The fact that Xinjiang is the focus of human rights violations does not seem to be an obstacle to business with the western Chinese region. The latest foreign trade figures show impressive growth in exports. But that’s not all: Beijing has big plans for Xinjiang, as Marcel Grzanna reports. The region is intended to become a free trade zone, enhancing the New Silk Road and becoming a crucial hub.
Volkswagen seems to be struggling in China. Volkswagen’s premium brand, Audi, sold only 11,000 cars in the first half of the year in the People’s Republic, and the software subsidiary Cariad is a flop. The carmaker is now taking a different approach. A radical and company-wide restart in technology aims to address the problems in China and worldwide: an entirely new e-platform. Christian Domke Seidel takes a closer look at the technical endeavor.
Today’s Heads is about Hui Zhang, Europe Chief of Nio, who studied German literature. From his office in Munich, he aims to conquer Germany’s car market. Julia Fiedler introduces you to Hui Zhang’s career.
For many years, Xinjiang has been the scene of state-sponsored tragedies. Despite a dismal human rights record and evidence of systematic forced labor, trade between the northwest Chinese region and the outside world is flourishing more than ever. Despite the West’s response with sanctions and new legislation, trade between Xinjiang and the world is increasing significantly.
It is already clear: 2023 is an excellent year for the regional economy of Xinjiang. During the first ten months, the volume of imports and exports increased by more than 40 percent compared to the previous year. The end of the coronavirus measures in December of the previous year may be a contributing factor to this growth. However, 409 billion dollars from January to October alone represent a record that also surpasses pre-coronavirus trade volumes. The customs office in the regional capital Urumqi registered goods worth 48 billion dollars in October alone.
The Supply Chain Act in Germany or the Uyghur Forced Labor Prevention Act (UFLPA) in the United States are intended to put local companies in Xinjiang under pressure to ensure that their value chains meet ethical standards. However, cross-border trade with Central Asian countries such as Kazakhstan, Kyrgyzstan or Tajikistan seems to compensate for the revenue lost due to laws and restrictions in the West, as reported by the economic portal Nikkei Asia. The effectiveness of the sanctions is diminishing significantly.
According to the report, since its introduction 17 months ago, the UFLPA has prevented the import of goods worth around two billion dollars from Xinjiang into the US. The law initially has a validity of eight years to give exporters of goods from the region at least some perspective. Currently, they are required to prove that their products are free from forced labor.
However, supply chains are becoming increasingly complex, branching out and harder to decipher. This significantly complicates exporters’ efforts to fulfill their duty. However, increasing complexity also benefits a system that wants to obscure the background of value creation.
The Chinese government already denies any form of forced labor or human rights abuses in Xinjiang, as condemned by the UN High Commissioner in Geneva. Instead, Beijing is pushing forward the economic integration of the region by establishing free trade zones. At the end of October, the State Council announced plans to transform Xinjiang into a large free trade zone, greatly enhancing China’s Belt and Road Initiative (BRI).
The pilot project is expected to include parts of Urumqi as well as Kashgar on the Karakoram Highway towards Pakistan in the west and Khorgos on the Kazakh border, covering an area of 180 square kilometers. The goal is to create a free trade zone that connects numerous economies of neighboring countries, including Kazakhstan, Tajikistan, Pakistan, Mongolia and Russia.
China is enticing with an “open industrial system that leverages local advantages” and the improvement of financial services. Logistics should also be optimized. Logistic centers should be set up for trade between Asia and Europe. China also hopes for a deepened exchange with neighboring countries and the creation of an environment in which the region develops skilled workers for its own needs.
Increasing exports to Europe are expected from there. The World Bank recently assessed the potential of the Middle Corridor, the trans-Caspian logistics route that bypasses Russia, very optimistically: By 2030, the volume of goods on the route could triple, reaching eleven million tons.
