China New Growth: EV disassembly book highlights innovation, not subsidies

BEIJING, June 20 (Xinhua) -- The narrative peddled by some Western politicians, that the thriving Chinese electric vehicle (EV) industry owes its success to unfair government subsidies, fails to resonate within the industry itself.

At least, Japanese automobile engineers aren't buying it. Their response to Chinese competitors is a more hands-on approach, involving shipping a model back to their homeland, taking it apart completely, and then publishing a detailed book to serve as a valuable study guide for local carmakers.

The book titled "A Thorough Disassembly of China BYD SEAL," published by Japan's Nikkei Business Publications, is featured on the publisher's e-commerce platform with an enticing introduction: "Unveiling the reality behind BYD's formidable capability to surpass Tesla as the world's leading EV manufacturer."

It carries a price tag of 880,000 yen (roughly 5,570 U.S. dollars), and when complemented with online services, the package is offered at 1.32 million yen. The cost of this premium bundle, serving as an unofficial manual, represents nearly 30 percent of the cost of the EV model in the Chinese market.

Not long after, UBS also stripped down a SEAL model. The Swiss investment bank's analysis report attributed the car's exceptional performance and cost-effectiveness to its proprietary manufactured blade cells, high cell-to-pack integration ratio, good battery management system, simple integration in the manufacturing process and improved crash safety.

Chinese EV powerhouse BYD, whose early model's appearance was derided as being a knock-off of the Toyota Corolla or Honda Fit, has now turned the tables and emerged as a subject of study for its global competitors.

This is not unusual. At this year's Beijing auto show, China's homemade vehicles featuring on exhibition stands drew close examination and high praise from global industry insiders, underscoring that quality and innovation are crucial to the survival and success of Chinese carmakers amid intense competition.

BYD and other leading Chinese original equipment manufacturers are set to conquer the world market with high-tech, low-cost EVs for the masses, thereby accelerating global EV adoption, according to the UBS report.

HIGH PATENTING LEVELS

BYD's 2023 annual report revealed that its research and development (R&D) expenditure for the year had soared to about 39.6 billion yuan (5.56 billion U.S. dollars), marking a 112 percent year-on-year increase and surpassing Tesla's R&D spending.

The EV maker's investment in innovation has paid off. Nikkei Asia cited the data released by Patent Result in Tokyo as showing that BYD had filed for over 13,000 patents between 2003 and 2022, securing almost 16 times the number of patents achieved by Tesla, which secured 836 patents during the same period.

Also, the 2023 patent disclosure figures for new energy vehicles in China, according to a report by the China Automobile IP Utilization Promotion Center, indicated that BYD, with 1,117 patents, had secured second place, still overshadowed by Chinese battery giant CATL's stellar performance with an outstanding 2,769 patents.

Such patenting sprees have revealed that securing a competitive edge through technology input has become a prevalent narrative within China's burgeoning EV sector.

The top ten enterprises in terms of the country's new energy vehicle sales had amassed a global portfolio of over 100,000 valid patents by the end of 2023, a figure that is expanding at a swift pace annually, said Shen Changyu, head of the China National Intellectual Property Administration, at a press conference.

In the domain of lithium batteries, particularly the cutting-edge solid-state batteries, China stands as one of the leading global tech hubs, according to Shen.

HIGH-END MARKET

Moreover, the surge in smart automotive technology has attracted IT behemoths like Huawei into an aggressive expansion in the auto sector. This intelligent evolution has shifted the industry landscape, with the previous low-cost strategy no longer the defining feature of China's EV market.

Intelligent connected technology featuring semi-autonomous driving has been delivering substantial added value and elevating homegrown vehicles into the luxury segment, where they captivate domestic consumers with a compelling appeal.

Aito, a brand jointly developed by Huawei and Chongqing-based automaker Seres, started the delivery of a six-seater sports utility vehicle (SUV), named M9, in February this year. Its electric version is priced at above 500,000 yuan (about 70,000 U.S. dollars), matching BMW's luxury SUV, the X5.

In April, the M9 achieved a remarkable delivery volume of 13,400 units, surpassing a host of luxury brands and securing top spot on the monthly sales chart for the domestic market segment above 500,000 yuan.

BYD has also launched its premium plug-in hybrid Yangwang U8 that can float on water, and which is available at a price exceeding one million yuan.

Chinese consumers are willing to pay a premium for domestic electric vehicles, favoring them over foreign counterparts, a growing trend challenging the argument that the country's EV carmakers depend on subsidies to maintain a cost advantage.

"Please make good use of it," Koji Kariatsumari, Nikkei BP's senior researcher, wrote in the unofficial disassembly book's preface. This book includes "a wealth of information that you should know about the development policies and design philosophies of Chinese manufacturers that will lead the future of the world's EVs," Kariatsumari added. ■