Amid the global shift towards electric vehicles, Andy Palmer, often referred to as the “godfather of EVs,” has issued a cautionary note to automakers. He warns against prioritizing hybrid vehicles over fully electric models, a strategy he believes could leave them lagging behind Chinese competitors.
What Happened: Palmer, a former Aston Martin AMGDF CEO and Nissan NSANY executive, highlighted the rapid advancements made by Chinese automakers like BYD BYDDY in the electric vehicle market. These companies have gained significant ground domestically by offering cost-effective and technologically advanced vehicles.
“The Chinese cars are bloody good. The Chinese vehicles offer remarkable value for money for what they deliver,” Palmer said.
Palmer pointed out that Chinese brands excel in battery technology and software, providing exceptional value.
Palmer attributed China’s success in the EV sector to its strategic industrial policies, which have seen the government invest over $230 billion in subsidies since 2009. During his time at Dongfeng Motor Company, a joint venture with Nissan, he witnessed China’s aggressive EV strategy firsthand.
In response to China’s rise, the U.S. and Europe have implemented tariffs to protect their industries. However, Palmer argued that such tariffs could stifle Western competitiveness.
“My experience with tariffs is it just makes your indigenous industry lazy. The gap becomes even bigger,” he said.
He urged automakers to prepare for fierce competition with Chinese firms, especially in Europe, where companies like BYD and Xpeng are expanding.
Why It Matters: The global electric vehicle landscape is rapidly evolving, with China leading the charge. According to a report from September, 50% of new car sales in China are electric, compared to just 10% in the U.S. This disparity highlights the impact of protectionist policies, such as the Biden administration’s recent tariffs on Chinese goods, including a 100% tax on electric vehicles.
In November, China escalated its trade dispute with the European Union by lodging a formal complaint with the World Trade Organization over the EU’s tariffs on Chinese-made EVs. The EU’s decision to impose tariffs of up to 35% on Chinese EVs was seen as a response to perceived unfair business practices.
Meanwhile, BYD expects it would surpass Tesla Inc. TSLA in BEV sales by 2024, fueled by a 21% increase in EV sales and strong market projections in China.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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