China commanded over 60% of the global passenger electric vehicle (EV) market share by the end of the first half of last year, according to Counterpoint Technology Market Research’s Q3 2024 Global Passenger EV Model Sales Tracker.

Capitalizing on the country’s EV boom, Chinese automakers leverage advanced technologies to accelerate car development and outpace foreign rivals such as Tesla, Volkswagen, BMW, Toyota, Hyundai, Nissan, General Motors, and Ford.

At a recent convention, Tesla CEO Elon Musk acknowledged Chinese automakers as the company’s toughest competitors, warning that some traditional automakers might be forced to exit the market without “trade or tariff barriers.” In response to competitive pressures, Volkswagen has partnered with Chinese EV startup Xpeng to cut time to market by 30%, while Stellantis has collaborated with Leapmotor to produce cost-effective EVs more efficiently.

Favorable government policies, localization of the automotive supply chain, a modular development approach, OEMs’ vertical integration efforts and a start-up business culture helped Chinese automakers to launch more affordable vehicles with the latest features, such as L2+ autonomy, digital cockpit, 5G connectivity and longer driving ranges. The sheer number of models launched by Chinese automakers is similar to how Chinese smartphone players have established themselves as global companies with well-known brands. With evolving automotive technologies and changing consumer dynamics, the lifecycle of a vehicle is getting shorter with more models launching every year in China. The number of models launched in Europe has also increased with rising penetration levels for Chinese brands in that region. Counterpoint Research has found that nearly one-third of the new models launched in Europe in H1 2024 are from Chinese brands.

China remains at the forefront of adopting advanced technologies to automate production and accelerate digital transformation in the automotive manufacturing sector. These efforts aim to address challenges such as resource shortages, reducing energy costs and lowering overall production expenses, making vehicles even more affordable.