WHY CHINA'S ELECTRIC VEHICLES ARE KEEPING GERMANY AND DETROIT UP AT NIGHT
This past week on 𝗖𝗼𝗺𝗺𝗲𝗿𝗰𝗲 𝗕𝗲𝘆𝗼𝗻𝗱 𝗕𝗼𝗿𝗱𝗲𝗿𝘀, Renee Hartmann and I had the pleasure of speaking Tu Le about how China’s EV players are disrupting the global auto industry.
China’s advancements in the EV industry are posing nightmares for legacy players in Detroit, Germany and Japan!
So, we were thrilled to speak with Tu Le, Founder of Sino Auto Insights. Tu is a global thought leader on auto and mobility, with a particular focus on the electric vehicle space, and China’s impact on the industry.
Tu has an incredibly unique combination of experiences that have included working with Ford, Apple, Logitech …having lived and worked in Detroit, Silicon Valley and China.
𝗪𝗲 𝗰𝗼𝘃𝗲𝗿𝗲𝗱 𝗮 𝗹𝗼𝘁 𝗼𝗳 𝗴𝗿𝗼𝘂𝗻𝗱 𝗶𝗻 𝘁𝗵𝗶𝘀 𝗱𝗶𝘀𝗰𝘂𝘀𝘀𝗶𝗼𝗻;
- Tu provided a great background on the rise of China’s auto industry
- We highlighted some of the key advantages that China’s NEVs hold now
- Looked ahead to what the future of auto holds
𝗙𝗿𝗼𝗺 𝗮 𝗺𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴/𝗯𝗿𝗮𝗻𝗱𝗶𝗻𝗴 𝗣𝗢𝗩 𝗜 𝘄𝗮𝘀 𝗱𝗿𝗮𝘄𝗻 𝘁𝗼 𝗮 𝗰𝗼𝘂𝗽𝗹𝗲 𝗼𝗳 𝗸𝗲𝘆 𝗽𝗼𝗶𝗻𝘁𝘀:
𝟭. 𝗕𝗿𝗮𝗻𝗱 𝗹𝗼𝘆𝗮𝗹𝘁𝘆/𝗹𝗲𝗴𝗮𝗰𝘆 𝗮𝗿𝗲 𝗳𝗮𝗶𝗹𝗶𝗻𝗴 𝗶𝗻 𝘁𝗵𝗲 𝗳𝗮𝗰𝗲 𝗼𝗳 𝗯𝗲𝘁𝘁𝗲𝗿 𝗳𝗲𝗮𝘁𝘂𝗿𝗲𝘀 𝗮𝗻𝗱 𝗯𝗲𝘁𝘁𝗲𝗿 𝘃𝗮𝗹𝘂𝗲
In China’s hyper-competitive home market, the most capable brands add features (value) to offset race-to-the-bottom pricing pressures. I used to call this approach the “Xiaomi Model” where (in past competition with Apple), the brand had products which were 85% the quality of Apple but priced at 1/3rd the price.
In the auto industry in 2025, a “BYD model” might be more like offering 150% of the features at 1/3 the pricing.
Global auto consumers are looking for new, better priced alternatives. And, when those alternatives - offered by BYD and others - come with more features, better prices, considerations about brand are likely to be put on the back burner.
𝟮. 𝗠𝘂𝗰𝗵 𝗹𝗶𝗸𝗲 𝗧𝗲𝘀𝗹𝗮, 𝘁𝗵𝗲 𝗖𝗵𝗶𝗻𝗲𝘀𝗲 𝗘𝗩𝘀 𝗳𝗮𝘃𝗼𝗿 𝗮 𝗗𝗶𝗿𝗲𝗰𝘁-𝘁𝗼-𝗖𝗼𝗻𝘀𝘂𝗺𝗲𝗿 (𝗗𝗧𝗖) 𝗮𝗽𝗽𝗿𝗼𝗮𝗰𝗵
This brings up questions about sales and customer service success.
On one-hand a DTC approach allows the brand to control the story and service offering …BUT …can the Chinese brands step-up with building brand, trust, service and support?
In other categories globally, Chinese brands have fallen short in these areas. Even the companies with high-quality products have underestimated these challenges ...hurting the long-term prospects for success.
🚀 Listen to the full episode on Commerce Beyond Borders. Available on Apple Podcasts & Spotify.
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