Global Carmakers Losing Ground as China Rewrites the Auto Industry
BBC Business reported Tuesday that global automakers are confronting a painful new reality. China’s EV manufacturers have seized control of the technologies defining the next generation of cars.
Journalists visited factory floors in Beijing and Hefei during Auto China 2026, the world’s largest automotive showcase. What they found was striking automation, rapid software development and cost advantages that legacy Western brands are struggling to match.
Foreign Brands Retreat Inside China
Foreign carmakers’ share of the Chinese domestic market has collapsed from 64% in 2020 to just 32% today, according to consultancy Automobility. That erosion has directly damaged earnings at General Motors and major German manufacturers, which once depended on China for a significant portion of their global profits.
Luxury marques face pressure too. Huawei’s Maextro S800 sedan has become the best-selling car above $100,000 in China, overtaking Porsche and BMW’s flagship models combined.
Honda chief executive Toshihiro Mibe told Japanese media after visiting a Shanghai facility that competition from Chinese rivals felt insurmountable. Ford chief executive Jim Farley has separately warned that Western automakers are fighting for survival as Chinese companies push into global markets.
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How China Built Its Advantage
The International Energy Agency estimates it costs at least 30% less to manufacture a small electric SUV in China than in advanced economies. Lower battery costs and tightly integrated supply chains drive that gap.
State support has been central. Research group Rhodium Group estimates China has channelled tens of billions of dollars into EV and battery manufacturing in recent years. Those subsidies have drawn sharp criticism from the EU and the United States for distorting global competition.
China now leads exports across more than 315 product categories, up from 163 a decade ago. Many of those categories feed directly into EV supply chains, covering batteries, components and factory machinery.
More Than Electric Cars
Shanghai-based auto analyst Bill Russo told the BBC the transition is fundamentally misunderstood in the West. He argued it is not simply about battery-powered vehicles. It is about who controls the next generation of mobility technology.
Tech companies including Xiaomi, Huawei and Alibaba have entered the car market, embedding consumer software directly into vehicles. Xiaomi’s Beijing factory produces a finished car roughly every 76 seconds. The brand only launched its first vehicle in 2024 but already ranks among China’s top sellers.
XPeng founder and CEO He Xiaopeng told the BBC the company views humanoid robotics and flying cars as priorities alongside EVs. BYD, meanwhile, has developed ultra-fast charging that adds 400 kilometres of range in approximately five minutes.
Foreign brands are responding. Stellantis recently signed a roughly $1.16 billion deal with state-backed Dongfeng to co-produce Peugeot and Jeep vehicles in China for both domestic and overseas markets.
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