The Fragmentation of the Automotive Market: EVs vs. ICE Vehicles at Beijing Auto Show 2024

The Beijing Auto show in 2024 demonstrated how the car industry is making a shift to electric vehicles. It also showed that internal combustion engine vehicles are still popular. The event displayed a great number of new energy vehicles (NEVs) indicating the market is about to undergo huge changes, yet traditional ICE vehicles never lacked buyers.

The Rise of New Energy Vehicles (NEVs)

NEVs have become important in the automotive industry. At the forefront of the show were 278 NEVs, capturing the limelight with their innovative designs and advanced technologies. Brands like NIO, XPeng, and Li Auto garnered significant attention indicating that people’s interest towards electric mobility had been growing gradually over time. The presence of tech giant Xiaomi's CEO, Lei Jun, further amplified the buzz around NEVs, as he represented the convergence of technology and automotive sectors.

On the other hand, ICE automakers continued to display their gasoline/diesel cars albeit with reduced impact. The contrast between the two was stark, with NEVs dominating the discourse and ICE vehicles struggling for attention. Even luxury brands like BMW and Mercedes-Benz found their ICE models overshadowed by their electric counterparts.

The Lingering Appeal of ICE Vehicles

Irrespective of NEVs’ emergence, many car manufacturers still earn profits from selling gas-powered automobiles. Car companies such as Kia and Hyundai, which have strong customer bases and brand reputation, still get constant sales and profit from their line-up of ICE cars. By adopting the strategy of “oil and electricity go hand in hand” these firms remain a foothold in both markets.

The Profitability Paradox

Interestingly, though NEVs are becoming increasingly popular, few manufacturers have achieved profitability so far. On the other hand, conventional auto makers continue generating consistent returns from ICEs. This has led some companies to adopt a more careful approach by maintaining a balance between NEVs and ICE vehicles in their portfolios.

A Worldwide View

Internationally, there is a shift towards NEVs, but these still make up a very small percentage of overall sales and ICE vehicles remain dominant. As a result, it might take some time before electric mobility fully overtakes ICE since the change will not be uniform across all regions suggesting that ICE vehicles will maintain a significant market share for the foreseeable future.

Conclusion

The Beijing Motor Show of 2024 presented two opposing trends in the automotive industry – the rising popularity of NEVs and enduring demand for ICE vehicles. As they seek their way through this complex landscape, carmakers have started using various strategies aimed at matching the changing needs of consumers around the globe. The countdown to the ICE vehicle era may have begun, but it is clear that these vehicles will continue to play a pivotal role in the automotive industry for years to come.