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SHANGHAI (Reuters) – The Shanghai auto show is set to welcome over 70 automotive brands, showcasing more than 100 newly launched or updated models, highlighting the fierce competition within the electric vehicle (EV) and hybrid sectors. This event, running from April 23 to May 2, will spotlight prominent Chinese manufacturers such as BYD and Geely, alongside established international players including Volkswagen, Nissan, Toyota, and General Motors’ Cadillac line.
In the wake of an ongoing price war among consumers, manufacturers are now pivoting their focus towards next-generation automated driving features, marking a new battleground in the race for market share and profitability.
However, recent government interventions have altered the promotional landscape. After a tragic incident involving a Xiaomi electric sport sedan that resulted in three fatalities, authorities have intensified scrutiny over marketing claims, particularly those related to “smart” or “autonomous” driving technologies.
The Xiaomi SU7’s crash, which occurred shortly after the driver attempted to regain control from its assisted-driving system, has cast a shadow over the industry. Despite its popular debut at last year’s Beijing auto show and subsequent sales of over 215,000 units, the incident has prompted a reevaluation of how companies communicate the capabilities of their technologies.
In light of the regulatory landscape, brands like BYD and Zeekr are adjusting their marketing strategies. There is now a greater emphasis on highlighting the importance of driver vigilance rather than overstating automated driving capabilities.
Within this competitive arena, BYD continues to innovate. The company has recently begun offering its “God’s Eye” driver-assistance system as a complimentary feature across its lineup, including lower-priced models, significantly raising the stakes for its competitors.
Analysts have noted that BYD is employing a similar strategy with its driver-assistance technology as it did with its electric vehicle market entry—using scale to drive down prices and pressure its rivals.
In February, Chinese regulators mandated that automakers must obtain consent for software updates related to driver-assistance systems, affecting companies such as Tesla. This regulatory shift prompted Tesla to halt a temporary promotional trial of its “Full Self Driving” software and rebrand it as “intelligent assisted driving.”
Tech titan Huawei has joined the conversation, launching a campaign that advocates caution in the use of its assisted-driving systems following the recent tragedies in the sector.
During a recent event promoting Huawei’s collaboration with Chery on their Luxeed brand, actress Liu Yifei urged consumers to prioritize safety while utilizing advanced technology.
Amid these developments, Zeekr is preparing to introduce a new model featuring Level 3 driver-assistance technology, capable of hands-free driving under certain conditions, while also shifting its focus to hybrid vehicles and battery technology at the auto show.
Alongside these advancements, Chinese authorities are tightening regulations regarding EV battery standards to mitigate fire and explosion risks, showcasing the dual focus on safety and innovation.
TARGETING TESLA
Despite regulatory hurdles, China’s “new energy vehicle” sector continues its robust expansion, with electrified vehicles now representing over half of all new car sales in the country—well ahead of figures in the United States and Europe. This marks a significant acceleration of a goal initially set for 2030.
A notable highlight of this year’s show is the introduction of numerous electric crossovers directly competing with Tesla’s Model Y, intensifying challenges for the American EV manufacturer, which has seen its market share in China decrease from 15% in 2020 to 9% in early 2023.
Tesla’s market performance has also declined globally amid heightened competition and backlash against CEO Elon Musk’s controversial public persona. Following an unmet expectation for new launches in recent Shanghai auto shows and slow product development compared to its Chinese rivals, Tesla faces significant pressure.
With several upcoming releases, including advanced models from brands like Xpeng and Zeekr that promise better battery efficiency and features at competitive price points, the competition looks set to escalate. Xiaomi’s absence this year at the auto show after previously anticipated product announcements speaks to the shifting dynamics, with many analysts now dubbing several new Chinese crossovers as potential “Model Y killers.”
Independent automotive expert Lei Xing described the situation as “a tsunami of pressure” on Tesla’s flagship model, emphasizing that the competition is not singular but rather a collective challenge from multiple promising vehicles.
(Reporting by Victoria Waldersee and Zhang Yan in Shanghai; Additional reporting by Qiaoyi Li in Beijing; Editing by Brian Thevenot and Jamie Freed)
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