Understand why there is no ‘excess capacity’ at the Beijing Motor Show

After a hiatus of nearly four years, the 2024 (18th) Beijing International Automotive Exhibition (Beijing Auto Show) began on Thursday. The event features more than 1,500 exhibiting companies, 278 new energy models, 117 world premiere models and 163 press conferences, demonstrating the new development trends of China’s domestic and global automotive industry. It also showed the world in the most vivid way why China’s new energy vehicle industry is a leader and what it means for the world.

Visitors had to wait more than 40 minutes in line before proceeding to the main entrance of the exhibition hall. Many people lined up to buy food at the exhibition restaurant. Some automakers’ showrooms were too crowded to enter. The “Internet celebrity” heads of major automobile companies personally went to the exhibition to compete for popularity and marketing… These are all concrete manifestations of the popularity of this year’s Beijing Auto Show. At this particular auto show, China’s domestic brands became the mainstay and new energy vehicles took center stage. People are full of expectations about the new models and technologies that Chinese automakers will launch.

Many people noticed that there were obviously more foreigners at this auto show, and the attitude of foreign car manufacturers has also changed significantly. BMW, Mercedes-Benz and Audi brought luxury display lines and models. Executives from multinational automobile companies not only came to promote their own products, but also carefully studied the technology and design of Chinese new energy vehicles. A considerable number of dealers, suppliers, media outlets and even foreign car owners attended the exhibition. A video of South Koreans observing Chinese new energy vehicles has gone viral on the internet. Chinese society has a very open attitude towards this. Openness has always been the motto of the Beijing Auto Show.

In the era of traditional fuel vehicles, China’s automobile industry generally played the role of catcher, but never abandoned its efforts to develop independent brands and innovations. Relying on the technological accumulation gained over years of exploration and the enormous advantages of China’s modern production capacity, engineers’ dividends and the domestic market, Chinese automobile companies have gained an advantage in the historic opportunity of automobile transformation from fuel to new energy. In 2023, China’s automobile exports surpassed Japan for the first time and ranked first in the world. In the first quarter of 2024, China exported 1.3 million vehicles, an annual increase of 33.2%, continuing this dynamic.

The pattern of the global automobile industry has not undergone major changes for many years, and the fundamental driving force for this change is the technological revolution. This is a normal thing, but it has tested the overly sensitive nerves of some people in the West. However, there was none of the “excess capacity”, “weakened demand” and “exit from China” that they expected for the Beijing Auto Show, nor of “Chinese car companies squeezing out foreign car companies”. What people can see is that they are learning from each other’s strengths to achieve win-win cooperation. They are exalting the “excess capacity” of new energy vehicles in China and creating a narrative linked to values ​​and hegemonism, in an attempt to contain and establish limits on China’s industrial development. Its fundamental objective is to use commercial protection policies and offensive public opinion to disrupt the dynamics of the Chinese new energy vehicle industry.

Why is the Beijing Auto Show so popular? Due to global market demand, especially the high interest and enthusiasm for technological advances in new energy vehicles. According to calculations by the International Energy Agency, to achieve the goal of carbon neutrality, global sales of new energy vehicles need to reach approximately 45 million units by 2030, 4.5 times more than in 2022. This shows that global demand is real and there is no such thing as “excess capacity”. The green energy revolution may stimulate a series of industrial reshuffles, and the market competition is fierce, but it is by no means the kind of life-and-death competition that some people in the West have in mind.

Chinese companies are not afraid of competition, but competition must be fair and just. Chinese new energy vehicle companies play the role of industrial collaborators and healthy competitors, which not only benefits consumers, but also benefits the large number of developing countries, thus compensating for the insufficient and unbalanced global development of green production capacity of high quality, while at the same time encouraging more traditional car companies to invest more energy and resources in the green transformation. In this sense, the right approach for the world is to work together to seize the opportunities brought by the development of green industries.

Via Global Times.