Great Wall Motors Chairman: China's Electric Vehicles Lack Core Technology

On May 28th of this year, Great Wall Motors Germany GmbH held a company-wide meeting, announcing the closure of its European headquarters in Munich, Germany. The company also stated that all employment contracts would be terminated by August 31st, and expansion plans would be put on hold. (Screenshot from the internet)

October 24, 2024 — Electric vehicles (EVs) have been a key industry for the Chinese Communist Party to promote and develop. However, it faces an embarrassing reality: the core technology still heavily relies on Western countries. Recently, Wei Jianjun, Chairman of Great Wall Motors, stated that Chinese electric vehicles lack core technology, with components such as motors, electric control systems, and chips all being imported from abroad.

Wei Jianjun: Chinese Electric Vehicles Lack Core Technology

On October 15, Wei Jianjun stated in an interview with Sina Finance, "In terms of traditional internal combustion engine technology, we are definitely not as good as foreign brands. When it comes to electric vehicles, it's not that others don't have the technology; they just don't have the same strategic focus."

He then listed the key areas where China is lacking in core technology.

"Our power batteries in China? The original invention came from the U.S., originated in Japan, and was developed further by South Korea. The motors, electric controls, and chips we use are all from the U.S.," Wei remarked.

Similarly, Sony-Honda CEO Yasuhito Shigeyama has expressed a critical view of China's electric vehicles.

At the end of 2023, he stated, "Chinese electric cars have no real technology; they just focus on making flashy displays."

Wei Jianjun's comments quickly sparked widespread debate within China's automotive industry.

A search reveals that, even though over a week has passed since the comments, there are few public objections from experts, authoritative figures, or well-known industry insiders. One of the few dissenting voices comes from Xiang Ligang, CEO of CCTIME, and a commentator for CCTV and Phoenix TV.

Industry consensus holds that core technologies for electric vehicles consist mainly of three key components: electric control systems, motors, and batteries. The electric control system itself includes automotive-grade chips and other essential hardware.

Foreign Companies Dominate the Electric Control Hardware Market

In April 2024, Xinmin Weekly pointed out in an article that hardware components of key control modules such as the Battery Management System (BMS), Motor Control Unit (MCU), and Vehicle Control Unit (VCU) are primarily controlled by foreign companies.

For example, the voltage acquisition chips and other components in BMS integrated circuit boards are mostly monopolized by companies like Maxim Integrated (U.S.), Texas Instruments (U.S.), NXP Semiconductors (Netherlands), and Analog Devices (U.S.).

Similarly, in MCUs, the core power semiconductor IGBT is dominated by international giants such as Infineon (Germany), On Semiconductor (U.S.), Mitsubishi (Japan), Fuji Electric (Japan), Littelfuse (U.S.), and STMicroelectronics (Italy/France).

As for VCUs, apart from a few large domestic manufacturers that have developed their own systems, most are controlled by companies such as Bosch (Germany), Continental AG (Germany), Delphi (U.S.), and Nidec (Japan).

China Holds Only 5% of Core Patents in Electric Vehicle Motors

Suzhou Jutianhe Technology, a company specializing in the manufacturing of electric vehicle components, stated on its website that China holds only 5% of the invention patents for core motor technology, which is critical in the electric vehicle sector. In contrast, countries like the U.S., Europe, and Japan hold over 90% of these patents.

In terms of key components, the gap between Chinese automakers and their international counterparts is even larger.

The article pointed out that although China has the richest rare earth resources globally, the advanced technologies for refining and processing neodymium iron boron magnets are held by Japan and Germany. For silicon steel sheets, China can produce them at 0.35mm thickness, but Japan has achieved 0.27mm, and China still relies on imports for high-performance silicon steel sheets. Additionally, the gap in high-speed bearings is even more significant, as nearly all high-speed motor bearings are imported, with virtually no domestic alternatives in use.

Wang Yao, Assistant Secretary-General and Director of the Technical Department of the China Association of Automobile Manufacturers, noted that "China's key technologies, such as high-efficiency, high-density drive motor systems, still lag behind international standards."

