Article Preview
TopIntroduction
The electric vehicle market continues to attract a diverse array of players, from traditional electric vehicle manufacturers (EVMs) to newcomers, driven by the growing demand for sustainable transportation solutions (Fang et al., 2024). Traditional EVMs, such as Mercedes-Benz, have established advantages in after-sales service and sales channels, facilitating smoother market penetration (Jin & Guo, 2018; Jin & Wu, 2021). Mercedes-Benz’s 2023 financial report indicates that pure electric vehicles constituted 12% of total sales, marking a 61% increase from 2022 figures and reaching 240,600 units sold (Mercedes-Benz Group, 2023).
Brand power plays an important role in product marketing (Song et al., 2022). Entrant EVMs, such as Seres-Huawei and Xiaomi, face initial resource constraints, but leverage strong brand identity to gain market traction. The launch of the AITO M5 by Seres-Huawei in March 2022 set a new benchmark for rapid sales achievement, surpassing 10,000 units in a single model (Ke, 2023). Xiaomi’s SU7, introduced in March 2024, outperformed Huawei’s model in sales volume (Science and Technology Geek, 2024). These examples underscore the pivotal roles of brand power in market entry and growth. These factors significantly impact sales of emerging brands.
Power batteries stand as the heart of electric vehicles, and their procurement strategy is a critical concern for all EVMs (Cui, 2011; Fan et al., 2022). There are two main battery supply models: direct sourcing and technology cooperation. Emerging manufacturers often lack the technological expertise for in-house battery production, leading them to rely on direct sourcing from specialized suppliers (Fan et al., 2022). This approach reduces research and development (R&D) expenditures and streamlines operations, as seen in the partnerships between Contemporary Amperex Technology Co., Limited (CATL) and EVMs, such as Ford, Huawei, NIO, and IDEAL. Additionally, Tesla models S and X rely on battery supply from LG Energy Solution (Yiche Encyclopedia, 2024). In direct sourcing, the battery supply becomes more convenient. EVMs reduce expenses related to R&D and operational costs. However, battery production technology faces constraints. As companies encounter supplier monopolies and potential weaknesses in the supply chain, their acquisition costs increase (Chen et al., 2023).
In technology-intensive sectors, technology cooperation is a prevalent strategy (Zhou et al., 2021). New entrants in the electric vehicle sector face barriers to entry, supply chain uncertainties, and market risks. By engaging in technology cooperation with battery suppliers, these manufacturers can license technology, thereby mitigating risks and ensuring supply stability (Yan et al., 2023). Tesla exemplifies this approach by licensing its battery technology to peers such as Panasonic, Toyota, GM, and Volkswagen, thus enhancing its market presence and fostering collaborative networks (MOTO, 2020). Similarly, Wide Temp’s technology licensing to Xinke New Materials in 2022 facilitated the production of innovative aluminum-based battery cells and PACK products, expanding market applications (Luo, 2022). Technology cooperation mitigates battery supply risks and lowers procurement expenses for producers. Nevertheless, the production line setup at battery manufacturing plants consumes considerable time. Manufacturers must demonstrate strong management capabilities while facing elevated operational costs.