Chinese automakers could be ready to dethrone American car titans

US automakers will need to make major changes to their businesses if they want to remain competitive with Chinese electric vehicles (EVs) poised to flood the global market, according to an analysis published by industry consultants. automobile

American manufacturers currently do tens of billions of overseas business dollars, but Chinese competitors are poised to take about a third of global market share by 2030 with particularly strong growth in Europe, South America and Asia driven by electric vehicles and plug-in hybrids, projects AlixPartners in its report.

The auto market is evolving to favor electric vehicles thanks in part to policy choices by the Biden administration and other Western governments, and the consulting firm concludes that American companies need to change the course of practices usual if they don't want to do it. stay behind

“The global auto industry has been shaped by several turning points over the past half-century, including the emergence of Japanese production techniques in the 1970s, then the rise of the Koreans, and the more recent disruption caused by Tesla “. Mark Wakefieldglobal co-leader of the automotive and industry practice at AlixPartners, said of the analysis. “China is the new industry disruptor, capable of creating must-have vehicles that are faster to market, cheaper to buy, more advanced in technology and design, and more efficient to build. By traditional [manufacturers]keeping pace with China's strongest brands will require more than a course correction.”

'He's not wrong': Margaret Brennan presses Buttigieg on Trump's stance on purchased electric vehicleshttps://t.co/CARe2QlxtX

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Specific benefits for Chinese manufacturers include a 35% production cost advantage that allows flexibility to reduce tariff impacts, a faster design cycle and a focus on providing drivers with advanced technology features that enhance the experience of the user, among others, according to the AlixPartners report. . These cumulative advantages give Chinese automakers an edge over American competitors in the evolving market.

BYD, China's largest car manufacturer, has already started examining options to penetrate the American market through Mexico, and critics of the Biden administration's electric vehicle push have consistently expressed concern that the approach could end up backfiring by boosting Chinese production capable of undercutting major players in American industry. The administration is concerned about the ability of Chinese companies to do so, as well as unfair business practices, leading the federal government to to impose or strengthen rates against electric vehicles, electric vehicle batteries and other related products in May.

The Biden administration has finalized a handful of strict regulations for a light-, medium- i resistant vehicles in recent months, including a rule that will require manufacturers to ensure that electric vehicles account for 56% of new sales by 2032, with an additional 13% of plug-in hybrid sales in the same year. In addition, the administration is spending billions of dollars to advance EVs adoption, productioni infrastructurebut big business America is losing considerable sums of money in their electrical product lines while consumer demand it doesn't seem to be taking off at the rate defenders were hoping for.

“Automakers who hope to continue operating under the principles of normality are in for more than a rude awakening: they are headed for obsolescence.” Andrew miner treeglobal co-leader of the automotive and industry practice at AlixPartners, he said. “The revolution taking place in the global auto industry is driven by the incredible and previously unthinkable maturation of Chinese automakers who are doing many things differently.”

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