The precursors of the zone are already in place. Free trade is already possible in the Kashgar region, where the corresponding zone was opened on November 12. And the district-free city of Khorgos has already had a 24-hour freight handling port since August. Construction and operations in the free trade zone are managed by the Xinjiang Production and Construction Corps.
The organization performs administrative tasks in the region. Its administration also takes over government tasks such as healthcare or education. Due to its involvement in state transfer programs of Uyghur workers, the United States and the European Union have imposed sanctions on the organization.
The establishment of the zone, consciously or unconsciously, acts as a dig at the US and Europe. But this is at best an ironic side effect that Beijing may be willing to accept. The increasingly deep integration of many neighboring countries into the New Silk Road is likely to pay off politically.
Especially since China is advocating for trade in the free trade zone to be settled in the local currency Renminbi. This would marginalize the US dollar to some extent in the region – a declared goal of the Chinese government to push back US economic and political influence with the dollar.
A radical and company-wide restart in technology is expected to address Volkswagen’s problems in China and worldwide: an entirely new electric platform. “This is a huge step for us because, for the first time, we can build purely electric vehicles from the B to the upper C and D segments on it,” says a spokesperson for the Audi brand. The new platform is expected to be more technologically advanced and, above all, enable more digital connectivity than its predecessors.
A platform is the foundation for the development and production of a car. Various models can be cost-effectively assembled from the same parts on the platform. The wheelbase is the same, and so is the battery’s location. Additionally, there is a wide selection of drives. This modular approach allows SUVs to be produced just as easily as sedans.
This development and production method has been the basis for the long-standing success of major automotive groups. It allows engineers to develop a car but split it into a large number of models. However, it was precisely because of this that VW was not flexible enough to offer its Chinese customers state-of-the-art technology.
Audi is currently facing an issue in China with its existing platform. Volkswagen’s Modular Electric Drive Kit (MEB) is not up to date in terms of software. The components of the kit do not allow the level of connectivity necessary to produce the rolling electronic products that Chinese customers expect from a car. VW is now even partnering with Chinese providers to benefit from their expertise.
The success of this maneuver is crucial. In the current de-risking discussion, the vehicle industry is rightly in the spotlight, particularly VW with its high business share in China. The risks of market dependence are evident in declining sales. In the first ten months of 2023, the VW Group sold around 2.6 million vehicles in its largest market.
As a result, 2023 is expected to be the worst year since 2012 (2.82 million units) and the fifth consecutive year of declining sales in the People’s Republic. The Wolfsburg-based company has lost ground, especially in the booming electric segment.
Audi is experiencing a particularly dramatic downward trend. The Bavarian premium brand is facing sales issues, especially with its EVs. The brand sold only 11,000 units in the first half of 2023 in China, representing a market share of 0.5 percent.
For a long time, high margins for combustion engines concealed the problems. Years ago, the Group responded to the weak sales of EVs by founding its own software subsidiary called Cariad. However, this caused numerous breakdowns and billions in losses.
VW’s suffering in China is particularly painful because the company was so successful until recently, thanks to its clever platform strategy. One example of a celebrated platform is that of the VW Golf, which also underlies the Audi A3. Both models come in various versions, including hybrid and electric drives, and body styles.
However, the same platform is also the basis for the Audi Q3 and the VW Tiguan – smaller SUVs. Additionally, vehicles from the Seat and Skoda brands are based on this platform. With a single platform, the company could produce several successful models for each brand without repeating central development steps.
The significance of the new platform for the VW Group cannot be overstated. It marks the beginning of an attempt to catch up in the field of electromobility. By 2027, the company plans to invest 180 billion euros, with two-thirds of that going into electrification and digitization. Customers will notice this in a product offensive. By the end of 2025, Audi alone will launch twenty new models. From 2027, the premium brand will no longer introduce new combustion engines, as their sales will be discontinued in 2033.
