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- [00:01]
A
Welcome to the new books network. This is the nordic asia podcast.
- [00:14]
B
Welcome to the Nordic Asia Podcast, a collaboration sharing expertise on Asia across the Nordic region. My name is Julie Yuwen Chen, professor of Chinese Studies at University of Helsinki, Finland. Joining me today to talk about Chinese electric vehicles, the EVs is Matthew Gray, who is Senior Advisor to the United Nations. Before joining the un, Matthew worked at Morningstar, a leading global investment, research and financial services firm, where he specializes in Asia's emerging markets. As far as I understand, he is fluent in Russian and he is studying Chinese and perhaps he has other linguistic skills that I'm not familiar with. I think it's time that I welcome Matthew and let him introduce himself to the audience on Northeast Asia Podcast. And after that, we can proceed to discuss Chinese EV cars. Matthew, welcome.
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Well, thank you, Julie, for the introduction. Yes, I'm sitting here. I'm in Copenhagen. I'm at the United Nations. This is our. One of our European headquarters, which we also oversee parts of Central Asia. Before, yes, very much so. I was working at Morningstar in investor stewardship. So that's connecting institutional investors, that's a lot of the world's capital, to emerging markets. Listed companies looking really much at sustainability, where, you know, the energy transition is more and more important. I guess you could say I'm at this, the intersection of investments, emerging markets, you know, multilateralism, corporate sustainability, all of that. A bit more of my background related to, to China as this is an Asia podcast. I've actually lived in eight of China's 14 bordering countries. So I've lived in everywhere from Tajikistan to Afghanistan, Myanmar, Russia, Nepal. I've also worked in Bhutan, Kazakhstan, India, a few other places as well. So I've always been looking at the world very much from a Chinese perspective as their imprint grew and then now more so as their, their technological expansion grows to their, to their near, their near neighborhood, which is a lot of Central Asia and also north and to the global South. But yeah, I was first in China. It's 2001. I go back very often. I was just there last month again for about three to four weeks. I was meeting with many of the listed companies, from Mining to Tencent to Psych Motors, and also the investors and also Fudan and Beijing, Dashui and Zhejiang University, keeping up to date with what's happening and as you do very much with this podcast. Yeah, building bridges between the two sides. And that's just something that, that I think your podcast does well and I'm looking to contribute to. So thank you very much, Julie. I hope my expertise will somehow be relevant to your questions.
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B
Welcome Matthew. I know you are multi talented but due to this episode I can only ask one specific area that I'm very interested in and that is the Chinese electric vehicles, the EVs. We all know that the EVs are expanding widely around the world. Where I'm more familiar with, I know in Southeast asia, brands like BYD, Great War, they already captured around 70% or more than 70% of the regional EV market as of early 2025. And I know you are more familiar with the European market as well as Central Asia. So I kind of would like to ask you to share your insight with us. Is the Chinese EV making progress in Nordic countries and Denmark where you are to begin with? Let's start with that and then we'll move on to other regions.
