Electric vehicles have long been a key industry supported and developed by the Chinese Communist Party, but what’s embarrassing is that the core technology still heavily relies on Western countries. Recently, Wei Jianjun, the chairman of Great Wall Motors, stated that Chinese electric cars lack core technology, with components like motors, controllers, and chips being imported from abroad.
On October 15th, Wei Jianjun told Sina Finance, “In terms of traditional internal combustion engine technology, we are definitely not as good as foreign brands; and if we talk about electric vehicles, others do have the technology, but just lack the strategic vision.”
He then pointed out the core technologies that China lacks. “The original invention technology of our power batteries in China is from the US, originated in Japan, and made popular by the Koreans,” he stated. “Components like motors, controllers, and the chips we use are all from the US.”
The President of Sony- Honda, Nagakawa Izumi, also shares a similar view on Chinese electric vehicles. At the end of 2023, he mentioned, “Chinese electric cars have no technology to speak of, only focusing on fancy displays.”
Wei Jianjun’s remarks immediately sparked widespread discussions within and outside the Chinese automotive industry.
Upon research, it was found that despite over a week passing, there are few public objections from experts, authorities, or well-known figures within the industry against Wei Jianjun’s viewpoint. Currently, the only voices found opposing were from Xiangliang Net CEO, a commentator from CCTV and Phoenix TV, Xiang Ligang.
Generally, the industry believes that the core technologies of electric vehicles mainly include control systems, motors, and batteries, with the control systems also encompassing vehicle-grade chips.
An article in Xinmin Weekly in April of this year pointed out that in terms of hardware modules for Battery Management Systems (BMS), Motor Control Units (MCU), and Vehicle Control Units (VCU), foreign companies mostly dominate.
For instance, the article mentioned the core voltage acquisition chips on the BMS integrated circuit boards are mostly monopolized by companies like Maxim and Texas Instruments from the US, NXP from the Netherlands, and ADI from the US.
Furthermore, in the MCU, core power semiconductors like IGBT are mostly held by international giants like Infineon from Germany, On Semiconductor from the US, Mitsubishi and Fuji from Japan, Littelfuse and STMicroelectronics from the US.
As for VCU, apart from a few large-scale domestic manufacturers, most are held by Bosch and Continental AG from Germany, Delphi from the US, and NIDEC from Japan.
Jutianhe Technology, specializing in electric vehicle components manufacturing, stated on their website that China only holds 5% of the total patents reflecting the level of motor drive technology, while countries like Europe, the US, and Japan hold over 90%.
In terms of core components, Chinese auto companies face even greater disparities. Though China boasts the world’s richest reserves of rare earth resources, the cutting-edge technology for extracting and processing neodymium iron boron rests in the hands of Japan and Germany. While China can reach 0.35mm in silicon steel sheets, Japan has already achieved 0.27mm, and high-performance silicon steel sheets still rely on imports. The gap is wider in high-speed bearings, where almost all high-speed motor bearings rely on imports, with hardly any domestically produced bearings used.
Wang Yao, the Secretary-General Assistant of the China Association of Automobile Manufacturers and Minister of the Technical Department, pointed out that key technologies like efficient and high-density drive motor systems in China still fall short compared to international advanced levels.
Wei Jianjun mentioned that the original invention technology of lithium batteries comes from the US, originating from Japan.
In 2019, the Nobel Prize in Chemistry was awarded to US scientist John B. Goodenough, British scientist M. Stanley Whittingham, and Japanese scientist Akira Yoshino for their contributions to the development of lithium-ion batteries, with Yoshino being the inventor of modern lithium-ion batteries.
Regarding advanced solid-state batteries, China lags behind Japan. Toyota announced in June this year that they expect to officially mass-produce solid-state batteries in 2026, with gradual expansion in 2027 and 2028, and significant production to commence post-2030.
Vehicles equipped with solid-state batteries are expected to achieve over 1000 kilometers of range and 10-minute fast charging.
How are the two major battery manufacturers in China doing? In April this year, NINGDE Times Chief Scientist Wu Kai revealed that the company’s solid-state battery technology maturity is at level 4 (on a scale of 1-9).
NINGDE Times aims to reach level 7-8 by 2027, meaning they can produce solid-state batteries in small batches, but mass production may still face issues like costs.
In terms of solid-state battery technology, BYD and NINGDE Times are not far apart.
At the 2024 World Power Battery Conference in September, Sun Huajun, the Battery Technology Director at BYD, stated that in terms of large-scale production of solid-state batteries, BYD still has a long way to go. He pointed out, “Currently, we are still in the process of transitioning from early-stage laboratory to engineering for solid-state batteries.” However, he admitted that massive production of solid-state batteries still poses numerous challenges, including engineering and interface issues.
In July, Luo Daojun, Deputy Director of the Electronic Five Institute of Components and Materials Research Institute under the Ministry of Industry and Information Technology, noted that currently, less than 10% of vehicle-grade chips are self-sufficient, with a report from the Market Economy Research Institute of the State Council’s Development Research Center in 2023 revealing that China’s reliance on foreign automotive chips reaches 95%, with 99% for computing and control chips, and 92% for power and storage chips.
Former Minister of the Ministry of Industry and Information Technology Miao Wei once said that China’s electric vehicle industry is “lacking core technology,” with companies just “making noise” if they do not have the ability to create profits.
The above-mentioned article in Xinmin Weekly pointed out that the long-standing problem of “lacking core technology” in the Chinese automobile industry will still be a difficult hurdle to overcome in the future.
During the “Seventh China Electric Vehicle One Hundred People Forum,” Wang Zhigang, the former Minister of the Ministry of Science and Technology of the Communist Party of China, mentioned four major problems existing in China’s electric vehicle sector. These include not having a clear understanding of foundational technologies, significant industry bottlenecks, the failure to breakthrough core technologies, and the lack of application verification platforms, conditions, and scenarios.
Wei Jianjun also noted that over the past decade, 24 car brands in China have gone bankrupt, and this trend is likely to continue.
According to incomplete statistics, by the end of 2023, there were only more than 40 electric vehicle companies still operating normally, a decrease of over 90% compared to the peak in 2018.
During 2020-2023, in just four years, several new energy vehicle companies like Weimar, Ai Chi, Tianji, Bitang, Youxia, Yundo, Zhiyou, Laiding, Hanlong, Lifan, Bofu, Sailin, and Qiantu have gone bankrupt. Meanwhile, struggling companies like Gaohe Motor and Hechuang Motor that have hit snags are teetering on the brink.
Wei Jianjun emphasized that the disorderly price war is a significant reason for brands going bankrupt, with consequences extending beyond just closures to potential substantial devaluation in the used car market, collapse of maintenance services, long-term incalculable losses, and lasting effects up to six to seven years.
Data from the China Association of Automobile Manufacturers shows that the price war has caused a loss of 138 billion yuan in the Chinese market in the first eight months of the year.
Currently, Chinese automobile brands lack global brand strength, as many Chinese automakers focus more on selling products rather than building strong brands, leading to limited brand premium capabilities.
In August this year, Wei Jianjun publicly pointed out the chaos in the Chinese automotive industry. He questioned, “When can some car companies stop their hasty and deceitful practices? Using fake licenses and deception, can Chinese car companies still progress?” He stressed that without the ability to generate profits, businesses cannot go far.
On May 28th, Great Wall Motors Germany GmbH announced the closure of its European headquarters in Munich, terminating all employment contracts by August 31st, suspending expansion, making it the first among Chinese new energy vehicle companies to close their European headquarters.