West car companies battle survival against China, as Chinese companies are increasingly taking a lead not only in electric vehicles but also in batteries, software and autonomous driving technologies, according to the BBC.
The BBC visited factories in Beijing and Hefei, on the margins of the Auto China 2026 exhibition, the world's largest car exhibition, recording impressive levels of automation and speed of development of new software. Foreign car companies, which for decades dominated the Chinese market, are now having difficulty keeping up with the pace of their Chinese competitors.
"We have no chance of this," said Honda CEO Toshihiro Mibe, after visiting a fully automated factory in Shanghai. Accordingly, Ford chief, Jim Farley, warned that western car companies are "in battle for their survival".
As the BBC points out, China's sovereignty is not limited to car production alone. The country now stars more than 315 categories of exported products, many of which are related to the supply chain of electric vehicles, such as batteries, components and production equipment.
According to the International Energy Agency, the production of a small electric SUV in China costs at least 30% less than the developed economies, mainly due to the lower battery costs and the full verticalisation of production.
This rise was based on multi-annual state support, with Beijing channeling tens of billions of dollars into the electric vehicle and battery industry. At the same time, intense competition within China accelerated innovation. Technological giants such as Xiaomi, Huawei and Alibaba have dynamically entered the car market, transferring the know-how of digital technology to the automotive industry.
Xiaomi, who featured her first electric vehicle only in 2024, is already among the top Chinese brands. In her factory outside Beijing, a car exits the production line every 76 seconds. The aim of the company is to create a single ecosystem that will connect cars, mobile phones and "smart" household appliances.
Accordingly, BYD has developed super-speed charging systems offering 400 km autonomy within about five minutes, a time equivalent to a gasoline supply.
At the same time, traditional western car companies are forced to redefine their strategy in China. Volkswagen invests $700 million in XPeng in order to gain access to autonomous driving software and technologies, while Stellantis works with Dongfeng to produce Peugeot and Jeep models in China.
The pressure is also reflected in market shares. The share of foreign car manufacturers in the Chinese market decreased from 64% in 2020 to just 32% this year. At the same time, Chinese companies are expanding aggressively in Europe and emerging markets, despite the high tariffs imposed by the European Union.
Analysts warn that the transfer of battery production, battery technology and software development to China may harm industrial centres in Europe and Southeast Asia, with significant impact on employment and local economies. As analyst Bill Russo notes, "the centre of gravity of the global car industry has already shifted."