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A
I mean here in Denmark, I mean very, very simple. I would say about four or five years ago the only Chinese EVs we would see were in the buses. So the buses that were mainly made in Hungary. So we had Utong and we had byd. So that's where you could see a bit of exposure to the buses. And then BYD was making a bit of a footprint. And then we started to see little kind of pop up shops like Nio, the EV company that has, you know, the little, the little toy that sits there on the dashboard and talks to you. They were having these little pop up shops, they were coming out and then Xpeng built they, they came out with a showroom across from Tivoli. Tivoli is, is the very large amusement park here which inspired Disneyland and Walt Disney. So when you walk out of Tivoli and it's the most tourist visited site in all of Scandinavia, the first shop you see is actually Xpeng or Shipang. Slowly it started to become quite visible. There was Polestar of course, you know, which is, you know of Volvo, which is part of Geely. And then we started seeing, you know, MGs were more and more. And then we saw SAIC Motors was coming. But then we have different ranges of vehicles were coming. That's just here in Denmark I would say now there's, I count about 13 or 14 Chinese companies here. And then also the price point now is, is dramatically lower than the other one. So the amount of performance that you get out of the electric vehicle and also the range competes so dramatically with the, the BMWs and the, the ID4s from Volkswagen that a lot of the sal dramatically going up and also the, the range of the, the types of eb. So byd for example, they have, I think they sell five different cars here. Whereas in a countries in Central Asia you can find 20 different types of BYDs. So there's an increase of brand names coming. Also in Norway for example, this is just important. And I guess it all started in Norway about eight or nine years ago where there isn't, there still isn't one Chinese company that's in the top seven or eight for sales for EV companies. But that was really the test for Chinese EVs to see where they could come in. So it was a very permissible environment. There was a lot of EV charging stations also. It's not really, it's not a part of the eu, but it's still on the European territory. So it was a great way for them to test the demand again in a very kind of welcoming environment. And then also with the weather was very important also for testing the types of batteries that they're having. We always forget that about, about EVs is, you know, how they handle the cold very well. So if they were able to handle in Norway, they could kind of handle anywhere in Norway they've got it. But in Norway was the most impressive thing was again the NIO thing. NIO has these, it's called like the NIO House, right, Which is very much a, like a hosting, almost like a giant hotel lobby. And then NIO is, is quite important because they also have the battery swapping stations where you know, your EV parks itself in a. Into a station, it's, it's elevated. They change the battery in six or seven minutes and you get a battery that's charged. Norway I think is the only country that has those power swapping stations, the battery swapping stations. But again that was where it was really. They were bringing in a lot of their flagships. In a country like Finland right now, for example, there's increasingly more EVs but more on the brands that they know. So you have mg, which again is owned now by Site Motors, but then there's more coming into the market there. And also in Sweden we're seeing it a lot. Of course, all, all the countries have it in the EV buses. But then Sweden, they're actually entering now a bit more with larger trucks. So some Dongfeng are coming in as well. So these goes to challenge. To challenge Volvo. Yes, there's more visible on the street. That's more of a signal to a lot of the soft power. People have accepted the safety of driving with, with Chinese vehicles. Just the way that they're accepting to use Chinese mobile phones, to have Chinese toys like Leboo, to use Chinese apps like TikTok. So there's a much bigger story here across the Nordics that we're seeing a lot more Chinese brands around us, not just cars. But then the final point is just on the cars. It's not really about the cars, it's much more about the services that China's playing the long game. So the companies don't come here to make money now in the short term, they're playing the longer term investment where you have to sign up for these maintenance packages or the updates to the software. And that's something maybe we can discuss a bit later. But what the EVs actually represent is a much bigger picture of China exporting services, not just manufacturing or products. And it's actually passing a lot of their manufacturing GDP now. And EVs is just another way that they're doing it. And it's definitely happening across here. When you buy a car in Denmark, a Chinese ev, you sign up to a whole bunch of data platforms and then also your warranties and areas that are tied to that where you become really connected to a larger ecosystem for the long term play.
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Previously you mentioned a bit of the situation in Central Asia where there seems to have more diversity of Chinese EVs. So can you tell us a bit of a situation there? Maybe compare it with what you see here in the Nordic countries.
