BYD launched the BYD Seal in Europe at the IAA Motor Show in Munich, Germany. The electric sedan starts at 44,900 euros ($48,479).
Arjun Kapal | CNBC Money
MUNICH, Germany – The IAA in Munich, Germany is one of the most watched auto shows in Europe. This is largely dominated by Chinese electric vehicle companies looking to expand their presence on the continent and challenge incumbents from Europe. BMW arrive ford In the new era of battery-powered vehicles.
Chinese start-ups and corporations occupied the largest booths at the event, holding high-profile press conferences and car launches, underscoring their intent to make a splash in the European market.
China is the world’s largest market for electric vehicles, and EV companies have mushroomed over the past few years, fueled by government subsidies and venture capital funding. But with tepid consumer spending after the lifting of Covid-19 restrictions and an attractive European market slowing down at home, Chinese companies are launching vehicles and expanding their footprints overseas.
Daniel Roeska, senior research analyst, said: “Europe is one of the largest (after China) mass-market auto markets…if Chinese EV makers want to find a path to growth outside their home market, they will look to Europe It’s very logical,” Bernstein Research told CNBC via email.
Roeska added that Europe’s “de facto strict” ban on internal combustion engine vehicles by 2035 “is pushing the market to move more quickly to electric vehicles, thereby expanding the market, at a time when most EU brands … have not yet delivered a perfect product Share” harvesting is easier. “
While Chinese automakers are rolling out dozens of new vehicles, many European automakers are lagging behind in electric vehicles.
China leaves its mark in Munich
The ambitions of Chinese EV companies were on display at the IAA.
the first morning, Yueyue carThe Hangzhou-based Chinese company has announced plans to bring its C10 sport utility vehicle (SUV) to the European market next year. The company said it plans to launch five “global-ready” products around the world over the next two years.
Zhu Jiangming, CEO of Leap Motor, said at a press conference on Monday: “All subsequent products of Leap Motor will be designed and developed with global thinking and follow global standards.”
Chinese electric car maker Leapmotor has launched its first car for the international market, called the C10.
Arjun Kapal | CNBC Money
Meanwhile, Warren Buffett-backed automaker BYD launched its Seal electric sedan in Europe on Monday, with prices starting at 44,900 euros ($48,479). In contrast, in Germany, Tesla’s The Model 3 starts at 42,990 euros.
There are more announcements about continued expansion into new territories.
Xpeng On Monday it said it would expand sales of its cars in the German market in 2024. The company currently sells the P7 sedan and G9 SUV in Norway, Sweden, Denmark and the Netherlands. Brian Gu, president of Xpeng Motors, said the company plans to bring its latest car, the G6, to Europe next year, underscoring the Guangzhou-based company’s global presence.
“We recognize that Germany is the most important market with the highest standards for any automaker,” Gu told CNBC on Monday.
“Being able to come here and really offer our products to customers in this market will really help us penetrate further into the continental European market. We have ambitions to expand our international market coverage.”
The entry of Chinese companies into Europe is seen as a threat to big automakers, which are seen as moving too slowly on electric vehicles.
Incumbents could lose up to 5 percent of market share by 2030 if Chinese automakers enter the market “normally,” Bernstein analysts said in a June report. But if these new entrants can grab up to 20 percent of the market, they added, the pace of entry into Europe is more aggressive than expected.
Price wars and increased competition
But Chinese companies themselves face increasing competition from both internal and foreign markets. Tesla sparked a price war earlier this year, putting pressure on the profits and margins of some of China’s smaller players, such as Xpeng Motors.
At the same time, in order to fend off increasing competition and catch up with Tesla, BMW and mercedes benz Both companies have launched dedicated EV platforms that will underpin their vehicles for years to come, further adding to potential headwinds that these Chinese challengers won’t ignore.
“Well, it’s definitely not easy,” Xpeng’s Gu said of traditional automakers’ forays into electric vehicles.
“I think as a young company, we’re also trying to learn … every step we take, as well as learning from our competitors, from the partners we have. But we’re confident in our technology, we’re confident in our product, ’ Gu added.
Chinese automaker BYD has one of the largest booths at the 2023 IAA Motor Show in Munich, Germany.
Arjun Kapal | CNBC Money
Another challenge for Chinese businesses is building brand awareness, an exercise that can add to marketing budgets and takes a long time.
“Brand is a pretty big problem, but not insurmountable if they can invest long-term,” Peter Richardson, vice president of technical research at Counterpoint, told CNBC via email.
South Korea’s Hyundai Motor and Kia Motors were “relatively unknown” in Europe 30 years ago, but “both brands have become significant players,” Richardson said.
“It takes time and dedication,” Richardson added.
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