Mobility innovation in China will challenge traditional auto brands

To Bill Russo, CEO and founder of Shanghai-based transportation consultancy, Automobility, China is the “tip of the spear” when it comes to mobility innovation, transforming the way we think about and how we interact with future mobility devices, born from the ashes of the legacy automobile industry.

China is moving quickly to solve humanity’s evolving mobility challenges, he says, because it doesn’t have the legacy issues seen in developed markets. “In China, you don’t have a multi-generational history of vehicle ownership, and you have more riders than drivers, and you have a large economy investing in a digital economy,” said Russo.

Russo believes that the traditional automobile industry is too focused on its legacy business of selling and servicing cars to see the more significant opportunity in mobility. “The legacy auto business has geofenced itself from where mobility profit can be made. Some have made shortcuts by adding digital applications that add features, but these do not take advantage of the services they could provide in mobility,” said Russo. 

Russo sees the next transition in the automobility industry squarely dominated by local Chinese brands. “Foreign car brands for decades have enjoyed huge advantages over local Chinese brands, selling up to 75 percent of the total automobile volume since the first JVs started coming here in the 80s. But the new digital mobility economy in China will be a predominately local business,” replied Russo.

Russo cites that in the first half of 2022, and despite the lockdowns, the Chinese NEV category grew 120 percent, while traditional combustion automobiles contracted by 19.5 percent. 78 percent of the NEV sales are Chinese brands.

Is there an appetite for Chinese EVs in North America? Russo believes the opportunity is enormous, especially for EV automobiles in the affordable range of the spectrum. “But the geo-politics and trade barriers will most probably get in the way,” said Russo.

Bill Russo's interview is available on the Shanghai Zhan podcast, a "raw, lively, and regular debate about China tech, advertising, creativity and the intersection of it all", hosted by Ali Kazmi and Bryce Whitwam.

The podcast is now available now on Apple Podcasts, Spotify, Google, Stitcher, Amazon Music, Xiao Yu Zhou and via RSS.