MG, BYD, NIO & Co.: Electric cars from China are becoming more popular in Europe – good quality at affordable prices

• Electric cars from China are becoming more popular in Europe
• Share of the Western European electric vehicle market is still small, but increasing
• European Commission investigates subsidized electric cars from China

Electric car manufacturers from China are on the rise. BYD took market leadership from VW on the Chinese car market this spring. In Europe, BYD & Co.’s market share is still well behind its Western competitors, but the popularity of electric cars from the Middle Kingdom is also increasing on the European market.

Chinese electric car manufacturers want to conquer Europe

The largest Chinese EV provider in Europe is MG. According to MG, the brand was “produced and designed specifically for the European market” and is part of China’s largest car manufacturer SAIC Motor (Shanghai Automobile Industry Corporation). Tesla competitor BYD, which is supported by Berkshire Hathaway CEO Warren Buffett, is also growing quickly and Geely is also competing with VW, BMW, Stellantis & Co. with its subsidiary Volvo and electric car manufacturers such as Polestar, Lynk & Co. on the European market. Startups like NIO and Xpeng are also trying to conquer the European market. According to independent auto analyst Matthias Schmidt, Chinese automakers account for 8.4 percent of the Western European electric vehicle market, up from 6.2 percent last year, The Associated Press (AP) reports.

In addition, global car manufacturers such as Tesla, BMW & Co. manufacture vehicles in China and then export them to Europe. Every fifth electric vehicle sold in Europe is now a Chinese import.

Investigation into subsidized electric cars from China

This raises concerns about the European automotive industry. “Global markets are now flooded with cheaper Chinese electric cars,” with prices “kept artificially low by huge government subsidies,” AP quoted EU Commission President Ursula von der Leyen as saying. The European Commission officially opened an investigation into subsidized electric cars from China this month. A spokesman for the EU Commission said the investigation looked at China’s exports of electric vehicles “regardless of the brand.” According to AP, China expressed “strong dissatisfaction” and declared that it would “strictly protect” the rights of Chinese companies.

Stellantis wants to defend himself

Stellantis, which emerged from the merger of the two car companies Fiat Chrysler and Peugeot in January 2021, wants to defend itself against competition from China. Stellantis CEO Carlos Tavares explained in a conference call about the results that the company was reacting to a “Chinese invasion of a European market” with its new affordable compact car Citroen e-C3.

Good quality at affordable prices

According to Schmidt, the rules for entering the Chinese market are one reason that competitors from China can offer high-quality cars at affordable prices. Global car manufacturers would have had to work with local companies and provide them with important know-how. “They were something like the sous chefs of Western companies,” AP quoted the auto analyst as saying. “The situation now is that these sous chefs are opening their own restaurants and in some cases even better restaurants than their masters’ restaurants.” In addition, the lower complexity of battery-operated engines compared to combustion engines and the lower need for workers contribute to a level playing field. European brands with large workforces would take years to retool operations, according to Schmidt.

Chinese competition wants to gain consumer trust

But even though the popularity of electric car brands from China is increasing, the companies still have some obstacles to overcome. Last year, their popularity lagged behind that of other car manufacturers. According to a YouGov survey, in 2022 only 17 percent of German consumers knew NIO, 14 percent BYD, ten percent Geely and eight percent Xpeng. In addition, there are still reservations about the quality of the electric cars made in China. And so the Chinese competition is likely to continue working on gaining consumers’ trust, for example with the help of test drives and showrooms where potential buyers can see for themselves the quality of the cars.

Editorial team finanzen.net

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