With its electric cars set to power ahead into the European
market … does the future of e-mobility belong to China?
They have their products ready and they have a plan to conquer the European market.
Why are brands like NIO and their innovative marketing
strategies years ahead of European automakers?
How did BYD manage to overtake previous market leader Tesla
and become the biggest e-car maker on the planet?
They control the whole value chain of the electric car.
It's a very problematic situation for the European car manufacturers.
Do Germany and Europe even stand a chance of catching up with the
competition from China? Or have they been left in the dust … for good?
So that is really a change of the times.
In 2022 the Chinese auto industry launched an unprecedented offensive on the European market,
with over a dozen new vehicles covering all model categories.
And the timing is hardly a coincidence.
At the moment we have a very special situation for the European car market.
The prices for cars have gone up and at the same time we need to achieve a green
and electrified mobility. And here is, I believe, a very good - some may call it
the golden opportunity - for new entrants in the game, mainly coming from China.
E-cars have recently become increasingly
expensive in Europe. Among the reasons is domestic carmakers' model strategies.
… although Russia's invasion of Ukraine has also been a factor:
The dramatic rise in energy costs for production in Europe means that raw materials previously
imported at low price from Russia need to be acquired elsewhere and for a lot of money.
Transport & Environment is an NGO that conducts regular studies on cleaner transportation.
It discovered that the proportion of new e-cars on the roads of Europe
dropped to 11 percent in 2022 – while in China, it increased to 18 percent.
Here, too, China is outstripping Europe. So what are the reasons for this development?
When it comes to expanding its electromobility industry, China
has evidently done a number of things better than countries in Europe, including Germany.
The Chinese government has nearly a decade ago recognized, that the new game it's not
the combustion engine anymore. The new game is electrified mobility.
And they have set industry political frameworks and also financial aids
in order to motivate the local industry to develop a compelling offer. And now,
after many years of development, the products and the efforts are ripe.
And with an eye on maximizing self-sufficiency, China introduced a rash of state subsidies:
Covering R & D for all e-mobility components. Offering buyer incentives.
Speeding up the certification process compared to non-electric models.
And last but not least: double the number of charging stations than the rest of the world
combined – with some of them, in Beijing for example, accessible to drivers at zero cost.
Having a steady supply of required raw materials – maybe for batteries, may be
for electric motors or you name it. I think this is a key task for the government.
They control the whole value chain of the electric car, including also the batteries.
Especially in the field of battery technology,
several breakthroughs and advancements have been made by the Chinese industry.
In addition to setting new standards with its innovative lithium-iron-phosphate batteries,
BYD also makes electric motors and chips – all under the same roof.
The world's biggest e-car manufacturer has a wide range of models.
European drivers can choose from the "Han" luxury sedan,
the "Tang"
SUV
and small compact called "Atto 3". And they cost
up to a third less than their respective European rivals.
They are profiting from low energy prices because they are using a high share of coal.
But while there is much to be critical of – in terms of long-term commitment,
China's e-mobility strategy is miles ahead of the West.
Sixt is a German-based
international rental company – and in future, anyone reserving one of their e-cars will have
a 50:50 chance of being handed the keys to a slick-looking BYD like the "Han".
When it comes to e-mobility the Chinese are slowly but surely getting Europe's
traditional automakers hot under the collar.
German excellence in internal combustion engines
was undisputed. But now with electric mobility, the cards got shuffled again.
It's a very problematic situation for the European car manufacturers,
because the quality of the Chinese electric cars is much better than it was in 2007
or 2008 - when they at first started to get into the European market and failed.
Meanwhile, NIO has launched its ET7 executive sedan in Europe. It comes with a unique service
program that enables drivers to swap empty batteries for full ones in a matter of minutes …
There'll be "NIO Houses" opening across Europe:
upscale showrooms aimed at elevating the ownership experience.
And the Nio model range will soon see the addition of sub-brands for compact models.
There is a strategy behind it. The key was to introduce a flagship,
a Halo model, which demonstrates the technology, which has a high price
point and the healthy margin. Right to start with this and then go into the mass market.
China doesn't just have the executive segment in its sights.
From the sporty BYD Atto 3 …
To the multi-purpose BYD D1
… and the ORA R1 mini, there are cars for every budget – and with
a series of smaller models about to hit Europe.
At the lower cost segments we see that there's no product offer from Volkswagen or other
European or Western car manufacturers. But the Chinese deliver. The Chinese government funded
especially small cars.
The miniscule Wuling Hongguang, for example, is the top-selling e-car in China,
shifting well over a quarter of a million units in 2021.
And that's in large part thanks to its low price there: the equivalent of 3 thousand 700 euros.
Not surprisingly, it is likewise headed for Europe – and is already on sale in Lithuania.
The affordability of electric mobility, this is one of the key factors to master the transition
towards carbon neutral mobility. China is firmly in the fast lane,
and has already left the floundering European car industry in its wake.
The Chinese OEMs, they have studied exactly,
how the European car market works and how to successfully enter the car market.
My bet would be that China is successful in getting a
market share in Europe in the forthcoming years.
As the pace hots up: will European-built cars be able to CATCH up?
Is China's e-car offensive a cause for alarm? Or a catalyst?
Because the future of automotive production will likely be decided sooner rather than later.
What do you think? Tell us in the comments!