China’s plan to overtake the European market for electric vehicles

For some folks, the car would be their ideal vehicle. a 653 hp motor You can accelerate from 0 to 100 kilometers per hour in 3.9 seconds. This all-electric, all-wheel drive vehicle has a range of 500–700 kilometers, depending on battery size (310–434 miles). Starting at €69,900 ($68,200), the price. It is the brand-new, top-of-the-line eT7 car from Chinese electric vehicle manufacturer Nio. October is predicted to see the start of them in Europe. In January, deliveries of other cars, such the eL7 SUV, will start. Orders are presently being taken for the company’s more economical eT5, which will compete with Tesla’s mid-range Model 3.

In Europe, the idea of battery-changing stations is new. If a driver would rather not charge their vehicle using a cable, they might have a low battery switched out for a full one. The process should be finished in a short amount of time. Germany now has just one such station, but 19 more are anticipated to be built before the year is over. by 100 by 2023. China has already conducted test flights over Europe. Chinese manufacturers made a failed attempt to enter the European market 17 years ago. An official crash test on an off-road Landwind vehicle was unsuccessful. There was even more damage done to its reputation.

But time has already passed, and the cards have been dealt again. Recently, Sixt, a car rental firm with headquarters in Munich, announced their plan to buy 100,000 electric vehicles from BYD in China by the year 2028. The first batch is anticipated to arrive later this year. It represents a big victory for BYD in Europe. The company, which is already one of the largest battery manufacturers in the world, has the ability to overtake Tesla and assume the lead in the manufacturing of electric vehicles in the medium term.

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Along with BYD and Nio, SAIC, Geely, Great Wall Motors, and startups like Xpeng are also making advances. Experts predict that 20 Chinese manufacturers will soon begin shipping to Europe. They also have a very clear advantage. In contrast to major European manufacturers like Germany’s market leaders, who frequently only offer electric vehicles in the upper price range, they create electric vehicles in a variety of vehicle classes. The scarcity of parts and chips is also affecting European manufacturers because of problems in the supply chain and lower production.

Can the Chinese, however, genuinely compete with Volkswagen, Mercedes-Benz, and other European brands? I don’t think even one Chinese company can actually compete on an equal level with the European, Japanese, and Korean manufacturers in Europe, said Jochen Siebert, founder of the consultancy JSC Automotive, which concentrates on the Chinese auto market and has offices in Shanghai and Stuttgart.

The “various electronic gimmicks” used by Chinese manufacturers, including passenger karaoke facilities or augmented reality technologies, are, in Siebert’s opinion, their greatest advantages. That might attract Chinese customers, but German consumers in the higher price category are generally a little more cautious and steer clear of products with an excessive amount of technology. There are still some more important problems. In essence, no Chinese company can succeed on its own. Without continued funding from local and state governments, the majority, if not all, would likely not exist today. Chinese businesses are going abroad to try their luck because they are aware that the Chinese government does not have the resources to continue providing subsidies, according to Siebert.

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Gregor Sebastian, an automotive specialist at the Mercator Institute for China Studies in Berlin, also has his reservations. He asserts that government subsidies and limitations on international rivals’ access to the Chinese market account for a large amount of the current success of Chinese firms. However, over time, this support could end up hurting Chinese exporters to Europe. The EU is paying more attention to Chinese market distortions and protectionism. New rules on foreign subsidies that distort the market may pose serious challenges for Chinese manufacturers of electric vehicles, according to Sebastian. A general increase in geopolitical differences as well as unequal market access should be taken into account.

Berlin-based business analyst Matthias Schmidt, who focuses on the electric vehicle industry, emphasized that “China’s manufacturers have a chance.” Given Tesla’s accomplishments, you would be a fool to dismiss them. Tesla was able to enter the market because other manufacturers left the door wide open and refused to release EVs at a loss. Due to substantial local production, Chinese enterprises have benefited from cost advantages in expensive battery technology. It may be more advantageous for a volume brand, such as BYD or SAIC’s MG, to expand abroad than it would be for a premium brand, such as Nio.

The ability of manufacturers of electric vehicles to develop has been a topic of study for many years for Stefan Bratzel, head of the Center of Automotive Management. He asserted that Chinese automakers like BYD, Nio, or SAIC are becoming more competitive on the European markets. Their connection with Western vendors has increased their total level of innovation, and the quality is rising.

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Chinese manufacturers will be able to benefit from this new “horn of plenty,” according to Ferdinand Dudenhöffer, head of the Center for Automotive Research in Duisburg, Germany. “A new tech and supplier industry is growing in China,” he said. It doesn’t concentrate on a particular business that might be incredibly fascinating, like Tesla. There is a whole industry involved. China has an advantage in the speed at which new technologies are developed and implemented. “Tesla is unique, but China is a massive movement that is creating many Teslas,” Dudenhöffer continued in his own words.

The expert clearly warns against an “anti-China approach” that would harm German automakers more than the Chinese. “We would lose a lot more money. Additionally, the German auto industry’s ability to innovate would be seriously harmed by failing to capture the Chinese market. Today’s innovations come from China, and businesses that separate themselves from them run the danger of losing customers.