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Oh, Central Asia is an entirely different. Oh, wow. Okay. Whereas in the Nordics they've been coming in for say six to eight years. Very much drip feeding in. You can take that approach without much competition. Okay, I'll give you an anecdote. We I went to Tajikistan three years ago and I didn't see one Chinese ev. Of course, I saw lots of little, you know, Wuling and these tiny little cars, you know, little ones that are, you know, less than two meters long. You can buy them for three, $4,000 a four seater. I'm also. You see a lot of the heavy duty infrastructure trucks. But what happened? So that was when I went there three years ago. And then when I went there a few months ago, I counted 26 EV companies, which is remarkable. So going from zero to 26. And this is Tajikistan, everybody talks Uzbekistan, Kazakhstan and this is Tajikistan. The entire fleet of, of all the, the taxis, which are dirt cheap. I mean it's, it's less than a euro and you can go up to 5 or 10 kilometers. It's all three or four Chinese companies. So it's Aon it's BYD, it's Beijing Auto Group, Shanghai Auto Group, GAC as well. So the, the government and then also these investors have come in. The entire new fleet of electric vehicles that's all Chinese also. There's been, of course, since the war escalated and a lot of Central Asians have returned back to their country because they don't want to be conscripted into the war. You have a lot of these new drivers, so men in their, you know, 20s and 30s who've come back and then the only business they can really start up is they become taxi drivers. So when you're sitting in and yeah, I speak Russian and I speak Tajik, which is a derivative of Persian, you can talk to the taxi drivers and you can ask them, you know, how do you like your car? How do you like your car? And they are all very happy with it. I mean, I was there again a few months ago for a whole month and I probably sat in about 150 cars also going to the showrooms and going to where they sell all the cars. There's no second hand cars for sale because it hasn't reached the second hard market yet, which is fascinating. But again, 26 vehicles. And when you start figuring out the branding that they have, this is what's dramatically different from Europe is they're proud to have a car that's called Beijing. So it'll be Beijing Auto Group. So here it might be, you know, BA Bag, but there they'll actually say Beijing. They'll, they'll have the word Shanghai and they'll, they'll take that as like a, as a positive brand. Whereas we're not there yet. In the west, the soft power hasn't reached that where you can proudly say something is from China. There they use that even the word, you know, if you buy, if you buy a shirt and it's from Guangzhou, that means it's the highest quality. It's even higher than this is a T shirt, for example, if it comes from Guangzhou. What's very important also in Central Asia now is what's happened in the last six months is there's an electricity deficit, right? There's a lot more, people are buying air conditioners, a lot more domestic consumption. People are going up, you know, their economic ladder. There's a lot more industry across all of Central Asia. So electricity is becoming scarcer. And one of the areas which really hurts the EV market is people. Now this is in the last six months especially they can't, there's long lineups to charge Your car. Whereas we see lineups in the west or in Africa or in Bangladesh or Sri Lanka right now for fuel shortages, there's long lineups for charging your vehicle. This is something we never expected before. So this, this is a whole other area. And then what the. The irony is that a lot of the electricity companies are kind of joint ventures with Chinese. So they're now realizing, wait a minute, we have to underpin this fundamental foundation of the electricity provision because we have this whole other subset of energy we have to provide towards the transportation sector, whereas they were focusing primarily on domestic use and on industry. So that's something that is quite shocking. Yes. The kilowattage price is, is dramatically low, much cheaper than the petrol or a lot of them use gas in, in their gas canisters in their car. EVs are still very cheaper. There is not a secondary market. But the issue they're facing is very much on the charging and there being enough electricity available. The charging stations, they're prevalent now across Uzbekistan and Tajikistan. Kazakhstan is the ninth largest country in the world. So there's not set up between a lot of the cities. So it's a bit of a risk, especially in the winter to travel from one city to another. But the infrastructure is, is trying to keep up. But then they're also raising this, you know, what happens with the growth. So as the economy grows, people can now afford EVs and there's also grants coming in from private banks so people can lease also electric vehicles. But there isn't always the electricity available to do so. And home charging isn't really a thing yet. It's coming slowly, but that might be one of the solutions anyway. So that's, that's fascinating. I mean I could talk about it for ages about Central Asia. And a final thing about it is just a big difference with, with Europe is the, the secondary ones. So the workhorses, the, the car, the, the trucks that are on car, cars that are coming from. I don't know if you're looking at Alo Survoya or Geometry Bestoon. Let me just think of a few more. Jack Kai Chung. Like these types of brands that we haven't heard of in the west, they're all over Central Asia. So this is like the secondary or third tier. So the luxury and also the luxury ones are there like Avater, Zeekr, let me think Hyphe Li Auto, Fangcheng Bao, these. So the highest end of Chinese EVs, like the highest brands, the actual companies, they haven't reached the west yet, nor have the lowest ones, they're all visible in Central Asia. The middle tier are the ones that have reached, have reached Europe. That's Your, your, your BYDs, your Geelys, those guys. And even within that middle tier that's arrived here to Europe, we don't have the best of their product line. If BYD has 20 different models including half of them have fridges and heated seats in the back and massages in the back and a full sky roof and you know, side view mirrors that have heating voice activation for opening up any part of the car, turning on the ac. Those things are quite standard now for the mid tier Chinese ev, but none of that is available in the West.
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And why is this so? Matthew?