But the platform strategy of VW, its implementation, and the managers’ mindset were based on the era of the gasoline engine until recently. Since then, things have changed: The rules of the game have changed with the electric drive. VW had more difficulty adapting than younger challengers from China. “Cars with combustion engines have been around for 100 years – the development steps are smaller. With EVs, featuring a completely new platform, the steps are much larger,” explains the Audi spokesperson.
While VW could rest on a platform for many years in the past, today, it has to deliver much faster because much more is changing. The battery is a key point here. “Fundamental decisions are still being made in electromobility. For example, we have agreed on a uniform battery cell to develop scalable battery technology,” the Audi spokesperson says.
In electromobility, platforms used so extensively are both a curse and a blessing. A curse because critical fundamental decisions take time. In recent years, the VW Group has also been busy forming battery alliances and securing capacities. A hasty decision on the electric platform would have led to problems in battery development.
A blessing because a finished platform developed exclusively for EVs ensures enormous production advantages. These are technical developments that, at least in this respect, will bring the VW Group back on par with the competition from China. Also, in terms of pricing. Only with a pure electric platform can the company scale development and production and save costs needed for competitive prices.
The success of an electric car depends on the software. For the customer, it may seem that development is slow, and the integration of desired apps and features is not possible. Here, too, the new electric platform is expected to make a breakthrough. “It’s primarily about connectivity,” says the Audi spokesperson. “The customer notices it in terms of comfort and the possibilities the vehicle offers.” All “contact points” in the vehicle and all control units must be connected in such a way that the functions can be linked, explains Schuster.
In other words, all parts must communicate with each other in real-time in EVs. If a driving assistant brakes in a critical situation, the seatbelt tightens, hazard lights come on and the steering wheel vibrates. All these components must communicate with each other in real-time. This also applies to the windshield washer tank. If it is too empty for an upcoming trip to clean the sensors, the system must know and pass this information on to the driver’s phone, where the route is planned.
This software must not only work in China but also in Europe and the USA. And not just at Audi but at ten brands from five European countries under the VW umbrella.
In the first nine months of 2023, there was hardly any new construction of coal-fired power plants worldwide – except in China, where the construction boom that began in 2022 continued. According to research by the Global Energy Monitor organization, outside of China, construction projects for new coal-fired power plants with a capacity of less than 2 gigawatts were started in only three other countries in the current year. This is well below the average of 16 gigawatts over the last eight years. However, in China, over 37 gigawatts of new coal capacity were started in the last nine months, which is well above the average of recent years.
Outside of China, there are currently 67 gigawatts under construction, some of which started construction before 2023. However, overall, fewer new coal-fired power plants are being permitted or planned outside of China, as long-term data from the Global Energy Monitor shows. The International Energy Agency (IEA) predicts a declining coal consumption for the coming years. nib
Hui Zhang, the Europe head of Nio, has a big goal: From his office in Munich, he wants to conquer Germany’s garages. Not an easy task for a largely unknown EV brand from China, considering that Germany, the land of cars, is known for being a particularly challenging market. Moreover, customers are expected to be convinced of a new charging method: through battery swap stations. Can it succeed?
One of the biggest challenges for car manufacturers entering a new market is to understand the target audience with all its needs. At Nio, Hui Zhang, a genuine Germany expert, is at the helm. The native Beijinger studied German studies at the prestigious Peking University. He speaks fluent German and has lived for years in cities like Heidenheim, Pforzheim, Munich and Bochum. He is familiar with the Bundesliga, has visited numerous cultural monuments from the Zeche Zollverein to the Krupp Villa in his free time, likes Lake Tegernsee, and is a fan of Bertolt Brecht’s poetry.
However, Hui Zhang chose German studies as a major not out of love for literature. In the booming China of 1991, foreign language skills were considered to be genuine hard skills. Germany was very present in the People’s Republic at that time – the German reunification had just taken place, and the economic success impressed Hui Zhang and his parents, who were employees of a steel company. Therefore, German studies and a law minor were a strategic choice; he had always had his goal clearly in mind even back then, says Hui Zhang.
