The electric car market in China is evolving beyond just offering the lowest prices, as consumers are now willing to pay for additional features. One such feature that is gaining popularity among Chinese consumers is panoramic sunroofs, with over 80% expressing a preference for electric vehicles equipped with them. This represents a significant opportunity for companies like Fuyao Glass, a major supplier of car glass, whose revenue from panoramic sunroofs accounted for 7% of its total revenue in 2023. Survey results from JPMorgan and AlixPartners indicate that Chinese consumers are more willing to pay for technological features and content in electric vehicles than U.S. and European consumers.
At the Beijing auto show, the focus was on technology features such as driver-assist capabilities and in-car entertainment, with nearly every electric car maker emphasizing these aspects. However, the core technology that remains crucial for electric cars is the battery. JPMorgan’s survey found that about 70% of respondents are willing to pay more for a desired battery brand, particularly those offering supercharging capabilities. Contemporary Amperex Technology (CATL) is ahead of its competitors in this regard and is identified as one of the top Chinese electric car supply chain players.
While there is growing interest in purely electric vehicles, JPMorgan’s survey also revealed a significant increase in preference for plug-in hybrid cars among Chinese consumers. Brands like BYD, which offers hybrid and battery-only cars, have garnered strong consumer favor, with BYD emerging as the top brand favored by consumers for three consecutive years. Other brands like Xiaomi, Geely, Huawei’s Aito brand, and Li Auto are also gaining recognition among consumers. Tesla, while seeing a slight decline in brand power, remains a desirable choice, with the Tesla Model 3 being the most sought-after battery-only car in the 200,000 to 300,000 yuan price range.
Chinese electric car company Nio recently launched a new car at a lower price point, signaling a shift in the market where the price war may be coming to an end. The new Onvo L60 SUV, priced just over 200,000 yuan, is positioned below Tesla’s Model Y but slightly higher than Xiaomi’s SU7 electric sedan. Nio CEO William Li believes that most of the price cuts in the electric car market in China have already been made, indicating a new phase in the competition where quality features and technology will play a crucial role in attracting consumers. With the market shifting towards quality and features, companies will need to focus on developing innovative and attractive offerings to win in the rapidly growing Chinese electric car market.
