October 28, 2021

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China Is Accelerating Into The EV Future

Across the globe, the auto industry is struggling with the ongoing pandemic and the supply shortage of semiconductors. Meanwhile, the demand for electric cars continues to rise, especially in the world’s largest auto market.

A New Era For Audi

As it pivots towards the electrification era, Volkswagen AG (OTC: VWAGY)-owned Audi unveiled its newest Grandsphere concept car as a “private jet for the road.” When in self-driving mode, the design of the interior of transforms into a “first class lounge” as the design of the steering column “moves” away to even more space for the driver and the passenger on the front seat. Audi plans to solely offer EVs by 2033 after introducing its last gas-powered model in 2026.

The Future Of Audi

The Grandsphere is the second of three vehicles under the same concept. The first has been named Skysphere and it was unveiled last month as a performance roadster. It is a blend of Batmobile-like technologies, aggressive design and luxury amenities. While the two models have some similarities in terms of their exterior, the Grandsphere features a far cleaner and more luxurious interior, which is its main selling point. Head of the brand, Henrik Wenders, emphasized that the value proposition is longer just about driving, but the experience that sophisticated technology provides.

Potentially the most surprising feature is that there are no obvious screens as everything will be communicated via an infotainment system. Even movies. projected onto the vehicle’s wooden panel located under the windshield. This vehicle is not just a concept as it will be on display at the Munich Motor Show next week.

The third concept has been named the Urbansphere and is scheduled for unveiling during the first half of 2022.

Chine Plays An Important Role

At the end of August, the premium brand of Volkswagen group reaffirmed the country’s electric journey when it unveiled its new strategy Vorsprung 2030 under which all new models starting from 2026 will be electric.

Moreover, the company also stated it will end the production of ICE vehicles by 2033. According to the company’s estimates, the premium vehicle market in China will grow to 4.5 million sales annually by the end from the decade, up from 3.1 million in 2020. Moreover, it expects electric vehicles’ share could increase from 10 percent today to as much as 40 percent by 2030.

In China For China

Audi is already producing EVs, including the e-tron SUV, in China. It also established a joint venture in the countrydedicated to EVs based on the PPE platform it previously developed with Porsche, with the first model scheduled to hit the market in 2024.

The number of China-made Audi models, both gasoline and electric, is forecasted to grow to 12 by the end of this year. The German carmaker is also manufacturing Audi vehicles with another Chinese carmaker, SAIC Motor Corporation Limited, with the first model scheduled for launch in 2022.

In China alone, Audi has sold a total of more than 7 million vehicles. Last year, it delivered 727,358 vehicles and during the first half of 2021, it delivered 418, 749 which is 38.6 YoY increase.

BYD Remains Ahead

Warren Buffett-backed BYD Company Limited (OTC: BYDDF) reported its August sales skyrocketed more than 300% as it sold 61,409 battery electric vehicles and plug-in hybrids. This figure equates to more than four times the amount sold in August 2020 and exceeds 50,492 cars sold in July. Upon the news, BYD shares rose 5.5% during the morning trade in Hong Kong.

Although BYD is one of the biggest electric vehicle makers in China, a number of start-ups including Nio Inc (NYSE: NIO), Li Auto Inc (NASDAQ: LI), and Xpeng Inc (NYSE: XPEV) are doing their best to challenge it, although their deliveries for August were below 10,000. It is important to note that this is an ‘apples to oranges’ comparison as BYD reports sales volumes whereas the other three startups reveal delivery numbers, but the figures still help to assess the scale of respective companies.

Although BYD did not provide any comments, it did reveal that profitability is being affected to some extent by rising prices of raw materials and similar factors.

China Is Going Full Speed Ahead To An All-Electric Future

The truth of the matter is that despite the issues hampering the auto industry’s electric transformation and workings, the demand for electric vehicles continues to climb, especially in China where the government is greatly supporting this journey. Based on comments from the vice minster of China’s Ministry of Industry and Information Technology made on Saturday, Reuters expects China is set to have sold 1.7 million new EVs during the first eight months of this year, nearly tripling from 600,000 cars in the same period of 2020.

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