The downright titanic shift in the car market has a lot to do with batteries, which account for a large part of the added value of electric cars. While Germany is well positioned in the gasoline-powered engine market, China dominates the battery market. This is also due to the fact that they are a globally shippable supplier part and not as integral to car production as the combustion engine.
This is where economic mechanisms kick in that favor concentration on a small number of suppliers. Those who produce in bulk can offer lower prices and, at the same time, invest more in new technology, which in turn allows them to sell even more.
It is no wonder that the Chinese global battery market leader CATL has the best prospects of further strengthening its position. Experts believe it will even compete with Bosch, although the German company is more diversified, analyzes Christian Domke-Seidel. The age of Chinese automotive suppliers is dawning.
Since Friday, a paper from the Chinese government has been making the rounds that initially electrified observers of international climate action: For the first time, China wants to set a hard ceiling for greenhouse gas emissions. Previously, the targets were only ever set in relation to economic growth. Under no circumstances should they slow down the economy. So, the introduction of an absolute upper limit is considered exemplary in principle.
But in fact, the new regulation again only sets soft caps on greenhouse gas emissions, writes Nico Beckert. This is because it only takes effect after the officially planned emissions peak in 2030, although it will actually occur earlier. This makes the supposedly hard cap unambitious.
On a global scale, the automotive supplier industry is doing extremely well. The 100 largest suppliers generated a total turnover of 1,135 billion euros in 2023. That is a new record and an increase of 6.9 percent compared to the previous year. And this is despite the fact that global car sales are still below pre-Covid levels. Japan (21.8 percent market share) and Germany (20.7 percent) dominate the supplier market. However, Chinese companies are rapidly catching up.
This is mainly because batteries account for a significant proportion of the added value of electric cars. This means that the Chinese battery specialist CATL could replace the German industry leader Bosch as the world’s largest supplier as early as 2030.
When the management consultancy Berylls began analyzing the 100 largest suppliers 13 years ago, there was only one Chinese company on the list, Weichai Power. Today, it is nine. This is despite the fact that the hurdles to being included in this list have become ever higher.
A company currently needs an annual revenue of around 3.5 billion euros to be included. While the market share of Chinese companies was 5.2 percent in 2019, it is now already 9.1 percent. This was a gain that came at the expense of Japanese and German companies, which lost 4.9 and 1.7 percentage points, respectively, in the same period.
China’s class leader is CATL. The battery manufacturer has boosted its revenue by 540 percent since 2019 and currently ranks seventh in the ranking of the 100 largest suppliers and rising. Berylls expects Chinese suppliers to become increasingly important through acquisitions. Advantages in wage and energy costs will also have an ever greater impact. That is one reason why more and more German suppliers such as ZF Friedrichshafen and Continental are focusing their de-risking strategy on increasing investments in China.
These investments are also important because the preferences of Chinese customers have come to shape development, with suppliers having to react accordingly. In a panel discussion on the supplier study, Willy Wang, Associate Partner at Berylls, explains: “The innovation cycle is very fast. European OEMs have a time-to-market of two years – that is the current status. If you look at the car features of Chinese manufacturers, we are talking about six months.”
He cites the 900-volt on-board network and the 500-kW charging capacity as concrete examples. Xpeng introduced both in 2022. It is now standard equipment in every car. In parallel, car prices are constantly decreasing despite better technology.
Why this is so fast, Wang explains, is because they do not have to face a changing market: “There can be no transformation because Chinese suppliers are not established per se. They are young and have emerged in a dynamic market. They are adaptive per se. There is no transformation in the traditional sense.”
The situation is different for European manufacturers. They have built up a certain market position over decades – with predetermined functionalities and dependencies. “Now the whole game is in disarray and suppliers have to ask themselves where they are in the value creation constellation,” says Peter Eltze, Partner at Berylls, summarizing the situation. Suppliers must therefore abandon the classic development model, in which they are merely assistants to car manufacturers.
However, although the market is dynamic, they still have time for two reasons. Firstly, it was primarily classic combustion engines that have fueled the growth of the industry in recent years. As Juergen Simon, Associate Partner at Berylls, analyzed in a panel discussion on the study: “Globally, the growth rates for e-mobility have declined significantly. There is still growth, it is moving toward e-mobility, but it is subdued growth.” And secondly, German suppliers are in a strong position, as the ranking has proven for the past 13 years.
