中国电动汽车：2025年专项调研（第三部分）十周年纪念特别版——中国与国际车企的电动汽车技术差距

China EV: Proprietary survey 2025, Part 3. 10-year anniversary,Bonus edition — China vs. International OEMs' EV technology gap Since 2015, we have conducted an annual survey to assess Chinese consumers' car-buyingintentions, brand preferences, and attitudes toward emerging technologies. This reporthighlights key reflections over the past decade. It also includes proprietary survey resultsfrom industry executives on the EV technology gap between Chinese and international OEMs. Eunice Lee, CFA+852 2123 2606eunice.lee@bernsteinsg.com Mika Fu+852 2166 4805mika.fu@bernsteinsg.com Loyal to value, not brands.Over the past decade, Chinese consumers shifted fromGerman and Japanese ICE vehicles to Chinese EVs, consistently prioritizing value—encompassing social status, comfort, energy efficiency, and advanced smart features—over brand loyalty or nationalism. Japanese brands had historically remained strong despitepolitical tensions, while Korean brands struggled to rebound. Chinese car buyers oncefavored German premium brands for social status and Japanese brands for their reliability,power, and comfort. Today, preference for Chinese brands is based on build quality, energyefficiency, advanced ADAS and smart cockpit systems. Ethan Xu+852 2123 2634ethan.xu@bernsteinsg.com Upgrade aspiration remains strong.Despite economic shifts and changing brandpreferences, Chinese consumers have steadily increased their car budgets, seeking toupgrade to the best vehicle affordable. Value is now tied more to advanced EV technologiesled by Chinese brands than to traditional German premium heritage. With a shorter carownership history and well-developed transport infrastructure, car ownership in China ismore discretionary, making vehicle purchases a lifestyle choice that shapes preferences. Intelligent driving tech is table stakes; strong brands still matter.Chinese consumersembraced EVs, ADAS, and robotaxis early, often ahead of technology maturity. ForeignOEMs largely underestimated the EV trend, creating product gaps that legacy brandprestige can’t bridge. To stay competitive, they must boost R&D and accelerate productlaunches. Chinese OEMs are agile in adopting new tech but have yet to build strong brands.In EV’s early phase, brand perception is fluid; but as technology commoditizes, brand will beessential to maintain price premiums. Chinese OEMs are perceived to be 5 years ahead of Western peers in EV technology,with a 7-year gap to close, according to a survey of industry executives. Notably, 83%of respondents identify Chinese leadership in EV battery technology, followed by speedto market. This advantage stems from government support (91%), market competition(60%), and corporate culture (marked by “996” work ethic (80%), greater agility in theabsence of legacy ICE constraints, etc.). Chinese OEMs also benefit from a robust digitalecosystem, leveraging expertise from consumer electronics and mobile internet toaccelerate innovation in connected and software-driven vehicles. The competitive gap may be wider than perceived.To catch up, experts we surveyedbelieve Western OEMs must prioritize cost reduction and organizational restructuring.China has largely mastered EV powertrains and is advancing in AI-enabled cockpits andLevel 3+ autonomy, while international OEMs remain focused on battery improvements.The critical question may no longer be how much market share can be reclaimed in China,but how to defend home turf as Chinese OEMs intensify their global expansion. BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS We hold a cautious view of the sector. China’s auto sales in 2025 1H have trended above expectations, which was boostedby the revamped trade-in policy and local government subsidies, accelerated new product launches, and increased OEMpromotions. Policy support could help sustain stronger demand through the rest of 2025, though yoy comparisons will becomemore difficult from late Q3. We also expect exports will continue to be a growth driver, albeit at a more moderate growth ratethan previous years. We forecast industry wholesale volumes to grow by 8% and reach c.29.5mn units in 2025, comprisingc.24mn units (+7% yoy) for the domestic market and c.5.5mn units (+10% yoy) for exports. The long term secular growth outlook for EVs remains intact and even though EV transition has come to the mass adoptionphase in China, we forecast EV sales growth will be c.30% for 2025 and drive EV penetration to 57%. We expect competitionwithin the domestic market to remain intense and put pressure on pricing and profitability. Meanwhile, overseas markets willcontinue to present a strategic growth opportunity. For our EV names, we rateBYD and Xiaomi Outperform, andXPeng, LiAuto, and NIO Market-Perform. Within our traditional Chinese OEMs coverage, we rateGeely OutperformandGreat Wall,GAC, and SAIC Market-Perform. VALUATION COMPS TABLEASIAN AUTOS Table Of Contents Key reflections on 10 Years of proprietary survey data................