Ford’s CEO says China’s EV industry poses an existential threat to global automakers. The country’s dark factories, which have robots run 24/7 with limited human interaction, aim to further widen the gap between Chinese car manufacturers and everyone else. As China grapples with overproduction and Trump’s trade war with Beijing continues, one big question remains: who will buy all these vehicles?
WSJ visited Zeekr, a Chinese luxury EV-maker, to learn about China’s hyper-automation.
Chapters: 0:00 China’s dark factories 0:40 China’s labor costs 1:19 Inside Zeekr 2:21 China’s automation 3:13 U.S. playing catchup 4:13 Challenges in the Chinese economy
News Explainers Some days the high-speed news cycle can bring more questions than answers. WSJ’s news explainers break down the day's biggest stories into bite-size pieces to help you make sense of the news.
00:00With lights dimmed and no workers in sight, this car factory in China uses hundreds of robots to churn out dozens of electric vehicles an hour, 24-7.
00:12This is a dark factory, an area of the plant so automated and with so little human presence that, in theory, the lights could be completely shut off.
00:23Factories like this one are part of China's bid to use hyper-automation to dominate the electric vehicle or EV market.
00:31But the furious trade war between Washington and Beijing raises a key question.
00:36Who is going to buy all these new cars?
00:40For decades, the abundance of cheap labor explained why China was seen as the world's factory floor.
00:47But the economy is changing.
00:49The labor costs had been going up in China for many years.
00:53I think it happened faster than many people in the West expected.
00:56And so if you're a factory owner, you want to find a way to blunt the impact of that.
01:00And automation is one very obvious way.
01:03Rapid advancements in robotization has helped create what is now known as dark factories.
01:09We are working in the Hanzang車.
01:11We have 800-hundred-台機器人 at the same time.
01:14We are working at the same time.
01:15And in the meantime, we can achieve a full production production.
01:20This is Zika, a Chinese luxury EV maker founded in 2021, whose cars cost up to $125,000 a piece.
01:28In its flagship factory in north-eastern China, the automaker can already produce up to 300,000 cars a year, or more than 800 cars a day.
01:37For comparison, Tesla has similar production levels, but it took more than a decade to achieve this volume.
01:44For Zika, robotization has a double advantage.
01:48We also want to increase the quality of people's performance.
01:52We hope we can be able to help with a faster production production and a lower production production.
02:02Some tasks still require a human touch, such as the meticulous assembly of the cables that run throughout the car.
02:09Workers also go into the factories to perform tasks like robot maintenance.
02:14The company's ambition is to keep automating, to deliver its cars to customers even faster.
02:21In China, Zika is not an outlier in automation.
02:24According to the International Federation of Robotics, in 2023, every other industrial robot installed in the world happened in China.
02:32The country's levels of robotization have grown sevenfold since 2015, when President Xi Jinping introduced a Made in China 2025 initiative to transform its image from the world's factory into an innovative manufacturing powerhouse.
02:48The aims are to be able to produce more of what China needs at home and to get to a level of technological advancement where they don't need to rely on the US and Western countries anymore for inputs or to reduce that reliance as much as possible.
03:03And even to be able to produce enough that they can export.
03:07And part of that was to have robotics play a larger role in the Chinese economy.
03:13Some American automakers believe China's widening EV lead, boosted by cheap state loans and subsidies, poses an existential threat to the industry.
03:22When you have a country like China where much of the auto industry is increasingly automated, the sky is the limit in terms of what they can produce.
03:30And if that means a flood of EVs or other vehicles on global markets, that is going to have the effects of just pulling down prices and that's going to hurt Western automakers that are trying to compete with these.
03:43Unlike their Chinese rivals, companies like Ford and GM have scaled back ambitious EV expansion plans, hampered by high battery costs and the slow rollout of EV chargers.
03:55Staffing costs and labor laws in the West are another disadvantage the US faces.
04:00China has a lot less in the way of labor regulation than many Western countries.
04:06They don't have labor unions to deal with in the same way.
04:09So there are fewer impediments to automating.
04:12But China's EV landscape is a crowded space and fast robotization makes this competition even tighter.
04:20Chinese companies already turn out more EVs than all other car makers in the world combined.
04:26But Western concerns about Beijing's EV expansion have, so far, largely kept Chinese brands out of their markets.
04:33Countries that have friendlier relations with China, like Brazil, countries in the Middle East, in Africa, in Southeast Asia, are worried as well about their own domestic industries and don't want to see a flood of Chinese products undermine those industries.
04:48If you have automation enabling China to go even faster and produce even more of this stuff, then this political problem becomes perhaps even greater.
04:59As a result, most of these cars are sold inside China, making overcapacity a huge issue for the industry.
05:06But this doesn't dent Zika's confidence in China's capacity to consume.
05:11This is the largest car market market in the world.
05:15The economy of buying cars, including cars, electric cars, and electric cars are very fast.
05:27We can still see a very good景色.
05:31It's very hard to serve as an engine.
05:36The economy of buying citizens would normally have to pay to fuel exports.
