Wednesday, September 27, 2023

Chinese EV Makers Target Europe as Competition Heats Up

Chinese electric vehicle manufacturers are aggressively expanding in Europe's EV market, raising competition levels. Learn more about this growing trend.

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Maximilian Müller
Maximilian Müller
Maximilian Müller is a dynamic journalist with a talent for telling stories that matter. With over six years of experience, he has gained a reputation for his insightful reporting on politics and social issues. Maximilian holds a degree in journalism from the University of Innsbruck and has worked for prominent Austrian newspapers. His work has been recognized with several awards and he is committed to providing his readers with informative and thought-provoking journalism. Known for his passion and integrity, Maximilian is a rising star in the Austrian journalism scene.
Chinese EV Makers Target Europe

Chinese electric vehicle (EV) makers are aggressively targeting Europe’s EV market, which saw a 55% sales increase in the first seven months of 2023, reaching approximately 820,000 vehicles and comprising 13% of total car sales. Companies like BYD, Nio, and Xpeng are expanding their presence in Europe, with Xpeng planning further market expansion in 2024 and Zhejiang Leapmotor Technology announcing five new models for overseas markets, including Europe.

Data from auto consultancy Inovev reveals that Chinese brands accounted for 8% of new EVs sold in Europe this year, up from 6% in 2022 and 4% in 2021. The influx of Chinese EV makers has raised concerns in Germany, with the president of the German Association of the Automotive Industry, Hildegard Mueller, stating that Germany is losing its competitiveness and emphasizing the need for increased investment in electrification.

Chinese EVs have a price advantage, with the average cost of an EV in China being less than €32,000 ($35,000) in the first half of 2022, compared to approximately €56,000 in Europe. European automakers are striving to compete by reducing production costs and enhancing range and efficiency. Mercedes-Benz and BMW are launching new models targeting cost-efficiency, while Volkswagen aims to reduce battery cell costs by 50% through its Chinese partnerships.

Xpeng President Brian Gu acknowledged that European carmakers are currently behind China in the EV market but highlighted their substantial commitments to EVs through partnerships and technology investments. However, he noted that Chinese companies are highly proficient at battery production, where costs can account for up to 40% of an EV’s total cost.

Auto industry analyst Ferdinand Dudenhoeffer stressed the importance of Chinese battery makers setting up in Germany to reduce EV costs. He cautioned against strategies that might drive them away, highlighting the need for cooperation between Chinese battery companies and German policymakers.

The aggressive expansion of Chinese EV makers in Europe has intensified competition in the EV market and pushed European automakers to enhance their offerings and reduce costs to remain competitive. The future of the EV market in Europe will likely see increased rivalry between Chinese and European manufacturers.


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