IN May, Chinese automaker Chery launched a new energy vehicle (NEV) with a driving range exceeding 2,000 kilometers, featuring tires supplied by the German tire manufacturer Continental AG.

Since 2019, the two companies have worked together to explore the NEV market. Through joint production projects or stake acquisitions, foreign companies are tapping into China’s NEV market, whose growth has been driven by the large number of consumers, a complete industrial chain, continuous innovation, and supportive government policies.

Data from the China Association of Automobile Manufacturers shows that in 2023, China’s production and sales of NEVs exceeded 9.587 million units and 9.495 million units, respectively, accounting for over 60% of the global total in both regards.

“The development of the NEV industry fosters innovation across industries, as well as more open and inclusive international cooperation,” said Tao Min, head of operations at Continental Tires (China) Co., Ltd., the first wholly-owned tire production base of Continental AG in China. Continental Tires’ partnerships extend to more than 10 Chinese automakers, including BYD and NIO.

The NEVs of Chery, which has about 230 foreign suppliers, have gained popularity both at home and abroad. During the first five months of this year, the brand's NEV sales hit 135,861 units, up 168.9% year on year.

Acknowledging China’s burgeoning innovation in NEVs, Volkswagen has established deep ties with Chinese companies, including electric vehicle maker XPeng and Horizon Robotics, an intelligent driving technology provider. “Through the partnership with XPeng, we are not only accelerating product development but also boosting efficiency and reducing costs,” said Ralf Brandstätter, chairman and CEO of Volkswagen Group China.

Foreign automakers need China’s electrification technology to achieve the “in China, for the world” strategy, while Chinese automakers and suppliers need to access global markets with foreign partnerships, said Gao Debu, a professor at Renmin University of China.

Two years ago, Ralf Lorenz from Volkswagen became the chief purchasing officer of the Chinese battery maker Gotion High-tech, responsible for the firm’s industrial chain management. In 2020, Volkswagen Group (China) announced an investment of 1.1 billion euros (US$1.18 billion) in Gotion High-tech to become its largest stakeholder. Since then, Volkswagen has sent three senior executives to Gotion High-tech, with the two firms co-hiring a team of over 100 employees.

Industry insiders believe that the integration of home and foreign players can help further optimize resources and boost the development of the NEV industry. The establishment of Anhui Cummins, a joint venture between Chinese carmaker JAC Group and American engine manufacturer Cummins Inc., is a testament to these close partnerships.

With support from JAC, Cummins has enhanced its research and development capabilities in medium and light-duty engines, while JAC has expanded exports by leveraging Cummins’ global network. The two have also been working together on new NEV models.

“The joint venture taps into the core values of both sides, with the ultimate purpose of achieving commercial success and win-win,” said Rick Bai, general manager of Anhui Cummins Power Co., Ltd.

According to the International Energy Agency, the global demand for NEVs is expected to triple to 45 million units by 2030, while the demand for power batteries will quadruple to 3,500 GWh.

Capitalizing on its technological and industrial chain advantages, China continues to draw NEV enterprises to set up subsidiaries in the country. In March, a joint venture between Mercedes-Benz Group China Ltd. and BMW Brilliance Automotive Ltd. began operation in Beijing, with plans to build at least 1,000 supercharging stations across China by 2026. In May, Tesla broke ground on a mega factory in Shanghai to manufacture its energy storage batteries. Volkswagen has announced plans to launch at least 30 electric car models in China by 2030.(Xinhua)