After his first job at Cosco in China, he pursued an MBA program in Germany, going to Pforzheim and later to Utah for a semester. Hui Zhang wrote his thesis at Webasto, the automotive supplier in Stockdorf near Munich, where he developed a procurement strategy. It was a tough time for the Chinese student. In Munich, he had significant problems finding an affordable shared flat and had to manage his savings carefully. In 2002, the job market in Germany was tough, and Hui Zhang wrote countless unsuccessful job applications. When he finally found a job, it was not in a big city like Munich but in the tiny Heidenheim. It was at Voith AG.
In the traditional corporation, Hui Zhang was responsible for Asian procurement. A few years later, he moved to the automotive supplier Kiekert, which seconded him to Shanghai. Positions at Lotus and Leoni AG followed. Hui Zhang’s career was going well when, in 2015, two of his old classmates from Peking University contacted him.
William Li and Lihong Qin, founders of Nio, were looking for someone with the required skills to build up the European business. The company was a young start-up, but the opportunity sounded attractive to Hui Zhang. A role as a leader in Germany appealed to him, and he found EVs fascinating. Moreover, Nio had chosen Munich as its location – for Hui Zhang, Germany’s most beautiful city.
Nio was the first Chinese automotive company with a design center in Germany, Hui Zhang explains. It was opened in 2015. Although Turin was more popular among the Chinese for its location, crucial suppliers and talents for the automotive industry were concentrated in the Munich area – critical location factors. Moreover, employees are drawn to a livable city like Munich, even for a young company like Nio, says Hui Zhang. For the young company, recruiting talents who could just as well work for brands like Mercedes or BMW was one of the biggest challenges.
In Munich, all vehicles of the Nio brand are designed. The team is diverse, and the location aims to create an international design that appeals to German and European customers. Conversely, the international design is also a selling point in China, says Hui Zhang. It is a unique feature compared to other Chinese manufacturers.
Hui Zhang’s task in Munich is to lead the Nio organization. The focus is on localizing all business functions, such as research and development, new business, public affairs and communication. In short, he is supposed to move Nio forward.
Sales operate differently than with traditional car brands in Germany. The contact point with customers is not traditional car dealerships but Nio Houses and Spaces. In addition to cars, these spaces feature cafes, lounges, co-working spaces and, of course, vehicles for test sitting and driving. Currently, there are 14 Nio Houses and Spaces in Europe, with four in Germany. However, Hui Zhang is looking for additional strategies to sell vehicles. For example, by entering into collaborations with companies to include Nio in their company car fleets. The network of battery swap stations is also expected to expand – currently, there are only seven in Germany.
Hui Zhang lives in Munich; he calls the city his second home after Beijing. In Munich, he is well-connected and actively continues to build networks. Occasionally, he lectures at universities, and for a while now, he has been a member of the German automotive supplier Boge Rubber & Plastics supervisory board. Hui Zhang is also the deputy chairman of the Chinese Chamber of Commerce in Germany and has founded an automotive committee there, of which he is the spokesperson.
In recent years, a cluster of Chinese companies has formed in Munich. In the automotive committee, automotive suppliers and OEMs come together, including Great Wall, SAIC and others. They are not as systematic as the VDA, Hui Zhang says, but they exchange experiences. Hui Zhang also aims to pull together. Initially, they must jointly convince customers of smart EVs to achieve better market penetration, he says. All manufacturers would benefit from this. There is still plenty of time for competition between the brands. Julia Fiedler
At the dance training center in Handan, in the northern Chinese province of Hebei, a group of young dancers stretches for the camera. Every movement must be precise, and those experiencing pain are, at the very least, not allowed to show it. With this performance, the gymnasts are preparing to apply for the dance major at the country’s art colleges soon.
In China.Table #722 dated Nov. 29, 2023, we mistakenly referred to the Taiwanese presidential candidate Hou Yu-ih as the mayor of Taipei. He is the mayor of the neighboring New Taipei.