However, suppliers cannot make the mistake of misinterpreting the term “transformation.” Juergen Simon sees the true transformation not in the switch from combustion engines to electric cars, but in increasing connectivity. In the future, it will no longer be a matter of how big the engine is, but how good the software is – and how quickly innovations in this area can be implemented.
China intends to establish a hard cap on emissions to regulate greenhouse gas output. Late last week, the State Council presented a “work program” outlining stricter emissions control starting in 2030. The current method, which controls emissions relative to economic growth, will be replaced by “absolute emission control.”
Analyst Yan Qin states that the State Council is ushering in “a new era in China’s climate policy.” However, even the highest administrative body of the People’s Republic has not provided specifics on key climate metrics: How much further emissions can rise and when exactly they will peak. While China is taking its climate commitments seriously, “it is still in an ‘underpromising’ mode,” says Yao Zhe from Greenpeace East Asia. Nevertheless, the new work program has significant implications for companies and China’s provinces.
China’s new plan for controlling CO2 emissions represents a gradual evolution of its climate policy. Previously, China’s climate policy was guided by two main targets: The level of CO2 emissions relative to economic growth and the level of energy consumption relative to economic growth.
Specifically, to achieve the same economic growth as in 2020, CO2 emissions should be reduced by 18 percent and energy consumption by 13.5 percent by 2025. However, if the economy grows rapidly, absolute CO2 emissions can continue to rise, as they have in recent years.
The new work program outlines:
Yao Zhe from Greenpeace East Asia criticizes the unambitious timeline of the new “work program.” “The timeline here indicates policymakers still only aim to peak emissions by 2030, despite the clear likelihood that emissions will already peak much sooner.” Announcing a reset ambition to peak early would boost China’s climate reputation, according to the Greenpeace East Asia policy analyst.
Despite the title promising acceleration, “it does not accelerate the process compared to previous plans,” criticizes Lauri Myllyvirta, Senior Fellow at the think tank Asia Society. The plan also “lacks clarity on whether and when emission targets will extend from the energy sector’s CO2 emissions to other sectors like cement production and other greenhouse gases.”
Within China, however, the plan is seen as a sign that climate policy “is back at the top of the agenda,” Myllyvirta told Table.Briefings. But “one essential bit that is missing is an unambiguous statement that the carbon intensity target for 2026-30 will be fully aligned with China’s international commitment to reduce CO2 intensity under the Paris Agreement.” Given that China is severely behind the CO2 intensity commitment after the surge in emissions in 2021-23, requiring a fairly demanding target for the 2026-30 period to make up the shortfall, Myllyvirta says.
According to Qi Qin from the think tank Centre for Research on Energy and Clean Air (CREA), “The introduction of the work plan raises expectations that China will consider carbon emissions as a crucial factor in its economic development over the next five years.” Although some details still need to be finalized, the work program shows some developments that China’s provinces, companies and regulators must prepare for:
The work program outlines the path for China’s climate policy and could bring the issue back to Beijing’s agenda. As analysts confirmed to Table. Briefings that more details on implementation are expected in the coming months.
Cambodia began construction of a controversial canal on Monday. The 180-kilometer-long Funan-Techo Canal will connect the capital, Phnom Penh, with the province of Kep on the southern coast of Cambodia and provide access to the Gulf of Thailand. The project will cost 1.7 billion US dollars. Cambodia hopes that the 100-meter-wide and 5.4-meter-deep canal will reduce the cost of transporting goods to the country’s only deep-sea port, Sihanoukville, and reduce its dependence on Vietnamese ports.
The project is controversial, however. Apart from environmental concerns – especially with regard to the Mekong – China’s involvement has been met with particular criticism. Since China partly finances the project, critics see it as Beijing’s attempt to drive a wedge in relations between Cambodia and Vietnam.
The South China Morning Post reported about concerns over whether Beijing could use the canal to strengthen its influence over Cambodia, or even use it to expand its military presence in Southeast Asia. According to Zhou Chao of the Beijing think tank Anbound, “Funan Techo could help China expand its economic and geopolitical influence in Cambodia and even across Southeast Asia.”
