Modern Economics & Management Forum

The demand of new energy car in China is derived from the import of Tesla, which is a competitive firm in USA. Depending on its excellent function and advanced technology, it was very popular in Chinese market in recent years. Under this circumstance, many Chinese company specializing in mobile phone wanted to device new energy cars to compete with Tesla, such as Xiaomi and Huawei. However, this decision did not create high profit in these companies. They spent much money on new energy cars, but Chinese consumers did not like those cars of Xiaomi and Huawei. Compared to Tesla, the lack of core technologies contributes to low quality and high price of domestic new energy car. To solve these problems, Chinese companies should realize that what is the core competitive power of them, and what they should develop in the future. After justifying those direction of development, they can continue to increase input in smartphone and stop to spend much money on new energy cars.