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Yeah, I have this debate with many different people. I originally thought that it was China, you know, being very proud and a bit nationalistic and saying look, we're not going to export our best stuff. And I think they do that across many different industries. If you go to China, you see that there's a lot better quality things there than we have in the West. Everything from shoes, I mean they have shoe companies there that the quality of the shoes and the sweater, the sporting apparel, the furniture is much better in China than the stuff that they export to the West. I thought that's what it was with cars. And it might be the case they might just be withholding it. They also do it with their semiconductors, with their refining technology, you know, very, very high up the technological lines here. And also even with Labubus with their little toys, they do not export the highest level of Labub, they keep them there. I still think that theory is quite true. But there's also another side, European protectionism. There's not, you know, 50 million people like you and me running around Europe who actually know the quality of Europe, of Chinese technology in, you know, consumables and the car market that most people don't know that that even exists in China. Europe is protecting against that. They have trade missions that go there. They've seen all of it. You have the CEO of Volkswagen or of Audi, they go there and they sit in the cars and they look at the price point and say, how can they have this technology that's twice as good of us, a quarter of the price. We cannot compete with this. So they obviously lobby their governments and say, do not let this in. So I think it's a two way street. China would love for it to come to a degree, but they don't want the best stuff to come. And on the other side Europe has to protect their markets. If it was real fair market economy and everybody was ascribing to WTO standards and tariffs were responsible, as they are with EVs. If we lived in that type of world, then China would absolutely obliterate the European car market and then it would go and go right after the North American car market and that would erase 10 to 15 million jobs just in the car markets alone in the automotive industry. And that would have a trickle down to steel, to aluminum, to technologies and all the way down. So this is a massive protectionism thing that everything that the west is criticizing China for, Europe is doing it three or four times fold I would say in terms of protecting open markets connected to that.
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I think you probably have noticed last year there were in several European media talking about the so called killer switches in Chinese ev. Basically I think there were some evidence found that like a Chinese manufacturer could actually remotely shut down those cars from China. Oh well, you know, I don't know how to think about this. Perhaps this is protectionism as well. But what is your view?
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Yeah, this goes with, you know, it was a very, you know, very attractive term for the media, right, like debt trap diplomacy, thucydides, trap overcapacity, you know, these things. Thankfully, this didn't gain too much traction simply because over 95%, I would say, of new, of new EVs are now connected to the Internet and most can receive remote software updates. I mean that's Tesla, Volkswagen, byd, all of them, they all operate as software defined vehicles now. So when people use a phrase like kill switch, I just think it creates the wrong image. This is not about somebody in Beijing, you know, pressing a red button and shutting down Europe's highways. I would say the real issue is more, I mean, if we can just kind of, you know, shift this a bit, is, is more about dependency. It's the, it's the dependency on software ecosystems, this cloud infrastructure, batteries, semiconductors, data governance and all of that during this geopolitical tension that we're at. And just to be fair, I mean this challenge, it's not uniquely Chinese. The modern connected vehicles across the industry, they carry similar cyber and systems risks, no question. So I would say Europe, I mean to Europeans that are listening, they should just avoid both the paranoia but also the complacency. I would say that Europe needs, they need standards, they need transparency, resilience and just more diversified supply chains. So the mark, the say, the smarter question here, Julie, is it's not really can China stop the cars? I'd Say the smarter question is really who controls the code? Who controls the updates, the data and the digital architecture over the next 20 years? And I think that answer is quite clear because I mean in the 21st century, the cars, they're not really about transportation really. I mean they're, I don't know how to say it, they're more like geopolitical infrastructure on wheels. And honestly, if I could just say a final word, just so you know, I won't come at this with a political angle, but the deeper anxiety, it's not really about the kill switch. I mean if you put that in quotation marks, I think Europe understands that the bigger issue is really strategic dependence. So after, you know, Russian gas Covid, supply chain, semiconductor shocks, all that, policymakers are just asking the broader question of just what happens when critical infrastructure, including this mobility issue, is what, when does it become too dependent on one external ecosystem? That's the real point. I would keep the debate. It's really about resilience, sovereignty in just this more fragmented world.