Around one-third of goods shipped to Cambodia must first pass through Vietnamese ports. The canal aims to reduce this figure and make the flow of goods to Cambodia more independent. The canal is expected to be completed by 2028. rad
Zheng Qinwen 郑钦文 became the first Chinese woman to win Olympic gold in tennis singles. As surprising as this tournament victory was, the 21-year-old earned it. Zheng put an end to Angelique Kerber’s career in the quarter-finals. In the semi-finals, she knocked out the top favorite Iga Świątek before the crowning glory followed in the final: 6:2 and 6:3 against Croatia’s Donna Vekić. All of this came as a surprise. Zheng has only won three small tournaments so far.
She was correspondingly proud after the final: “This tournament, I broke through my limits, so in the future, it doesn’t matter how down I am, I’ll always remember this moment and it will cheer me up.”
Zheng Qinwen was born in 2002 in Shiyan, Hubei province. She started playing tennis at the age of seven. And this immediately came with hardships, as Zheng was sent to the tennis academy in Wuhan – almost 400 kilometers away from home.
It couldn’t have been easy for Zheng to leave home at such a young age, but she does not harbor any resentment towards her parents. On the contrary, “They support me and have sacrificed a lot for my career. I am infinitely grateful for that,” Zheng said in an interview with Chinese media. I think I cannot do it without them because they really make some important decisions for me in my tennis career.”
Even though China already has an incredible 21 gold medals in the medals table (as of Monday afternoon), Zheng’s success is still exceptional. Chinese tennis had suffered a severe setback due to the case of Peng Shuai. In November 2021, the top Chinese player accused former government member Zhang Gaoli of sexual assault. However, as a member of the Politburo Standing Committee, Zhang was part of the Communist Party’s inner circle of power until 2017. Peng’s accusations on Weibo were quickly deleted. She vanished from the public eye for a long time – before giving an interview in which she distanced herself from the allegations she had made.
With her youthful charm and successes, Zheng is once again creating a much more positive image. Zheng reminds many Chinese of Li Na, who was the first Asian woman ever to win a Grand Slam tournament in 2011. Back then, around 116 million Chinese people were glued to their TV sets and rooted for Li Na – one of them was the then-8-year-old Zheng. “I think that she put a little seed in my heart that I also want to do it. I want to try to be like her, you know, and even better,” Zheng said in an interview this year.
Zheng Qinwen has been playing tennis professionally since 2018. In 2022, she made it into the top 100 best players for the first time. Her final breakthrough came in 2023 with tournament victories in Palermo and Zhengzhou. She made it to a Grand Slam quarter-final for the first time at the US Open. Zheng has been in the top 10 since that year and even reached the final of a Grand Slam tournament for the first time at the Australian Open – although she clearly lost by two sets.
Now, she has achieved her greatest success to date – at the Olympics, of all places. After all, as a young child, she had dreamed of winning a medal for her country. “Maybe not gold,” she once said. Just a medal.” Well, it turned out to be gold, after all.
An episode with Spanish star player Rafael Nadal demonstrates her modest and reserved demeanor. In 2022, Zheng had somewhat established herself as a professional player and was at the Australian Open in Melbourne. On one of the training courts, Zheng spotted Rafael Nadal, one of her idols.
She would have loved to take a photo with Nadal, but Zheng didn’t dare. “I saw one practice of him and wow, he’s amazing. I don’t have the courage to ask for a picture. I don’t want to disturb him.” Her resolution: “I really want the signature and the picture but maybe when I get better,” Zheng said to herself at the time. It’s high time to finally ask for that picture.
And then there was the apparent announcement of her surprise success: the prophetic commercial of her outfitter, Nike. Shortly before the Olympic Games in Paris, the US sporting goods manufacturer released a video in which Zheng said, “Should I look happy when I’m not? Should I smile when I lose? If I don’t hate being second, how will I ever be first?” No one can say that Zheng didn’t predict it.
Who needs a Summer Olympics in Paris? Records are also being set in the indoor ice park in Nantong. And although a world record has yet to be broken, it still seems to be a lot of fun.