The fact that Xinjiang is the focus of human rights violations does not seem to be an obstacle to business with the western Chinese region. The latest foreign trade figures show impressive growth in exports. But that’s not all: Beijing has big plans for Xinjiang, as Marcel Grzanna reports. The region is intended to become a free trade zone, enhancing the New Silk Road and becoming a crucial hub.
Volkswagen seems to be struggling in China. Volkswagen’s premium brand, Audi, sold only 11,000 cars in the first half of the year in the People’s Republic, and the software subsidiary Cariad is a flop. The carmaker is now taking a different approach. A radical and company-wide restart in technology aims to address the problems in China and worldwide: an entirely new e-platform. Christian Domke Seidel takes a closer look at the technical endeavor.
Today’s Heads is about Hui Zhang, Europe Chief of Nio, who studied German literature. From his office in Munich, he aims to conquer Germany’s car market. Julia Fiedler introduces you to Hui Zhang’s career.
For many years, Xinjiang has been the scene of state-sponsored tragedies. Despite a dismal human rights record and evidence of systematic forced labor, trade between the northwest Chinese region and the outside world is flourishing more than ever. Despite the West’s response with sanctions and new legislation, trade between Xinjiang and the world is increasing significantly.
It is already clear: 2023 is an excellent year for the regional economy of Xinjiang. During the first ten months, the volume of imports and exports increased by more than 40 percent compared to the previous year. The end of the coronavirus measures in December of the previous year may be a contributing factor to this growth. However, 409 billion dollars from January to October alone represent a record that also surpasses pre-coronavirus trade volumes. The customs office in the regional capital Urumqi registered goods worth 48 billion dollars in October alone.
The Supply Chain Act in Germany or the Uyghur Forced Labor Prevention Act (UFLPA) in the United States are intended to put local companies in Xinjiang under pressure to ensure that their value chains meet ethical standards. However, cross-border trade with Central Asian countries such as Kazakhstan, Kyrgyzstan or Tajikistan seems to compensate for the revenue lost due to laws and restrictions in the West, as reported by the economic portal Nikkei Asia. The effectiveness of the sanctions is diminishing significantly.
According to the report, since its introduction 17 months ago, the UFLPA has prevented the import of goods worth around two billion dollars from Xinjiang into the US. The law initially has a validity of eight years to give exporters of goods from the region at least some perspective. Currently, they are required to prove that their products are free from forced labor.
However, supply chains are becoming increasingly complex, branching out and harder to decipher. This significantly complicates exporters’ efforts to fulfill their duty. However, increasing complexity also benefits a system that wants to obscure the background of value creation.
The Chinese government already denies any form of forced labor or human rights abuses in Xinjiang, as condemned by the UN High Commissioner in Geneva. Instead, Beijing is pushing forward the economic integration of the region by establishing free trade zones. At the end of October, the State Council announced plans to transform Xinjiang into a large free trade zone, greatly enhancing China’s Belt and Road Initiative (BRI).
The pilot project is expected to include parts of Urumqi as well as Kashgar on the Karakoram Highway towards Pakistan in the west and Khorgos on the Kazakh border, covering an area of 180 square kilometers. The goal is to create a free trade zone that connects numerous economies of neighboring countries, including Kazakhstan, Tajikistan, Pakistan, Mongolia and Russia.
China is enticing with an “open industrial system that leverages local advantages” and the improvement of financial services. Logistics should also be optimized. Logistic centers should be set up for trade between Asia and Europe. China also hopes for a deepened exchange with neighboring countries and the creation of an environment in which the region develops skilled workers for its own needs.
Increasing exports to Europe are expected from there. The World Bank recently assessed the potential of the Middle Corridor, the trans-Caspian logistics route that bypasses Russia, very optimistically: By 2030, the volume of goods on the route could triple, reaching eleven million tons.
