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Chinese brands, unfazed by lower subsidies, prep more EVs
Yang Jian | 2019/4/5

SHANGHAI -- Beijing is set to wind down a subsidy program for electric vehicles and plug-in hybrids by the end of 2020 after cutting the incentives by more than 50 percent last week. 

Yet, there are no signs that the EV craze created by Chinese brands has been affected, judging by what they will display this month at the Shanghai auto show.

BAIC Motor Co. delivered more than 158,000 EVs in 2018. The state-owned automaker, seeking to solidify its position as China¡¯s largest EV manufacturer, will launch an electric crossover and an electric SUV under its BAIC brand at the show. 

In addition, BAIC will display the ECF concept crossover it unveiled last month under its Arcfox premium EV brand at the Geneva auto show. The company expects to start selling the production Arcfox ECF in the second half of 2020. 

BYD, China¡¯s largest electrified vehicle maker based on sales of EVs and plug-in hybrids, won¡¯t let BAIC steal the limelight in Shanghai. 

BYD, partly owned by U.S. billionaire Warren Buffett, will introduce a compact crossover SA2, which will offer gasoline, plug-in hybrid and battery-electric versions. 

It will also kick off sales of the e1 subcompact electric car at the show. The e1, developed on BYD¡¯s new EV platform, was unveiled in March in Beijing. As small as it is, the e1 has four doors, five seats and a range of 305 kilometers (190 miles). 

What is even more impressive about the e1 is its low price. It will be sold starting at 60,000 yuan ($8,942) and up to 80,000 yuan after government subsidies, estimated at around 18,000 yuan.

BYD expects the competitively priced e1 to help it gain market share in China¡¯s small and medium-sized cities.

Geely Automobile Holdings, the largest domestic Chinese carmaker, has only two electric models -- a compact sedan and a compact crossover.  But the company is on track to quickly expand its EV lineup.

Geely will unveil a separate brand for its EV lineup next week and launch the first product, a sporty compact sedan, at the Shanghai show. 

Dozens of EV startups have emerged across China in the past few years. Many of them launched sales of their first products in the second half of 2018.

Many of the startups will roll out second products this month in Shanghai.

For example, Xpeng Motors will unveil the concept of a midsize electric sporty sedan. The production model will go on sale before year end. Xpeng launched sales of its first product, a compact crossover, in December.

Leap Motor will introduce an SUV, which has a range of more than 500 km and offers Level 3 autonomous driving. The vehicle, the company¡¯s second product, will go on sale at the end of 2020. Leap Motor¡¯s first product, a compact crossover, hit the domestic market in January.

By contrast, global automakers have been slow to introduce EVs to China.

To date, only a small number, General Motors, Nissan Motor Co. and Hyundai Motor Co., have launched EVs. 

Volkswagen, the largest automotive brand in China, won¡¯t start selling its first batch of EVs -- the battery-powered Golf, Bora and Lavida compact cars -- until the middle of this year. 

Last year, EV sales in China jumped 62 percent to roughly 984,000 and the volume was nearly all generated by domestic brands. 

To be sure, the generous subsidies the Chinese government has doled out in the past several years have enticed domestic automakers to invest heavily in EVs. 

But that alone does not explain why they have demonstrated such tremendous enthusiasm about EVs. 

When it comes to EV development, Chinese brands also have a powerful motive that their foreign rivals do not have. 

Sensing that they have little chance to beat global brands in the conventional vehicle market, domestic automakers believe EVs offer them a rare opportunity to establish competitive strength.  

This belief is motivating them to keep up EV development and output even though government subsidies are falling. 

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