The downright titanic shift in the car market has a lot to do with batteries, which account for a large part of the added value of electric cars. While Germany is well positioned in the gasoline-powered engine market, China dominates the battery market. This is also due to the fact that they are a globally shippable supplier part and not as integral to car production as the combustion engine.
This is where economic mechanisms kick in that favor concentration on a small number of suppliers. Those who produce in bulk can offer lower prices and, at the same time, invest more in new technology, which in turn allows them to sell even more.
It is no wonder that the Chinese global battery market leader CATL has the best prospects of further strengthening its position. Experts believe it will even compete with Bosch, although the German company is more diversified, analyzes Christian Domke-Seidel. The age of Chinese automotive suppliers is dawning.
Since Friday, a paper from the Chinese government has been making the rounds that initially electrified observers of international climate action: For the first time, China wants to set a hard ceiling for greenhouse gas emissions. Previously, the targets were only ever set in relation to economic growth. Under no circumstances should they slow down the economy. So, the introduction of an absolute upper limit is considered exemplary in principle.
But in fact, the new regulation again only sets soft caps on greenhouse gas emissions, writes Nico Beckert. This is because it only takes effect after the officially planned emissions peak in 2030, although it will actually occur earlier. This makes the supposedly hard cap unambitious.
On a global scale, the automotive supplier industry is doing extremely well. The 100 largest suppliers generated a total turnover of 1,135 billion euros in 2023. That is a new record and an increase of 6.9 percent compared to the previous year. And this is despite the fact that global car sales are still below pre-Covid levels. Japan (21.8 percent market share) and Germany (20.7 percent) dominate the supplier market. However, Chinese companies are rapidly catching up.
This is mainly because batteries account for a significant proportion of the added value of electric cars. This means that the Chinese battery specialist CATL could replace the German industry leader Bosch as the world’s largest supplier as early as 2030.
When the management consultancy Berylls began analyzing the 100 largest suppliers 13 years ago, there was only one Chinese company on the list, Weichai Power. Today, it is nine. This is despite the fact that the hurdles to being included in this list have become ever higher.
A company currently needs an annual revenue of around 3.5 billion euros to be included. While the market share of Chinese companies was 5.2 percent in 2019, it is now already 9.1 percent. This was a gain that came at the expense of Japanese and German companies, which lost 4.9 and 1.7 percentage points, respectively, in the same period.
China’s class leader is CATL. The battery manufacturer has boosted its revenue by 540 percent since 2019 and currently ranks seventh in the ranking of the 100 largest suppliers and rising. Berylls expects Chinese suppliers to become increasingly important through acquisitions. Advantages in wage and energy costs will also have an ever greater impact. That is one reason why more and more German suppliers such as ZF Friedrichshafen and Continental are focusing their de-risking strategy on increasing investments in China.
These investments are also important because the preferences of Chinese customers have come to shape development, with suppliers having to react accordingly. In a panel discussion on the supplier study, Willy Wang, Associate Partner at Berylls, explains: “The innovation cycle is very fast. European OEMs have a time-to-market of two years – that is the current status. If you look at the car features of Chinese manufacturers, we are talking about six months.”
He cites the 900-volt on-board network and the 500-kW charging capacity as concrete examples. Xpeng introduced both in 2022. It is now standard equipment in every car. In parallel, car prices are constantly decreasing despite better technology.
Why this is so fast, Wang explains, is because they do not have to face a changing market: “There can be no transformation because Chinese suppliers are not established per se. They are young and have emerged in a dynamic market. They are adaptive per se. There is no transformation in the traditional sense.”
The situation is different for European manufacturers. They have built up a certain market position over decades – with predetermined functionalities and dependencies. “Now the whole game is in disarray and suppliers have to ask themselves where they are in the value creation constellation,” says Peter Eltze, Partner at Berylls, summarizing the situation. Suppliers must therefore abandon the classic development model, in which they are merely assistants to car manufacturers.
However, although the market is dynamic, they still have time for two reasons. Firstly, it was primarily classic combustion engines that have fueled the growth of the industry in recent years. As Juergen Simon, Associate Partner at Berylls, analyzed in a panel discussion on the study: “Globally, the growth rates for e-mobility have declined significantly. There is still growth, it is moving toward e-mobility, but it is subdued growth.” And secondly, German suppliers are in a strong position, as the ranking has proven for the past 13 years.