The precursors of the zone are already in place. Free trade is already possible in the Kashgar region, where the corresponding zone was opened on November 12. And the district-free city of Khorgos has already had a 24-hour freight handling port since August. Construction and operations in the free trade zone are managed by the Xinjiang Production and Construction Corps.
The organization performs administrative tasks in the region. Its administration also takes over government tasks such as healthcare or education. Due to its involvement in state transfer programs of Uyghur workers, the United States and the European Union have imposed sanctions on the organization.
The establishment of the zone, consciously or unconsciously, acts as a dig at the US and Europe. But this is at best an ironic side effect that Beijing may be willing to accept. The increasingly deep integration of many neighboring countries into the New Silk Road is likely to pay off politically.
Especially since China is advocating for trade in the free trade zone to be settled in the local currency Renminbi. This would marginalize the US dollar to some extent in the region – a declared goal of the Chinese government to push back US economic and political influence with the dollar.
A radical and company-wide restart in technology is expected to address Volkswagen’s problems in China and worldwide: an entirely new electric platform. “This is a huge step for us because, for the first time, we can build purely electric vehicles from the B to the upper C and D segments on it,” says a spokesperson for the Audi brand. The new platform is expected to be more technologically advanced and, above all, enable more digital connectivity than its predecessors.
A platform is the foundation for the development and production of a car. Various models can be cost-effectively assembled from the same parts on the platform. The wheelbase is the same, and so is the battery’s location. Additionally, there is a wide selection of drives. This modular approach allows SUVs to be produced just as easily as sedans.
This development and production method has been the basis for the long-standing success of major automotive groups. It allows engineers to develop a car but split it into a large number of models. However, it was precisely because of this that VW was not flexible enough to offer its Chinese customers state-of-the-art technology.
Audi is currently facing an issue in China with its existing platform. Volkswagen’s Modular Electric Drive Kit (MEB) is not up to date in terms of software. The components of the kit do not allow the level of connectivity necessary to produce the rolling electronic products that Chinese customers expect from a car. VW is now even partnering with Chinese providers to benefit from their expertise.
The success of this maneuver is crucial. In the current de-risking discussion, the vehicle industry is rightly in the spotlight, particularly VW with its high business share in China. The risks of market dependence are evident in declining sales. In the first ten months of 2023, the VW Group sold around 2.6 million vehicles in its largest market.
As a result, 2023 is expected to be the worst year since 2012 (2.82 million units) and the fifth consecutive year of declining sales in the People’s Republic. The Wolfsburg-based company has lost ground, especially in the booming electric segment.
Audi is experiencing a particularly dramatic downward trend. The Bavarian premium brand is facing sales issues, especially with its EVs. The brand sold only 11,000 units in the first half of 2023 in China, representing a market share of 0.5 percent.
For a long time, high margins for combustion engines concealed the problems. Years ago, the Group responded to the weak sales of EVs by founding its own software subsidiary called Cariad. However, this caused numerous breakdowns and billions in losses.
VW’s suffering in China is particularly painful because the company was so successful until recently, thanks to its clever platform strategy. One example of a celebrated platform is that of the VW Golf, which also underlies the Audi A3. Both models come in various versions, including hybrid and electric drives, and body styles.
However, the same platform is also the basis for the Audi Q3 and the VW Tiguan – smaller SUVs. Additionally, vehicles from the Seat and Skoda brands are based on this platform. With a single platform, the company could produce several successful models for each brand without repeating central development steps.
The significance of the new platform for the VW Group cannot be overstated. It marks the beginning of an attempt to catch up in the field of electromobility. By 2027, the company plans to invest 180 billion euros, with two-thirds of that going into electrification and digitization. Customers will notice this in a product offensive. By the end of 2025, Audi alone will launch twenty new models. From 2027, the premium brand will no longer introduce new combustion engines, as their sales will be discontinued in 2033.
