"The time of China copying is over", the marketing director of German carmaker Volkswagen in the Asian country, Jochen Sengpiehl, told Lusa. "Innovation is happening here", he added.

The emergence of Chinese brands, some founded less than a decade ago with their sights set on the electric segment, promises to have a "great impact" on the industry, warned Carlos Martins, who runs a factory of the Portuguese automotive components company Sodecia in northeast China.

Carlos Martins, who has lived in the country for ten years, highlighted to Lusa the "completely different" speed of action of local manufacturers, in contrast to their European counterparts, which have "very heavy" organisational structures and take "a long time" to implement changes.

Last year, Volkswagen's ID series electric models did not go beyond a 3% market share in the electric segment in China, which makes up 50% of the German manufacturer's global sales.

Electric vehicles accounted for 24% of new car sales in China in 2023, according to industry data. If hybrids are included, the share of new energy vehicles in total sales reached 36%.

Volkswagen is preparing to launch new models in partnership with Xpeng, the Chinese electric car brand for which it paid 630 million euros for a 4.99% stake in 2023.

"We can no longer do everything alone", admitted Sengpiehl.

At issue is the reconfiguration of the automobile by Chinese technology companies Huawei, Xiaomi or Baidu from a private means of transport powered by an internal combustion engine to a technological device powered by electric energy.

"Creating a Mobile Home" is, for example, the motto of Li Auto, the Chinese manufacturer whose vehicles are equipped with gesture control technology, a karaoke system, electrical outlets, a refrigerator or a 17-inch OLED panel where you can watch movies or play games.

"Traditional brands are bringing analogue toys to a digital playground", Tu Le, the director of the consultancy Sino Auto Insights, described to Lusa. The title of a report published by The New York Times is equally emphatic: "For China’s Car Market, Electric Isn’t the Future. It’s the Present".

Chinese dominance also extends to the battery industry. Chinese companies CATL and BYD are the world's largest manufacturers. Beijing also maintains strong control over access to essential raw materials.

This is the result of more than a decade of subsidies, long-term investment and infrastructure spending. "It took a focused industrial policy, a lot of patience and a lot of capital", Tu summed up.

In 2014, Chinese leader Xi Jinping said that the development of electric cars was the only way for China to become a "powerhouse in the automotive sector", which was included in the five-year plans outlined by the Chinese Communist Party and, in the following years, hundreds of electric vehicle brands were created in the country.

This has led to excess production capacity and a financial sustainability problem: more than 60% of Chinese electric vehicle manufacturers sell less than 10,000 cars per year.

Due to the fierce price war underway, only the American Tesla and BYD manage to remain profitable, which should lead to a consolidation of the sector in the coming years.

"Nowhere else in the world is the transformation of the automotive industry as rapid as in China", said Oliver Blume, Volkswagen's CEO, at a press conference at the China Motor Show.

"This market has become a kind of high-performance centre for us. We have to work harder and faster to keep up", he said.

Read Also: It was with this car that Villas-Boas started his dream garage (Portuguese version)