However, suppliers cannot make the mistake of misinterpreting the term “transformation.” Juergen Simon sees the true transformation not in the switch from combustion engines to electric cars, but in increasing connectivity. In the future, it will no longer be a matter of how big the engine is, but how good the software is – and how quickly innovations in this area can be implemented.
China intends to establish a hard cap on emissions to regulate greenhouse gas output. Late last week, the State Council presented a “work program” outlining stricter emissions control starting in 2030. The current method, which controls emissions relative to economic growth, will be replaced by “absolute emission control.”
Analyst Yan Qin states that the State Council is ushering in “a new era in China’s climate policy.” However, even the highest administrative body of the People’s Republic has not provided specifics on key climate metrics: How much further emissions can rise and when exactly they will peak. While China is taking its climate commitments seriously, “it is still in an ‘underpromising’ mode,” says Yao Zhe from Greenpeace East Asia. Nevertheless, the new work program has significant implications for companies and China’s provinces.
China’s new plan for controlling CO2 emissions represents a gradual evolution of its climate policy. Previously, China’s climate policy was guided by two main targets: The level of CO2 emissions relative to economic growth and the level of energy consumption relative to economic growth.
Specifically, to achieve the same economic growth as in 2020, CO2 emissions should be reduced by 18 percent and energy consumption by 13.5 percent by 2025. However, if the economy grows rapidly, absolute CO2 emissions can continue to rise, as they have in recent years.
The new work program outlines:
Yao Zhe from Greenpeace East Asia criticizes the unambitious timeline of the new “work program.” “The timeline here indicates policymakers still only aim to peak emissions by 2030, despite the clear likelihood that emissions will already peak much sooner.” Announcing a reset ambition to peak early would boost China’s climate reputation, according to the Greenpeace East Asia policy analyst.
Despite the title promising acceleration, “it does not accelerate the process compared to previous plans,” criticizes Lauri Myllyvirta, Senior Fellow at the think tank Asia Society. The plan also “lacks clarity on whether and when emission targets will extend from the energy sector’s CO2 emissions to other sectors like cement production and other greenhouse gases.”
Within China, however, the plan is seen as a sign that climate policy “is back at the top of the agenda,” Myllyvirta told Table.Briefings. But “one essential bit that is missing is an unambiguous statement that the carbon intensity target for 2026-30 will be fully aligned with China’s international commitment to reduce CO2 intensity under the Paris Agreement.” Given that China is severely behind the CO2 intensity commitment after the surge in emissions in 2021-23, requiring a fairly demanding target for the 2026-30 period to make up the shortfall, Myllyvirta says.
According to Qi Qin from the think tank Centre for Research on Energy and Clean Air (CREA), “The introduction of the work plan raises expectations that China will consider carbon emissions as a crucial factor in its economic development over the next five years.” Although some details still need to be finalized, the work program shows some developments that China’s provinces, companies and regulators must prepare for:
The work program outlines the path for China’s climate policy and could bring the issue back to Beijing’s agenda. As analysts confirmed to Table. Briefings that more details on implementation are expected in the coming months.
Cambodia began construction of a controversial canal on Monday. The 180-kilometer-long Funan-Techo Canal will connect the capital, Phnom Penh, with the province of Kep on the southern coast of Cambodia and provide access to the Gulf of Thailand. The project will cost 1.7 billion US dollars. Cambodia hopes that the 100-meter-wide and 5.4-meter-deep canal will reduce the cost of transporting goods to the country’s only deep-sea port, Sihanoukville, and reduce its dependence on Vietnamese ports.
The project is controversial, however. Apart from environmental concerns – especially with regard to the Mekong – China’s involvement has been met with particular criticism. Since China partly finances the project, critics see it as Beijing’s attempt to drive a wedge in relations between Cambodia and Vietnam.
The South China Morning Post reported about concerns over whether Beijing could use the canal to strengthen its influence over Cambodia, or even use it to expand its military presence in Southeast Asia. According to Zhou Chao of the Beijing think tank Anbound, “Funan Techo could help China expand its economic and geopolitical influence in Cambodia and even across Southeast Asia.”
