Beijing – In a bid to outshine each other in China’s burgeoning electric car market, local automakers are showcasing advanced technologies not yet offered by Tesla in the country, often at more competitive prices. The focus has shifted from driving range to a plethora of features, including in-car projectors, refrigerators, and driver-assist capabilities.
Unlike Tesla, which does not include these accessories in its offerings, and provides a limited version of its driver-assist technology in China, local companies are capitalizing on the demand for cutting-edge features in the rapidly evolving electric vehicle landscape.
“Electric vehicles in China have transformed into consumer electronics, akin to the cellphone industry,” remarked Li Yi, Chairman and CEO of Appotronics, a Shenzhen-based laser display company collaborating with major automakers. According to Li, the Chinese market places a premium on entertainment and gadgets, seeking the latest technological specifications.
Appotronics claims credit for the 32-inch projection screen featured in Huawei’s Aito brand’s newly launched M9 SUV. The M9 boasts unique offerings, such as a refrigerator, collapsible front seats, and an augmented reality heads-up display (AR HUD) that projects information onto the road. Priced between 470,000 yuan to 570,000 yuan ($66,320 to $80,430), the M9 has already garnered over 30,000 orders as of January 1, with deliveries scheduled for late February.
In comparison, Tesla’s Model Y, a mid-sized SUV, starts at 258,900 yuan, while the Model S sedan has a starting price of 698,900 yuan. Other competitors, such as Li Auto’s L9 SUV and Xpeng’s G9 SUV, offer similar advanced features at varying price points.
The Chinese electric vehicle market is set to witness the launch of more than 100 new models in 2024, according to HSBC. Consumers are increasingly drawn to in-vehicle tech features and driver-assist capabilities, which are deemed “far more advanced” than earlier electric or traditional gasoline-powered vehicles, notes Yiming Wang, an analyst at China Renaissance Securities. Price and maximizing mileage remain top considerations for consumers.
Appotronics’ Li foresees a significant surge in demand for car tech, predicting revenue in the range of “a few hundred million” yuan this year. Chinese consumers appear willing to pay a premium for advanced car tech, in contrast to U.S. automakers who are more focused on cost reduction.
Chinese companies currently dominate the supply chain for electric car batteries, giving them a competitive edge. BYD surpassed Tesla in total car production in 2023 and outsold the U.S. automaker in battery-only cars in the fourth quarter.
Traditional foreign auto giants like Volkswagen are grappling with the transition to electric cars in China, while domestic companies, including smartphone company Xiaomi and Geely-backed startup Zeekr, are racing to release their electric vehicles.
The difference in approach between German and Chinese automakers is evident. German engineers prioritize horsepower, whereas Chinese engineers start with cockpit and interior design, highlighting a shift from a mechanical, bottom-up approach to a digital, top-down strategy.
In the past year, driver-assist features have emerged as a key competitive factor for electric cars in China. While Tesla’s Autopilot for highway driving is available, the “Full Self Driving” (FSD) feature for city streets is not yet offered. Chinese regulators are gradually permitting more driver-assist features in cities, with a national push for developing self-driving technologies.
The willingness of consumers to pay for such features remains uncertain, with survey results showing varying preferences. While customers express a general willingness to pay for safety and navigation features, the buying behavior regarding specific advanced driver assistance system (ADAS) features tells a different story.
Shay Natarajan, a partner at Mobility Impact Partners, a private equity fund investing in transportation, notes that customers are more inclined to pay for certain ADAS features, such as blind spot warnings or surround camera views, rather than the Full Self Driving (FSD) feature.
