#2-8 Summary of the Chinese EV market and OEM strategies.

The Chinese electric vehicle (EV) market continues to establish its position as a global leader, driven by strong government support and domestic innovation1. The impetus for this growth is shifting from initial subsidies towards more complex factors such as technological capability, supply chain management, and global competitiveness1.The market is highly dynamic with intensifying technological development competition1. Geopolitical considerations, the need to secure supply stability, and cost reduction pressures are driving Chinese OEMs to accelerate procurement from domestic suppliers (localization)2.... Specifically for critical components like SiC power devices, targets are set to significantly increase the domestic procurement ratio by 20302....However, Chinese OEMs are also continuing to cooperate with global suppliers to secure highly specialized technologies and diversify supply sources2.... This indicates a pragmatic procurement approach that prioritizes practicality rather than a pure localization drive2....Key Chinese OEMs have distinct supplier strategies2. BYD is characterized by a highly vertical integrated model, internalizing production of major components such as batteries (Blade Battery), semiconductors (BYD Semiconductor), motors, and e-drive systems1.... Li Auto is increasing its reliance on Chinese domestic suppliers for many components due to the need for flexibility and customization that international suppliers cannot meet2.... Other OEMs like Geely, NIO, and SAIC Motor employ a mix of domestic and international suppliers, forming strategic collaborations and joint ventures for batteries, SiC devices, and other components2....The rise of domestic Tier 1 suppliers like CATL and Hesai Technology, which have gained international competitiveness, is a key strength3.... This growth of domestic suppliers, who offer flexibility and rapid customization to meet the demands of the fast-evolving Chinese market, creates a virtuous cycle that enhances the competitiveness of the entire Chinese EV ecosystem3.... This trend prompts international mega-suppliers to localize R&D and production or build deeper partnerships with Chinese OEMs3....Several complex factors determine the competitiveness and future growth of the Chinese EV marke.

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