- Well-known electric startups face extinction
- Charm offensive and claws: Qin Gang, new ambassador to the US
- Calls for investigations of war crimes in Afghanistan
- Meituan under new scrutiny
- Delta variant hampers economy
- Budapest: Referendum on Fudan campus approved
- Profile: Björn Jerdén
- Executive Moves: New head for UBS Asia Pacific capital markets business
The current mood among the Chinese service sector is a grim one. One would certainly like to shout at them to pull themselves together! A few Covid measures that go against your interests are nothing compared to really bad days some Chinese EV start-ups are experiencing!
Indeed, growth is the only thing on the mind of many people when they talk about green mobility in the People’s Republic. But when it comes to the development of electric vehicles, high profits are by no means a given, as Christiane Kühl describes in detail in today’s China.Table.
Speaking of bad days, China’s regulatory-driven tech companies will soon have to brace themselves for more governmental control. President Xi Jinping himself believes his country is on the right track with its strict controls. Eyes at delivery service Meituan surely must be rolling by now out of sheer frustration. The company is about to face new trouble.
Additionally, we have a preliminary summary of the performance of China’s new ambassador to the US. From tame to belligerent, Qin Gang has already ticked off every category in the diplomatic handbook – after just a few weeks. But the Chinese representative is far from the degree of autonomy that ambassadors of democratic states are sometimes granted by their governments.
I hope you enjoy our latest issue!
Marcel Grzanna
Feature
Despite electric boom: several start-ups on the brink of extinction
Electric cars are booming in China. Not even the semiconductor crisis has put a damper on sales so far. In July, 271,000 electric cars were sold, which is 164 percent more than in the same month last year. Nevertheless, the industry is now facing mass extinction: a handful of start-ups are about to meet their demise, while others are drifting towards an unknown fate. Byton, Faraday Future and ICONIQ all set out with great ambitions, even bringing experienced Western car managers and designers to the fold. But breakthrough remained out of reach.
According to an estimate by the Swiss bank UBS, one in four new cars in China will be powered by batteries as early as 2025. But between start-up euphoria and huge profits in the growing market stand horrendous costs. Last year, Nio founder William Li stated that a start-up would need at least 20 billion yuan (about 2.6 billion euros) in funding before it could get a first model ready for production. Byton burned 8.4 billion yuan, according to Chinese media reports, but only produced around 200 units of its M-Byte smart E-SUV, despite praise by industry insiders. Now, the company is facing its end – at least in its current form.
Cui Dongshu, secretary-general of China Passenger Car Association (CPCA), believes electric companies need to better manage their expenses. “It is important to cut costs and fine-tune the complete manufacturing system,” he said, according to the South China Morning Post. “Companies need to be skilled in adjusting their supply chains to compete in the fast-changing Chinese market.”
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