The global market for electric vehicles is dominated by China. The nation has great control over the EV battery supply chain and last year accounted for 57% of all EV sales worldwide.
But that power is not unchangeable. As other nations increase their investments in the manufacturing of EVs, batteries, and minerals in order to lessen their reliance on China, competition is intensifying. Additionally, China’s EV business has its own unique strategic flaws.
Chinese EV chip shortage
The restriction on chips is well recognised. Long-term efforts by China to create a domestic semiconductor sector to reduce its reliance on imported chips have met with varying degrees of success. Washington’s extensive limitations on chip technology exports to China have hindered that attempt. And EVs require a lot of chips—likely twice as many as a car powered by an internal combustion engine.
In reaction to US export limitations, major Chinese EV manufacturers are apparently working feverishly to develop their own vehicle chips, but they are unlikely to do so in the foreseeable future. Vice President of the China Automotive Technology and Research Center Wu Zhixin estimates that China is at least five years behind major international competitors in the auto chips.
The EV software’s several layers
Is it conceivable that China, which already has influence over a number of EV supply chain segments, could suffer a setback in the EV software market?
Miao’s comparison of Android and iOS to EV software is limited, according to Andrew Grant, head of intelligent mobility at BloombergNEF, because EV software has many more layers than smartphones.
Phones and cars are connected by the top layer. The infotainment layer, which is one layer beneath, handles issues like the touch screen in the automobile, route planning, and the air conditioning. The “mission essential layer,” which orchestrates the EV’s numerous chips and makes sure the vehicle can operate as intended, comes next.
According to Grant, Miao is probably referring to these latter two levels as the regions where Chinese automakers must gain market share. In the end, it’s unlikely that any EV will use just software produced by a single nation or corporation.