There’s a new trade war brewing – over global dominance in the electric car market
There’s a trade war brewing between China and the West, at stake is who will dominate the global market for electric vehicles.
Outside the port city of Ningbo, Chinese car company Zeekr is rolling out luxury EVs and growing fast. The factory has only been up and running for three years, but this year it’s more than doubling production.
Chinese car company Zeekr is rolling out luxury EVs at its factory near the port city of Ningbo. Pic: Lex Ramsay
Zeekr is a new player in the EV market, but it has unbridled ambition to sell its high-end, high-tech cars abroad. It’s a subsidiary of a state-backed company, Geely.
However, US and EU critics say the financial backing and vast resources of China’s government gives companies like Zeekr an unfair advantage.
In a recent trip to Beijing US treasury secretary Janet Yellen accused China of “overproduction” and “dumping” its EVs on overseas markets. The European Commission has started an investigation into whether to impose punitive tariffs on China’s industry.
But at Zeekr the threat of tariffs is being talked down. The company insists the global market is big enough for everyone.
Zeekr is a new player in the EV market. Pic: Lex Ramsay
Speaking to Sky News at a massive auto show on the outskirts of Beijing, Zeekr vice president Chen Yu explained that when foreign car companies first started setting up EV plants in China, local car companies watched on and learned fast.
“Definitely,” Mr Chen said. “We learned about the performance, the design, the culture, everything.”
Now companies like Zeekr, and BYD which is a giant in the Chinese EV manufacturing market, are taking on traditional car companies.
“I would not say (Chinese EVs) are dominating the market. I would say just they bring more diversity to the local customer, that is the nature of competition as you know,” Mr Chen said.
However, the possibility of Europe slapping tariffs on Chinese EVs is a concern for the Zeekr executive: “Definitely, if the tariff goes up, no doubt we are worried about the potential challenge.”
Mr Zhang, EV owner Pic: Lex Ramsay
On the floor of the auto show, car dealers and importers were clearly impressed with China’s EVs and warned legacy car manufacturers that they are in trouble.
New Zealand car dealer Matthew Foot has been attending the annual show for five years, and said: “It’s going to be very hard to beat China. They get incredible resources from the government; from lithium mines, to the ships and everything in between.
“Obviously you can see why Europe is fearing them and taxing them as well.”
This week US Secretary of State Antony Blinken is in China. Trade tensions are on the agenda, alongside the world’s geo-political crises.
The US already imposes a 27.5% tariff on Chinese cars. But in Europe it’s only 10% and that makes companies like VW, Volvo and BMW increasingly nervous.
In Beijing last week German Chancellor Olaf Scholz said: “It’s clear that we have to talk about questions of overcapacity, and that we have to talk about subsidy competition.”
BYD car at Beijing Auto Show Pic: Lex Ramsay
Germany is in a difficult position. As Europe’s largest car manufacturer, it fears that if the EU slaps tariffs on Chinese cars, China could retaliate by restricting access to its vast market.
But the fact is, more than half of all new electric cars sold worldwide are from China and it can make them cheaper and faster than its competitors.
At the end of last year China’s EV giant, BYD, sold more electric cars than Tesla. Tesla was back on top last quarter, but the competition is fierce.
The scale of production is staggering. BYD owns its mines, battery factories and eight ships.
Even a comparatively smaller company like Zeekr is the model of efficiency, with 2,700 workers churning out around 500 cars a day.
The focus on EVs is part of Chinese President Xi Jinping’s plan to overhaul the country’s debt-driven economy. He calls it “new production forces”. Investing in infrastructure is out, new technology is in.
In the industrial hub of Anhui Province, local officials are also brushing off the looming threat of tariffs. Provincial official Pan Feng said: “Some countries, thinking about their short-term self-interests, introduced some regulations, but I think they are only temporary.
“China is a big country, with a big market, it has huge power and confidence to counteract these conflicts.”
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Chinese buyers are also confident about their country’s electric cars, purchasing more than seven million of them domestically last year.
The country also has more charging stations than anywhere else on the planet.
While charging his BYD electric car in Zhejiang Province, Mr Zhang told us: “Chinese-made cars are good enough for us ordinary Chinese. If you’re thinking of buying an EV, there’s no need to go for a Mercedes or a German EV.”