But the platform strategy of VW, its implementation, and the managers’ mindset were based on the era of the gasoline engine until recently. Since then, things have changed: The rules of the game have changed with the electric drive. VW had more difficulty adapting than younger challengers from China. “Cars with combustion engines have been around for 100 years – the development steps are smaller. With EVs, featuring a completely new platform, the steps are much larger,” explains the Audi spokesperson.
While VW could rest on a platform for many years in the past, today, it has to deliver much faster because much more is changing. The battery is a key point here. “Fundamental decisions are still being made in electromobility. For example, we have agreed on a uniform battery cell to develop scalable battery technology,” the Audi spokesperson says.
In electromobility, platforms used so extensively are both a curse and a blessing. A curse because critical fundamental decisions take time. In recent years, the VW Group has also been busy forming battery alliances and securing capacities. A hasty decision on the electric platform would have led to problems in battery development.
A blessing because a finished platform developed exclusively for EVs ensures enormous production advantages. These are technical developments that, at least in this respect, will bring the VW Group back on par with the competition from China. Also, in terms of pricing. Only with a pure electric platform can the company scale development and production and save costs needed for competitive prices.
The success of an electric car depends on the software. For the customer, it may seem that development is slow, and the integration of desired apps and features is not possible. Here, too, the new electric platform is expected to make a breakthrough. “It’s primarily about connectivity,” says the Audi spokesperson. “The customer notices it in terms of comfort and the possibilities the vehicle offers.” All “contact points” in the vehicle and all control units must be connected in such a way that the functions can be linked, explains Schuster.
In other words, all parts must communicate with each other in real-time in EVs. If a driving assistant brakes in a critical situation, the seatbelt tightens, hazard lights come on and the steering wheel vibrates. All these components must communicate with each other in real-time. This also applies to the windshield washer tank. If it is too empty for an upcoming trip to clean the sensors, the system must know and pass this information on to the driver’s phone, where the route is planned.
This software must not only work in China but also in Europe and the USA. And not just at Audi but at ten brands from five European countries under the VW umbrella.
In the first nine months of 2023, there was hardly any new construction of coal-fired power plants worldwide – except in China, where the construction boom that began in 2022 continued. According to research by the Global Energy Monitor organization, outside of China, construction projects for new coal-fired power plants with a capacity of less than 2 gigawatts were started in only three other countries in the current year. This is well below the average of 16 gigawatts over the last eight years. However, in China, over 37 gigawatts of new coal capacity were started in the last nine months, which is well above the average of recent years.
Outside of China, there are currently 67 gigawatts under construction, some of which started construction before 2023. However, overall, fewer new coal-fired power plants are being permitted or planned outside of China, as long-term data from the Global Energy Monitor shows. The International Energy Agency (IEA) predicts a declining coal consumption for the coming years. nib
Hui Zhang, the Europe head of Nio, has a big goal: From his office in Munich, he wants to conquer Germany’s garages. Not an easy task for a largely unknown EV brand from China, considering that Germany, the land of cars, is known for being a particularly challenging market. Moreover, customers are expected to be convinced of a new charging method: through battery swap stations. Can it succeed?
One of the biggest challenges for car manufacturers entering a new market is to understand the target audience with all its needs. At Nio, Hui Zhang, a genuine Germany expert, is at the helm. The native Beijinger studied German studies at the prestigious Peking University. He speaks fluent German and has lived for years in cities like Heidenheim, Pforzheim, Munich and Bochum. He is familiar with the Bundesliga, has visited numerous cultural monuments from the Zeche Zollverein to the Krupp Villa in his free time, likes Lake Tegernsee, and is a fan of Bertolt Brecht’s poetry.
However, Hui Zhang chose German studies as a major not out of love for literature. In the booming China of 1991, foreign language skills were considered to be genuine hard skills. Germany was very present in the People’s Republic at that time – the German reunification had just taken place, and the economic success impressed Hui Zhang and his parents, who were employees of a steel company. Therefore, German studies and a law minor were a strategic choice; he had always had his goal clearly in mind even back then, says Hui Zhang.