- [18:57]
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Moving from these geopolitical issues back to maybe more individual level. I'm thinking about the European pattern and the Central Asian pattern. Would it be possible? Also the consumers in Europe, they don't really appreciate those higher tier or luxurious EV car. I do a course every year with my students and of course students, they are probably not those people who will usually buy cars. But I asked them what they think about Chinese EV cars. I show them those fancy ones you can see online. And then they were saying, well, we don't really need those functions. Massage in the car, karaoke in the car. I don't know what you think about this. Are there consumer differences between the Central Asians and the Europeans?
- [19:37]
A
I think Europeans are satisfied with, you know, kind of 80% of the most advanced. But you also have to think about the number one selling car in China right now is, is the Wuling, right? It's, it's so tiny and it's not electric, it's not a hybrid. It goes about 85 kilometers, you know, just from a simple refill. It has little battery powered windows. That's the number one selling car in China right now. That's on one side of the Chinese scale where they're very practical. However, you also have Chinese that they, they almost nationalistically want to buy the most advanced car because that helps them kind of invest and also just they're curious about their own technology. So the most popular car when I was visiting all these showrooms was Xiaomi, Xiaomi, the phone company with the incredible. CEO, founder and amongst the generation of kind of 20 year olds, like 20 people in their 20s in China, the most excitement online, I mean this is on, you know, the Little Red Book and also on Douyin and all them. It's really about the most, the highest degree of technology. The Chinese cover all spectrums of that, whereas Europeans are kind of comfortably at this kind of 60, 80% is good enough. It's not about the karaoke, that's more of a cultural thing. But I think any European would love to have heated seats in the back for their children in the winter or to have a fridge inside the car or to have a, you know, windows that can stop UV rays at the touch of a switch so your children don't get face burned or you know, on the back on long road trips and these things. In China you can pay 2, $300 more and then you can get these things. Whereas Europe, what they do very commercial is they lump all of these additional features into one package. So it's actually very hard to buy one additional feature if you're like, oh, I want, I want, I would like a heated steering wheel. You can't just get a heated steering wheel in a car in Europe. You have to also get these big hubcaps attached, these heat powered side view mirrors. You have to get them part of like six different things. You can't just get modular things. So yes, the consumer interests are different, but that's not what's driving the demand or the, the sales of higher end EV cars into, into Europe. Definitely not. It's, it's, it's not it. If it was possible, if the European regulators and European companies had the confidence to allow China to come in, it would be a whole different ball game. But I know that the European carmakers do not have the confidence to compete with China one on one. Especially now that China is going very aggressively into one big area most people aren't talking about, which is hybrids. It's not about EVs. Now they're going to shift dramatically into hybrids and their batteries because the batteries that they have in China that they're not exporting and this is not just Seattle, the Catl, this is all of them. This is those that control the entire value chain, the whole vertical value chain and supply chain. The batteries that they have in China are a lot smaller, a lot lighter. The BYD as a new battery that they're not even charging extra for, it's six minutes and it can go up to about 12 or 1300 kilometers at an 80 or 90% charge and that's going to become standard. So they, they have technology that they're not exporting yet. And I think what's going to happen is they're going to flood the markets with it because the demand is going to become so big when prices are too high in Europe for petrol and everybody's going to start looking dramatically for EV solutions, they're going to put political pressure and saying, you need to give us access to cheaper mobility. And I think it's going to also happen with the freight industry. So when, when China starts getting more into, when the batteries get better at transporting cargo because they're not quite there yet for, for long distance at heavy weight, when the Chinese crack that nut and Europe, which most of Europe, every, everything is transported around Europe more or less by trucks. When they say, look, this is a way to keep those costs down in order to keep us buying our products and our commercial kind of addiction down, consumer addiction down, that's when they're going, there's going to be enough consumer turning into political to say, okay, we'll let the Chinese freight trucks come in. That's a whole other kind of another area for those who are looking at which, which pressure points or data points to watch. That's another one. As these diesel prices go up, EV is going to be increasing. The solution, when it overlays with the time frame of Chinese batteries getting enough to scale to handle the new freight industry, that's going to be higher and higher in demand.
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B
Thank you for sharing your insights with us, Matthew. You are listening to Nordic Asia Podcast with me, Julie Yuwen Chen and Matthew Gray at University of Helsinki.
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You have been listening to the Nordic Asia Podcast, Sam.