At least 11 people have been killed and 63 injured in an Israeli strike on central Beirut, Lebanese authorities have said.
Lebanon‘s health ministry said the death toll could rise as emergency workers dug through the rubble looking for survivors. DNA tests are being used to identify the victims, the ministry added.
State-run National News Agency (NNA) said the attack “completely destroyed” an eight-storey residential building in the Basta neighbourhood early on Saturday.
Footage broadcast by Lebanon’s Al Jadeed station also showed at least one destroyed building and several others badly damaged around it.
The central Basta neighbourhood in Beirut, where four people were killed in an Israeli airstrike
The Israeli military did not warn residents to evacuate before the attack – the fourth targeting the centre this week.
At least four bombs were dropped in the attack, security sources told Reuters news agency.
The blasts happened at about 4am (2am UK time).
A seperate drone strike in the southern port cuty of Tyre this morning killed one person and injured another, according to the NNA.
The blasts came after a day of bombardment of Beirut’s southern suburbs and Tyre. The Israeli military had issued evacuation notices prior to those strikes.
Pic: AP
Israel has killed several Hezbollah leaders in air strikes on the capital’s southern suburbs.
Heavy fighting between Israel and Hezbollah is ongoing in southern Lebanon, as Israeli forces push deeper into the country since launching a major offensive in September.
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‘Dozens’ of Palestinians killed in Israeli airstrike
US envoy Amos Hochstein was in the region this week to try to end more than 13 months of fighting between Israel and Hezbollah, ignited last October by the war in Gaza.
Mr Hochstein indicated progress had been made after meetings in Beirut on Tuesday and Wednesday, before going to meet Israeli Prime Minister Benjamin Netanyahu and defence minister Israel Katz.
According to the Lebanese health ministry, Israel has killed more than 3,500 people in Lebanon and wounded more than 15,000.
It has displaced about 1.2 million people – a quarter of Lebanon’s population – while Israel says about 90 soldiers and nearly 50 civilians have been killed in northern Israel.
World
Vladimir Putin vows to increase production of Russia’s ‘unstoppable’ missile – as NATO and Ukraine to hold talks
President Vladimir Putin has said Russia will ramp up the production of a new, hypersonic ballistic missile.
In a nationally-televised speech, Mr Putin said the intermediate-range Oreshnik missile was used in an attack on Ukrainian city Dnipro in retaliation for Ukraine’s use of US and British missiles capable of striking deeper into Russian territory.
Referring to the Oreshnik, the Russian president said: “No one in the world has such weapons.
“Sooner or later other leading countries will also get them. We are aware that they are under development.”
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He added: “We have this system now. And this is important.”
Detailing the missile’s alleged capabilities, Mr Putin claimed it is so powerful that using several fitted with conventional warheads in one attack could be as devastating as a strike with nuclear weapons.
General Sergei Karakayev, head of Russia’s strategic missile forces, said the Oreshnik could reach targets across Europe and be fitted with either nuclear or conventional warheads – while Mr Putin alleged Western air defence systems will not be able to stop the missiles.
Mr Putin said of the Oreshnik: “There is no countermeasure to such a missile, no means of intercepting it, in the world today. And I will emphasise once again that we will continue testing this newest system. It is necessary to establish serial production.”
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Testing the Oreshnik will happen “in combat, depending on the situation and the character of security threats created for Russia“, the president added, stating there is “a stockpile of such systems ready for use”.
NATO and Ukraine are expected to hold emergency talks on Tuesday.
Meanwhile Ukraine’s parliament cancelled a session as security was tightened following the strike on Dnipro, a central city with a population of around one million. No fatalities were reported.
EU leaders condemn Russia’s ‘heinous attacks’
Numerous EU leaders have addressed Russia’s escalation of the conflict with Poland’s Prime Minister Donald Tusk saying the war is “entering a decisive phase [and] taking on very dramatic dimensions”.
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Russia’s new missile – what does it mean?
Speaking in Kyiv, Czech foreign minister Jan Lipavsky called Moscow’s strike an “escalatory step and an attempt of the Russian dictator to scare the population of Ukraine and to scare the population of Europe”.
At a news conference, Mr Lipavsky gave his full support for delivering the additional air defence systems needed to protect Ukrainian civilians from the “heinous attacks”.
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