• Possible opportunities for Western auto technology in China include software-defined vehicles, centralized computing, and automotive OS development
• This year saw EV sales in China account for more than half of the market share for five consecutive months
• China’s BYD has become the largest EV brand globally, and others, such as Geely, are growing both domestically and overseas

China’s EV industry has flourished over the past decade. It is now the global leader in sales and production, while some of its more than 100 EV producers have begun to find success in other countries. Opportunities here are broad, ranging from supply partnerships to consulting. The most significant obstacle standing in the way of many Western automotive enterprises is market entry. Tom Ward, Managing Partner – China, shares insights and identifies potential areas of interest for overseas companies.

China reached what is perceived to be the electric vehicle (EV) tipping point earlier this year, when the China Association of Automobile Manufacturers (CAAM) announced that sales accounted for more than half of the market share for five consecutive months. In other words, there is no going back.

To put this into context, EV sales in Norway surpassed the 50 percent mark in 2020. Four years later, the figure reached 90 percent. The significant difference between Norway and China, however, is size. China produced approximately 12 million EVs in 2024, with 11 million being sold domestically. Additionally, Chinese manufacturers are expanding their production capabilities globally.

It is undoubtedly a far cry from 2011, when some dismissed Chinese EV players as dreamers rather than serious competitors. Last year, BYD overtook Tesla as the world’s largest EV manufacturer by revenue, while several other companies have experienced massive growth over the past decade.

Several Chinese EV brands are now facing increased competition, both domestically and internationally. This, in turn, has created opportunities for Western auto technology in China.

Locating potential opportunities for Western auto technology in China

Chinese EV producers excel in automated production efficiency. Additionally, designs have improved drastically over the past decade, an area seen as a possible hindrance to adoption in the early 2010s.

Western firms continue to excel in areas such as software-defined vehicles, centralized computing, and automotive operating system (OS) development. These all present opportunities to organisations with proven track records.

For example, systems management software that coordinates communication between hardware and applications is in demand. Driver assistance, infotainment, and other embedded functions still trail behind what’s available elsewhere in the world.

Another area of potential is in safety-critical technologies, which must comply with international automotive standards such as ISO 26262. These systems support advanced driver-assistance systems (ADAS), autonomous driving, and real-time operating systems (RTOS) for essential vehicle functions, including braking and steering.

Western companies also have an advantage in infotainment and connectivity software, offering user-friendly interfaces for navigation, music, communications, and voice assistants. These features are increasingly in demand both in China’s domestic market and for export.

Growing market with global reach

China’s EV sector continues to expand rapidly, strengthening its global competitiveness. Leading manufacturers such as BYD and Geely have streamlined their supply chains and accelerated innovation, outpacing many Western brands in markets like Europe, including Tesla and Volkswagen.

However, the popularity of Chinese EV brands outside of the country can often go overlooked. In Australia, BYD became the second largest brand in terms of sales last year, while Great Wall Motors (GWM) entered the top 10.

Norway’s decision not to impose tariffs on Chinese EVs, unlike the EU and US, has allowed Chinese brands to gain a combined 10 percent market share there. The milestone is significant considering they first entered the country in 2020.

Numbers from the Korea Automobile Importers & Distributors Association found BYD’s Atto 3 was the best-selling imported electric vehicle model during April of this year. It was the first time a Chinese brand held the distinction.

Southeast Asia is where Chinese EV manufacturers are seeing the most success. The combination of lower prices and perceived quality has made them popular across the region. For instance, the top five highest-selling EV brands in Thailand last year came from China.

Ultimately, there are positives to take from this progress, but tariffs and manufacturing origin issues loom large over the global ambitions of Chinese EV manufacturers. 

Bumpy road ahead?

It does appear the Chinese EV industry is facing some headwinds that could reshape the sector. On the domestic front, consolidation is considered likely as the government looks to end price wars and dangerously high levels of competition. This may lead to production declines.

Looking abroad, geopolitical issues and trade concerns could slow down the EV export market. A handful of Chinese manufacturers have already begun moving production overseas in an attempt to avoid these problems.

Given how far ahead China is in the EV race, it should comfortably remain in the lead for the foreseeable future. The situation is one to monitor for foreign companies considering market entry but should not be viewed as a barrier.  

The next step

Tapping into opportunities for Western auto technology in China can be daunting. That being said, the country is open to partnerships and new innovations. Many firms understand the advantages of incorporating overseas products.

At Asian Insiders, we leverage decades of experience to help Western companies evaluate, enter, and succeed in this dynamic market. Our in-country knowledge ensures the best fit is identified and places you on the road to success.

Want to learn more about current opportunities for Western auto technology in China? Please get in touch with Tom Ward, Managing Partner – China at Asian Insiders, at [email protected], or Jari Hietala, Managing Partner, at jari. [email protected].