If you came to SXSW this year, you saw Zeekr. If you didn’t come, the chances are you’ve never seen it in your life. The Chinese electric vehicle company was making a big splash down under, using SXSW to spearhead its ‘official launch’ into the Australian market. It was a super sponsor, the highest sponsorship available.
Notably, there was one big electric car company nowhere to be seen — Tesla. Mr Musk is known for making appearances at the American SXSW, often selling his vision for his electric car company to an audience of devout tech enthusiasts. But Tesla has snubbed the Australian SXSW with new challengers jumping to take its place.
The real story is about the battleground for electric vehicle dominance as American dynamism goes head to head with the Chinese manufacturing machine. It’s a battle with serious consequences.
As Australians we find ourselves in between these two warring giants; the outcome will not only affect who sponsors our tech events, but our cost of living and climate targets.
Australia hopes to become Net Zero by 2050, an ambitious goal given our current trajectory. Currently, light vehicles account for approximately 10% of Australia’s total greenhouse gas emissions. Transitioning to electric vehicles will be a key part of achieving our emissions targets but it’s not without a cost.
In Australia, the cheapest Tesla is the Model 3 Rear-Wheel Drive at $54,900 whereas you can roll out in a petrol-powered Kia Picanto for just $17,890. In the midst of a cost of living crisis, the premium for an electric vehicle is simply too much for us to curb our addiction to gas-guzzling cars. Chinese EVs could offer an affordable path to widespread EV adoption.
“Year to date in 2024, over 80% of all electric vehicles sold in Australia were made in China,” said Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber at SXSW Sydney.
In the midst of a climate and cost of living crisis, where will Australia’s next million cars from?
It was a question that panellists grappled with in a discussion titled Zeekr, China and the future of electric vehicles hosted by Next Billion Cars co-hosts Mark Pesce and Drew Smith.
“Australia is an odd combination of past and future,” said Mark Pesce.
Australia is a laggard when it comes to EV adoption, there are only 180,000 EVs on our road, making a measly 1% of the light vehicle fleet in Australia. Undeniably, the coastal road trip in a petrol-powered four-wheel drive holds a special place in Australia right up there with Vegemite and Steve Irwin.
It’s an antipodean cultural hump that all EV manufacturers – including the new Chinese players – will have to make it over. There are already 30 brands marketing EVs in Australia, dozens of which are Chinese brands taking to Aussie streets for the first time — BYD, XPeng and Zeekr. BYD’s popular Atto 3 SUV is $10,000 cheaper than Tesla’s cheapest car.
The Chinese government is offering staggering subsidies to its domestic EV industry that has many countries worried about their own production. The United States has proposed a 25% tariff on Chinese EVs with plans to increase it to 100%. As the panellists acknowledged, the trade war between the US and China is driving prices even lower for Australia as Chinese car makers look for other lucrative markets to sell. There’s a convincing argument to be made that cheap Chinese cars may be our climate salvation.
But it’s not without risks. In 2023, the Australian Strategic Policy Institute (ASPI) urged customers to be aware of the potential security risks of buying a Chinese-made EV. Generally, EVs connect to the internet and are moving repositories of rich personal data that could be exploited by foreign actors. Notably, more than half of Tesla EVs are also made in China
In an increasingly hostile geo-political world, that is a genuine threat. But so far, it is one that our government has been willing to bear.
On the mean streets of foreign policy, climate goals usually give way to national security. This might be the rare exception.
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Sean Stuart started his career as a venture capital investor where he specialised in AI, crypto and SaaS investments. He quit to run 80 marathons in 80 days across the USA. After that, he lived in Argentina where he wrote his second book, a mystery novel. Now he’s back in Sydney, at the intersection of these worlds — helping tech companies wield words.