After his first job at Cosco in China, he pursued an MBA program in Germany, going to Pforzheim and later to Utah for a semester. Hui Zhang wrote his thesis at Webasto, the automotive supplier in Stockdorf near Munich, where he developed a procurement strategy. It was a tough time for the Chinese student. In Munich, he had significant problems finding an affordable shared flat and had to manage his savings carefully. In 2002, the job market in Germany was tough, and Hui Zhang wrote countless unsuccessful job applications. When he finally found a job, it was not in a big city like Munich but in the tiny Heidenheim. It was at Voith AG.
In the traditional corporation, Hui Zhang was responsible for Asian procurement. A few years later, he moved to the automotive supplier Kiekert, which seconded him to Shanghai. Positions at Lotus and Leoni AG followed. Hui Zhang’s career was going well when, in 2015, two of his old classmates from Peking University contacted him.
William Li and Lihong Qin, founders of Nio, were looking for someone with the required skills to build up the European business. The company was a young start-up, but the opportunity sounded attractive to Hui Zhang. A role as a leader in Germany appealed to him, and he found EVs fascinating. Moreover, Nio had chosen Munich as its location – for Hui Zhang, Germany’s most beautiful city.
Nio was the first Chinese automotive company with a design center in Germany, Hui Zhang explains. It was opened in 2015. Although Turin was more popular among the Chinese for its location, crucial suppliers and talents for the automotive industry were concentrated in the Munich area – critical location factors. Moreover, employees are drawn to a livable city like Munich, even for a young company like Nio, says Hui Zhang. For the young company, recruiting talents who could just as well work for brands like Mercedes or BMW was one of the biggest challenges.
In Munich, all vehicles of the Nio brand are designed. The team is diverse, and the location aims to create an international design that appeals to German and European customers. Conversely, the international design is also a selling point in China, says Hui Zhang. It is a unique feature compared to other Chinese manufacturers.
Hui Zhang’s task in Munich is to lead the Nio organization. The focus is on localizing all business functions, such as research and development, new business, public affairs and communication. In short, he is supposed to move Nio forward.
Sales operate differently than with traditional car brands in Germany. The contact point with customers is not traditional car dealerships but Nio Houses and Spaces. In addition to cars, these spaces feature cafes, lounges, co-working spaces and, of course, vehicles for test sitting and driving. Currently, there are 14 Nio Houses and Spaces in Europe, with four in Germany. However, Hui Zhang is looking for additional strategies to sell vehicles. For example, by entering into collaborations with companies to include Nio in their company car fleets. The network of battery swap stations is also expected to expand – currently, there are only seven in Germany.
Hui Zhang lives in Munich; he calls the city his second home after Beijing. In Munich, he is well-connected and actively continues to build networks. Occasionally, he lectures at universities, and for a while now, he has been a member of the German automotive supplier Boge Rubber & Plastics supervisory board. Hui Zhang is also the deputy chairman of the Chinese Chamber of Commerce in Germany and has founded an automotive committee there, of which he is the spokesperson.
In recent years, a cluster of Chinese companies has formed in Munich. In the automotive committee, automotive suppliers and OEMs come together, including Great Wall, SAIC and others. They are not as systematic as the VDA, Hui Zhang says, but they exchange experiences. Hui Zhang also aims to pull together. Initially, they must jointly convince customers of smart EVs to achieve better market penetration, he says. All manufacturers would benefit from this. There is still plenty of time for competition between the brands. Julia Fiedler
At the dance training center in Handan, in the northern Chinese province of Hebei, a group of young dancers stretches for the camera. Every movement must be precise, and those experiencing pain are, at the very least, not allowed to show it. With this performance, the gymnasts are preparing to apply for the dance major at the country’s art colleges soon.
In China.Table #722 dated Nov. 29, 2023, we mistakenly referred to the Taiwanese presidential candidate Hou Yu-ih as the mayor of Taipei. He is the mayor of the neighboring New Taipei.
