SHANGHAI – U.S. automakers cut sorry figures in China’s traditional vehicle market in 2020. General Motors lost market share with a 6.1 percent decline in sales, its third annual decrease in a row. Ford booked less than half of its 2016 volume of 1.27 million despite a rebound. Jeep demand plunged 45 percent to below 41,000.
But GM’s light-vehicle joint venture and Tesla stood out for reshaping the electric vehicle market.
Before 2020, EVs sold in China were mostly battery variants of gasoline models built by legacy carmakers to earn carbon credits required by the government, and the main buyers were taxi companies and ride-hailing operators.
The landscape was upended after Tesla’s Shanghai plant rolled out the Model 3 and GM’s JV launched a new small electric sedan under the Wuling brand.
The Model 3 and Wuling Hong Guang Mini EV have each developed a huge following among private car buyers after launching last year.
Tesla started delivering the Model 3, its first locally produced vehicle, in volumes in January 2020.
The EV’s dynamic styling, minimal interior design, strong performance and high level of connectivity quickly won the hearts of young shoppers.
A competitive price also makes it attractive.
Local production makes Tesla models eligible for government subsidies in China. It has also enabled the EV maker to source more parts and components locally, thus creating ample room to adjust vehicle prices.
By consistently increasing the Model 3’s local content, ostensibly at lower costs, Tesla reduced the vehicle’s starting price twice last year, bringing it down 16 percent to 249,990 yuan ($38,624) after government subsidies.
The cuts unleashed strong demand. In December, deliveries of the locally built Model 3 topped 23,800, with annual volume exceeding 137,000.
While the Model 3 was gaining popularity among young consumers in big cities, a four-seat electric car developed and assembled by SAIC-GM-Wuling Automobile Co., GM’s light-vehicle partnership with SAIC, debuted in July.
The Hong Guang Mini EV has a short range of 170 kilometers, disqualifying it for government subsidies. But the vehicle’s appeal in the subcompact EV market, where competitors are domestic Chinese carmakers, comes from its low starting price of 28,800 yuan and brand association with GM.
That has made the Hong Guang Mini EV an instant hit in small cities and rural areas. In the first 20 days, deliveries exceeded 20,000.
In December, Hong Guang Mini EV deliveries surpassed 35,000. Along with the Model 3, it grabbed more than 28 percent of the Chinese EV market during the month.
Tesla and SAIC-GM-Wuling are poised to further boost EV share.
Tesla launched sales of its second locally produced product, the Model Y, this month. Some customers who ordered the electric crossover have to wait until the second quarter for delivery, salespeople at Tesla stores in Shanghai say.
To meet rising demand for the Hong Guang Mini EV, SAIC-GM-Wuling started building it at a second plant, in Liuzhou, late last year. The vehicle was previously assembled only at the company’s Qingdao plant.