Lithium Batteries Invented by the U.S. and Japan; China Trails Japan in Solid-State Batteries

Wei Jianjun explained that the original invention of the lithium battery came from the U.S., and it originated in Japan.

In 2019, the Nobel Prize in Chemistry was awarded to American scientist John B. Goodenough, British scientist M. Stanley Whittingham, and Japanese scientist Akira Yoshino for their contributions to the development of lithium-ion batteries. Yoshino is credited as the inventor of the modern lithium-ion battery.

China also lags behind Japan in the development of advanced solid-state batteries. Toyota announced in June 2024 that its solid-state batteries will begin mass production by 2026, with expansion planned for 2027 and 2028, and large-scale production expected after 2030.

Vehicles equipped with these solid-state batteries are projected to achieve over 1,000 kilometers of range and offer 10-minute fast charging.

As for China's two largest battery manufacturers, CATL’s Chief Scientist Wu Kai revealed in April 2024 that their solid-state battery technology maturity is around a level 4 on a scale of 1 to 9. CATL aims to reach levels 7 to 8 by 2027, which would enable small-scale production, though large-scale production may still face cost-related challenges.

BYD’s situation in solid-state battery technology is not much different from CATL’s.

At the 2024 World Power Battery Conference held in early September, BYD's Director of Battery Technology Sun Huajun said that large-scale production of solid-state batteries is still a long way off. "We are still in the process of transitioning from early laboratory work to industrialization," he said, noting that "there are still many issues with large-scale production, including engineering and interface challenges."

90% of China’s Automotive Chips Are Imported

Luo Daojun, Deputy Director of the Components and Materials Research Institute at the Ministry of Industry and Information Technology (MIIT), noted in July 2024 that less than 10% of automotive-grade chips are produced domestically. A 2023 report from the Development Research Center of the State Council revealed that China’s dependency on imported automotive chips is as high as 95%, with 99% of computing and control chips and 92% of power and memory chips being imported.

Former Minister of MIIT Miao Wei once stated that China’s electric vehicle industry "lacks chips and lacks soul," and companies "are just whining."

The aforementioned article in Xinmin Weekly pointed out that the longstanding "chip shortage" problem plaguing China's auto industry will remain a significant hurdle in the future.

At the "7th China Electric Vehicle 100 Forum," then-Minister of Science and Technology Wang Zhigang stated that China’s electric vehicle industry faces four major issues: unclear basic technologies, prominent industrial bottlenecks, lack of breakthroughs in core technologies, and insufficient application verification platforms, conditions, and scenarios.

24 Chinese Automotive Brands Have Gone Bankrupt

Wei Jianjun also mentioned that over the past decade, 24 domestic car brands have gone bankrupt, and this trend may continue.

According to incomplete statistics, by the end of 2023, only 40 electric vehicle companies were still operating in China, a reduction of over 90% from the peak in 2018.

From 2020 to 2023, several new energy vehicle companies, including WM Motor, Aiways, Enovate, Byton, Youxia, Yudo, Seres, Levdeo, Hanlong, Lifan, Bordrin, Saleen, and Qiantu, went bankrupt. Other companies, such as HiPhi and Hozon Auto, are still struggling on the brink of survival.

Wei emphasized that unregulated price wars are a key factor behind the collapse of these brands. The consequences extend beyond the disappearance of brands, potentially causing a significant devaluation in the second-hand car market, a collapse in after-sales services, and long-term losses that could last six to seven years.

Data from the China Passenger Car Association shows that price wars have resulted in a loss of 138 billion yuan in the Chinese market in the first eight months of 2024.

Currently, Chinese automotive brands lack global brand power, as many Chinese automakers focus on selling products rather than building brands, limiting their ability to generate premium value.

In August 2024, Wei publicly criticized the chaos in China's auto industry, stating, "When will the short-sighted behavior of some car companies end? Fake cards and cheats—can Chinese car companies really progress this way?" He emphasized that companies without the ability to generate profits or "self-sustain" will not go far.

On May 28, 2024, Great Wall Motors Germany GmbH announced the closure of its European headquarters in Munich, ending all employment contracts by August 31, and halting expansion. This marks the first time a Chinese new energy vehicle company has closed its European headquarters.

Edited by: Sun Yun