Around one-third of goods shipped to Cambodia must first pass through Vietnamese ports. The canal aims to reduce this figure and make the flow of goods to Cambodia more independent. The canal is expected to be completed by 2028. rad
Zheng Qinwen 郑钦文 became the first Chinese woman to win Olympic gold in tennis singles. As surprising as this tournament victory was, the 21-year-old earned it. Zheng put an end to Angelique Kerber’s career in the quarter-finals. In the semi-finals, she knocked out the top favorite Iga Świątek before the crowning glory followed in the final: 6:2 and 6:3 against Croatia’s Donna Vekić. All of this came as a surprise. Zheng has only won three small tournaments so far.
She was correspondingly proud after the final: “This tournament, I broke through my limits, so in the future, it doesn’t matter how down I am, I’ll always remember this moment and it will cheer me up.”
Zheng Qinwen was born in 2002 in Shiyan, Hubei province. She started playing tennis at the age of seven. And this immediately came with hardships, as Zheng was sent to the tennis academy in Wuhan – almost 400 kilometers away from home.
It couldn’t have been easy for Zheng to leave home at such a young age, but she does not harbor any resentment towards her parents. On the contrary, “They support me and have sacrificed a lot for my career. I am infinitely grateful for that,” Zheng said in an interview with Chinese media. I think I cannot do it without them because they really make some important decisions for me in my tennis career.”
Even though China already has an incredible 21 gold medals in the medals table (as of Monday afternoon), Zheng’s success is still exceptional. Chinese tennis had suffered a severe setback due to the case of Peng Shuai. In November 2021, the top Chinese player accused former government member Zhang Gaoli of sexual assault. However, as a member of the Politburo Standing Committee, Zhang was part of the Communist Party’s inner circle of power until 2017. Peng’s accusations on Weibo were quickly deleted. She vanished from the public eye for a long time – before giving an interview in which she distanced herself from the allegations she had made.
With her youthful charm and successes, Zheng is once again creating a much more positive image. Zheng reminds many Chinese of Li Na, who was the first Asian woman ever to win a Grand Slam tournament in 2011. Back then, around 116 million Chinese people were glued to their TV sets and rooted for Li Na – one of them was the then-8-year-old Zheng. “I think that she put a little seed in my heart that I also want to do it. I want to try to be like her, you know, and even better,” Zheng said in an interview this year.
Zheng Qinwen has been playing tennis professionally since 2018. In 2022, she made it into the top 100 best players for the first time. Her final breakthrough came in 2023 with tournament victories in Palermo and Zhengzhou. She made it to a Grand Slam quarter-final for the first time at the US Open. Zheng has been in the top 10 since that year and even reached the final of a Grand Slam tournament for the first time at the Australian Open – although she clearly lost by two sets.
Now, she has achieved her greatest success to date – at the Olympics, of all places. After all, as a young child, she had dreamed of winning a medal for her country. “Maybe not gold,” she once said. Just a medal.” Well, it turned out to be gold, after all.
An episode with Spanish star player Rafael Nadal demonstrates her modest and reserved demeanor. In 2022, Zheng had somewhat established herself as a professional player and was at the Australian Open in Melbourne. On one of the training courts, Zheng spotted Rafael Nadal, one of her idols.
She would have loved to take a photo with Nadal, but Zheng didn’t dare. “I saw one practice of him and wow, he’s amazing. I don’t have the courage to ask for a picture. I don’t want to disturb him.” Her resolution: “I really want the signature and the picture but maybe when I get better,” Zheng said to herself at the time. It’s high time to finally ask for that picture.
And then there was the apparent announcement of her surprise success: the prophetic commercial of her outfitter, Nike. Shortly before the Olympic Games in Paris, the US sporting goods manufacturer released a video in which Zheng said, “Should I look happy when I’m not? Should I smile when I lose? If I don’t hate being second, how will I ever be first?” No one can say that Zheng didn’t predict it.
Who needs a Summer Olympics in Paris? Records are also being set in the indoor ice park in Nantong. And although a world record has yet to be broken, it still seems to be a lot of fun.
