'China Inside': How Chinese EV tech is reshaping global auto design

When Audi executives first saw the Zeekr 001 in 2021, a
long-range electric vehicle with European aesthetics, it was a wake-up call for
the premium German auto brand - if it wanted to compete with the Chinese, it
needed their technology.
"The
Zeekr 001 back then shocked quite everyone," said Stefan Poetzl, president
of SAIC Audi Sales and Marketing. "We needed to do something about
it."
To boost
its EV lineup for Chinese consumers, Audi built the AUDI E5 Sportback in just
18 months using technology provided by Chinese partner SAIC, including
batteries, electric powertrain, infotainment software and advanced driving
assisted systems.
Audi
expects to start delivering the $33,000 EV to customers in China this month and
its global rivals are now also looking to use Chinese intellectual property to
roll out new models rapidly. Toyota and Volkswagen have joint development plans
for China-dedicated models with technology from Chinese partners GAC and Xpeng,
respectively.
Renault
and Ford want to go one step further and develop global models on Chinese EV
platforms, sources said. Renault did not respond to a request for comment. Ford
declined to comment.
Such
licensing deals make up relatively small but growing revenue streams for
Chinese EV makers and, for now, offer a new quid-pro-quo.
Global
automakers need Chinese technology to leapfrog development hurdles and launch
new EVs quickly. Meanwhile, Chinese companies desperately need additional
revenue amid a bruising price war at home and intensifying trade war
abroad.
"It
is a very smart, win-win solution," said Will Wang, General Manager of
Shanghai-based consulting firm Autodatas, which provides teardown reports of
best-selling EV models.
'CHINA INSIDE'
This new
strategy resembles the "Intel Inside" campaign of the 1990s - where
US chipmaker Intel used state-of-the-art components to transform computers into
premium products.
In this
case, Chinese automakers sell EV technology in a box: the underpinnings for
ready-to-build, white label battery-powered cars suitable even for low-volume
manufacturers with small budgets.
Leapmotor
has partnered with Stellantis to sell its EVs outside China and is talking to
other brands to license its technology, CEO Zhu Jiangming told Reuters.
Using a
ready-made Chinese EV chassis and software could save billions of dollars and
years of development time and help traditional automakers catch up with Chinese
rivals, auto industry experts say.
Renault
was an early adopter, building the low-cost Dacia Spring EV on a platform from
China's Dongfeng for sale in Europe starting in 2021.
Renault
has gone one step further with the new electric Twingo under development at its
research centre in Shanghai, with a Chinese EV engineering firm Launch Design
providing technical support in developing an EV platform, according to two
people familiar with the matter.
Launch did
not respond to requests for comment.
Other
"China Inside" models could be coming soon. Ford is seeking a Chinese
partner to provide EV platform technologies, said two people with knowledge of
the matter. CEO Jim Farley has frequently tested Chinese EVs and recently
praised Xiaomi's SU7 electric sedan.
Volkswagen
has expanded plans to develop China-dedicated models of all fuel types based on
platforms co-developed with Xpeng, using the latter's layout designs of
electronics and software.
Analysts
say legacy automakers typically struggle to develop agile EV systems that can
be rapidly updated, due to complicated organisational structures.
That is
why Volkswagen wants to see if Xpeng's EV technologies can complement or
replace Volkswagen's own, said Yale Zhang, managing director at Shanghai-based
consultancy AutoForesight. If it works in China, Volkswagen could apply the
strategy globally, Zhang added.
A
Volkswagen China spokesperson told Reuters its collaboration with Xpeng was
focused on China for now.
Xpeng's He
Xiaopeng has said the two automakers want to expand their partnership beyond
China. That would boost Xpeng's revenue without building plants overseas, said
Autodatas' Wang.
Oliver
Wyman analyst Marco Santino said traditional automakers could use
"firepower" of fierce Chinese EV competition to jump ahead of the
development curve.
"You
get a much more quality-proof product in the market in a shorter
timeframe," Santino said.
MORE CHOICE?
Inspired
by Tesla, China's EV makers have developed modular platforms that cut costs and
accelerate development and lower barriers of entry. "They are quick
learners from Tesla," said Forest Tu, a former executive at Chinese
battery giant CATL who founded consulting firm Mapleview Technology.
That
advantage is now big enough to sustain "licensing and royalty
service" as Chinese EV makers expand overseas, Tu said.
CATL
adopted that approach with Ford, licensing its technology for a battery plant.
Exporting
Chinese technology could help less-industrialized countries build their own
"national EV brands," Tu said.
Abu
Dhabi-based CYVN Holdings, a strategic investor in Nio, has developed its own
premium EV model using the Chinese EV maker's chassis and software.
CYVN
bought British sports car maker McLaren in April and now plans to sell its EV
using the McLaren brand, according to two sources familiar with the matter. But
future models will incorporate far more McLaren "DNA" and less
Chinese technology, one source said.
Nio
declined to comment. CYVN did not respond to a request for comment.
CATL's new
EV chassis, meanwhile, will allow consumers to "decide what an EV looks
like, rather than having giant automakers decide what to sell," its
executive president Hu Guoliang said.
CATL said
it would ramp up chassis production in the next three years after signing with
several domestic automakers. Its Bedrock Chassis debuted in Europe this week at
the IAA Mobility show in Munich.
Whether
the mutual benefits of China's EV technology last over the longer-term,
however, remains a key question.
Former
Aston Martin CEO Andy Palmer said while there were savings in R&D,
automakers should avoid over-reliance on third-party technology. "In the
long-term you're screwed because you're just a retailer," said Palmer.
Oliver
Wyman's Santino said the big risk for traditional automakers is that using
someone else's technology means "your capability to differentiate your
brand is really limited." By blending in their own technology, automakers
can "limit the risk," Santino added.
















