The Albany Gazette - China's EV execs bullish on Western pressure at Beijing car show

Thousands of car lovers and company representatives descended on Beijing this week for the Auto China show -- a chance for industry giants to show off new designs and cutting edge technologies aimed at getting ahead in the fiercely competitive sector.

And even as firms face down a cut-throat price war at home and mounting regulatory pressure overseas, executives and attendees were upbeat.

"I've never seen anything like this before," one company representative who declined to be named told AFP.

"There's a lot of expectation about what new models, new technologies Chinese carmakers will unveil."

One of the stars of the show was Lei Jun, CEO of consumer electronics giant Xiaomi, fresh from declaring he had staked his "reputation" on the success of his firm's first-ever EV, the SU7.

Lei was mobbed by scores of people, some shouting his memetic slogan "are you OK?" -- a joke referring to the CEO's broken English which fans have reclaimed as proof of his likeability.

All were keen to get a snap of the latest player in the hotly contested EV sector.

Lei has said his SU7 is the most "Apple-friendly" EV on the market -- tapping into a prominent theme at the Auto Show: the emphasis on smart technology.

With everything from high-tech navigation systems to built-in karaoke machines, Chinese EVs can sometimes feel equipped with more gadgets than James Bond.

"Chinese customers are now more attuned to fast-evolving digitalization, internet-stage and smart technology inside their vehicles," Brian Gu, President and Vice Chairman of EV giant XPeng, told AFP.

"Using voice, using large screens and relying on more smart-driving technologies -- that's also already becoming a hallmark of Chinese products," he said.

European customers, he said, aren't yet ready for that technology.

"It will take time, but I think ultimately, technology will converge," Gu explained.

"We're very confident about that."

- 'No shortcut' -

But before that can happen, Chinese carmakers will have to get past European regulators.

The European Union launched an investigation last year into Chinese state EV subsidies, which it said had given companies from the country an "unfair" leg up in the local market.

And Brussels -- along with allies in Washington -- has raised fears that Chinese industrial "overcapacity" created by excessive state subsidies could see global markets flooded with cheap Chinese EVs.

"We certainly hope that there won't be an introduction of tariffs. I think it is not good for consumers," said William Li, CEO of Nio, another EV giant.

"Every place, region, and country has some consideration for protecting employment in their own industries," he said.

"This is a reasonable demand, but we still hope to return to common sense."

XPeng, Gu said, is also determined to make headway into the European market.

He compared the obstacles Chinese firms are now facing to the similar hurdles European giants such as Volkswagen faced when entering the Chinese market in the 90s and 2000s.

"We may have to think about creative strategies, we may have to form relationships and partnerships. Maybe Chinese players have to do the same in order to compete, and I think there's no shortcut," he said.

"We may have to do all of that to remain a player, a leading player, in Europe. So we're prepared to do that, for the long term-market and long term opportunity there."

- Fierce competition -

Executives are also sanguine about an intensifying price war between EV companies, made all the more competitive as consumer spending slows in China.

On Monday, Beijing-based Li Auto slashed the prices of its models by up to 30,000 yuan ($4,100).

That followed a decision by Elon Musk's Tesla -- which notably did not attend this week's Auto China -- to lower its prices by 14,000 yuan.

But top EV bosses point to the intense competition in the Chinese market as one of the reasons why it is so innovative compared to foreign firms -- even if it means that company profits might suffer as companies rush to offer the best products at the lowest prices.

"The price war is certainly a reality for all participants in the competition to face," Nio's Li told AFP.

"It will, of course, reduce each company's sales and there will be some impact on profitability," he admitted.

"On the other hand, this is a normal phenomenon of market competition."

XPeng's Gu said the new Xiaomi EV is likely the last major brand to enter the market for the foreseeable future.

And he admitted that when the price war stabilises, it will be "brutal".

"Chinese players become productive, competitive and in some ways technologically more innovative because of the competition," he said.

"That's how you grow."

(P.Clark--TAG)