As Chinese businesses seize market share from foreign competitors, China is evolving into a global leader in electric vehicles.
TOKYO — According to a Nikkei poll, Chinese enterprises have increased their market share in the marketplaces for cutting-edge materials, electric automobiles, and 16 other important goods and services.
The United States and other nations are having trouble reducing their reliance on Chinese supply chains for EVs and other items, despite their best efforts to defend their economies by adopting protectionist postures.
Nikkei examined the market shares for 63 final goods, services, essential components, and raw materials used in the world economy.
Chinese businesses increased their market shares of EVs, battery components, liquid crystal display panels, and 15 other important goods and services in 2022 among the top five market leaders in each category.
Additionally, Chinese businesses have above 30% market shares in 13 of these markets.
Chinese firms are particularly apparent in the EV and associated areas. Even though Tesla had the largest percentage of the EV market in 2022 (18.9%), three Chinese manufacturers together held a larger combined share (27.7%). That year, Tesla’s market share was 3.4 percentage points smaller than it had been in 2021. The second-largest share went to BYD, jumping from 6.9% to 11.5%.
Chinese businesses dominate the top five makers of insulators for lithium-ion batteries, which are used in EVs and other products, with a combined share of 63%. With an 11% stake, Sinoma Science & Technology, which didn’t place in the top five in 2021, came in second.
BYD increased its market share for lithium-ion batteries for EVs from 7.7% to 14.4%. Together, BYD and other Chinese manufacturers obtained more than 60% of the market.
From the upstream to the downstream process, Chinese enterprises have come to dominate the EV supply.
BYD announced a net profit of 10.9 billion yuan ($1.5 billion) on August 28 for the January-June period, a threefold increase over the same period last year. It stated in July that it would establish a plant in Brazil to produce EVs and other goods.
Gotion, the fourth-largest battery manufacturer in China, intends to open a factory there later this year.
Given the situation, it is become harder to decrease reliance on China for EVs and associated items.
American businesses have been reacting in a number of ways as the U.S.-China conflict shows no signs of abating. While Sequoia Capital, a renowned venture capital firm, opted in June to spin off its China division and separately handle U.S. and Chinese funds, Apple and others are moving their supply chains from China to India.
Elon Musk, the CEO of Tesla, reportedly told a top Chinese government official during a May visit that his company will increase its operations in China and was against a “decoupling” between the United States and China.
In the first half of this year, 14 Chinese companies in the semiconductor industry raised more than $6.83 billion through IPOs.
Meanwhile, high-performance packaging and inspection equipment will be installed at Micron Technology’s Chinese manufacturing facility for a reported 4.3 billion yuan.
The Nikkei survey also reveals that, out of all nations, American businesses held the largest market shares for 22 different items. China was second in 16 markets.
The greatest shares of six marketplaces were held by Japanese corporations, down from seven.
Kumiko Pivette, senior manager at PwC Japan, stated that it is crucial to diversify supply chains on a region-by-region basis in order to spread risks.
Pivette warned that while there are efforts to migrate manufacturing activities outside of China, Chinese enterprises’ leading positions in some areas for cutting-edge technologies related to military strength and national power may decline. This is based on her knowledge of economic security and geopolitical threats.
