(AsianFin)—As regions across China gradually disclose their 2023 new energy vehicle (NEV) production figures, discussions about China’s NEV powerhouse reignite. This competition not only reflects city rankings but also delves into complex factors such as industrial transformation and added value in the secondary industry.

In 2023, Shenzhen claimed the top position, surpassing Shanghai and Xi'an to become China's premier NEV hub. The data indicates a 47.3% increase in the city's automotive manufacturing value-added last year, with NEV production soaring by 104.2%. Shenzhen's NEV production reached 1.73 million units, marking a big leap from 874,700 units in 2022.

In 2021, Shanghai led with the production of 632,000 NEVs, while in 2022, Xi'an claimed the top position with 1.0155 million units. Facing intense competition, Shenzhen, which produced only 299,500 units in 2021, boosting its output more than fivefold in 2023, an impressive progress.

Shanghai, home to Tesla's only production base in China, maintained its second position in 2023. The data reveals the production of 1.2868 million NEVs in the past year, falling short of Shenzhen's 1.73 million units. In particular, Tesla's Shanghai Gigafactory contributed over 947,000 units, accounting for over 70% of the city's NEV production.

In contrast, Xi'an witnessed a fall from its previous glory. In 2022, propelled by BYD's success, Xi'an surpassed Shanghai, claiming the top spot with 1.0155 million units. However, in 2023, Xi'an's NEV production dwindled to 983,000 units, marking the only city among the top five with a production decrease.

Beyond the top three, cities like Hefei, Changsha, Guangzhou, Chongqing, and Liuzhou are making progress by leaps and bounds in the NEV sector, posing strong competition to the leaders.

The battle for the title of China's top NEV hub emerged a few years ago. Prior to 2020, the rankings were mainly about sales volume, rather than production. In 2017, before the NEV industry gained significant momentum, Beijing, Shanghai, and Shenzhen were among the top three cities in terms of sales volume for new energy passenger cars. Tianjin held the fourth position.

At that time, Tianjin was an essential automotive production base, being one of the earliest cities to introduce new energy vehicle projects. It accommodated several NEV companies, including Hawtai Motor, Guoneng Automobile, and ICONIQ. Tianjin also implemented policies favoring pure electric vehicles, such as exemptions from purchase restrictions, further boosting the growth of the NEV market.

Around 2020, Shanghai firmly held the title of China's top NEV hub. In 2020, the city produced 238,600 NEVs, experiencing a year-on-year surge of 190%. The production value reached 66.364 billion yuan, a 170% jump. Shanghai added 121,000 new energy vehicles in that year alone, with a cumulative total of 424,000, securing its position as the leader.

As the industry undergoes rapid restructuring, shifts in the rankings are noticeable. For instance, BYD has gradually replaced Tesla as China's leading NEV brand in both domestic and global NEV sales since 2020. Consequently, China’s NEV hub was Shanghai in 2021, a host city of Tesla’s only production base in China, then Xi’an in 2022, and Shenzhen in 2023. 

In 2023, XPeng Motors achieved profitability, which was another major event catching the attention of the auto industry. On February 26, XPeng Motors announced its financial results for the fourth quarter and the full year of 2023. The company reported revenue of 123.85 billion yuan, a year-on-year increase of 173.5%. Total vehicle deliveries reached 376,030 units, with year-on-year growth of 182.2%. For the entire year, XPeng Motors achieved a net profit of 11.81 billion yuan, compared with the net loss of 2.03 billion yuan in 2022.

With XPeng Motors' impressive financial performance, Changzhou's NEV industry experienced a boom in 2023. The city's manufacturing output in the NEV sector reached 768.07 billion yuan, and the industry set a target of 880 billion yuan for 2024.

Similarly, Chongqing, driven by popular car models, witnessed a rapid increase in NEV production. Monthly NEV production in Chongqing hovered around 20,000 units for the first eight months of 2023. However, the figure surged to 70,000 units in both October and November, approaching the 100,000-unit mark by December.

The automotive manufacturing industry has long been hailed as the "jewel on the crown of manufacturing" due to its long value chain, high technological content, strong interconnectivity, and significant driving force, especially amid a slowdown in the real estate market. The automotive industry has become a crucial pillar of the Chinese economy.

The rise of the NEV industry represents one of China's most impressive achievements in global industrial competition over the past decade. Last year, China's new energy vehicle production and sales both exceeded nine million units, ranking first in the world for nine consecutive years, with a global market share exceeding 60%. As this process unfolds, numerous cities across the country are placing their bets on the new energy track, intensifying the competition.

In 2013, when the new energy industry had not yet gained traction, the municipal government of Changzhou, with a strategic perspective, targeted this emerging industry. It identified ten industrial chains, including NEVs and power battery industries, as well as smart grids, and strategically laid out the new energy industry. In 2016, Li Xiang, the founder of XPeng Motors, secured factory land and financial support from Changzhou with just a three-page PowerPoint presentation and built XPeng Motors' Changzhou factory.

In 2019, BYD, a leading company in the new energy vehicle industry, established a plant in Changzhou, and in January 2022, the first BYD vehicle produced in Changzhou officially rolled off the assembly line.

Hefei's remarkable rise can also be attributed to its strategic layout in emerging industries. The new energy vehicle sector has become the second-largest pillar industry in Hefei. In 2023, Hefei's GDP reached 1.27 trillion yuan, with a year-on-year growth of 5.8%, outpacing the national average.

The output value of the new energy and intelligent connected vehicle industry chain exceeded 170 billion yuan, a year-on-year increase of 54.6%, second only to the electronics and information industry. According to the plan, by 2025, the new energy vehicle industry in Hefei will surpass 700 billion yuan in scale, with an annual vehicle production capacity exceeding 3 million units. The city aims to cultivate ten companies with an output value of over 10 billion yuan and achieve the specific goals of leading the country in both output value and production volume. This ambitious plan reflects the city's determination to become a leader in the NEV industry.

Over the past decade, the dominant positions of Shanghai, Shenzhen, and Suzhou as the "industrial triumvirate" have remained unchallenged. Guangzhou and Chongqing have been neck and neck for the fourth position.

In terms of strategic positioning, Shenzhen and Shanghai have established themselves as leading cities in the new energy vehicle (NEV) sector, while Chongqing and Guangzhou are accelerating NEV production. Despite Guangzhou's current undisputed status as the premier automotive city, its dominance is gradually being eroded by emerging NEV cities like Shenzhen and Shanghai.

Therefore, expediting the shift towards new energy and intelligent connected vehicles is an inevitable choice for urban development. From this perspective, the contest for the NEV hub holds deeper significance for urban economic development.