
they can use on weekends to drive out of the city the industry shows signs of overheating. Total EV
into rural areas. As more consumers are choosing deliveries in China, the world’s largest automotive
pickup trucks, the central government is trying to market, hit 1.17 million units in 2020, up 12% year on
boost economy and promote outdoor sports and year. A bullish estimate by Swiss bank UBS recently
domestic tourism while also encouraging certain said that 25% of new passenger car sales on the
cities and local government to ease restrictions on mainland in 2025 would be powered by batteries,
pickup trucks (Zhang). amounting to 6.6 million units. Conventional
carmakers, investment funds, technology
Several Chinese brands have jumped on this behemoths and car component suppliers have
opportunity and are creating trucks designed been splurging on EV projects to tap China’s efforts
for the China market. China's Great Wall Motors to meet carbon neutrality by 2060. Beijing also
unveiled the Black Bullet concept, a radical off-road hopes domestic EV companies can up their game
adventure pickup that looks like China's answer to in core technologies, ranging from batteries to
the Ram 1500 TRX and the Toyota Tacoma TRD Pro autonomous driving systems, to reinforce China’s
(Bigg). Great Wall Motor aims to sell over 300,000 ambitions of becoming a global EV powerhouse.
pickup trucks in 2022. Baoding-based Great Wall, Local governments, including Guangdong and
the top pickup truck maker in China, also aims to Wuhan, have all extended generous incentives
sell over 500,000 of the vehicles a year in 2025, but to leading players to set up production bases,
half of the 2025 sales will be overseas (ETAuto). The creating an industry chain worth billions of dollars.
newly launched Wuling Zhengtu pickup in China The investment craze has triggered worries about
would start at just US$9,033.65 (RMB 58,800) if it redundancies. Carmaking is a capital-intensive
was for sale in the United States. If you need a little industry and billions of yuan may still not turn out
extra space, then the dual-cab model with seating to be sufficient to build a new car plant and brand.
for five would be 9,648.18 (RMB 62,800). Wuling is At least 20 billion RMB (US$3.1 billion) is needed
one of General Motors' brands in China, and the to invest in an EV start-up before it can develop
Zhengtu is its first pickup. The Zhengtu's cargo a production model. Many EV players will not be
bed is especially useful because the sides can fold able to design and develop a single model before
down. This can make loading and unloading easier. they go bust. Even if they can present a new car to
Plus, it could allow for carrying awkwardly shaped the market, it is not certain whether the model will
things that might need to hang over an edge. The be well-received by customers. The country’s EV
Zhengtu is not going to be a heavy hauler because assemblers should better use of the existing supply
power comes from a 1.5-liter engine that makes 99 chain to more effectively manage costs and boost
horsepower (74 kilowatts) (Bruce). profitability. At the end of the day, China does not
200
