At the ongoing Munich International Motor Show, also known as the IAA mobility show, China has presented a picture that has Europe’s legacy car makers, as well as EV startups worried. China’s EV prowess seems to be lightyears ahead of its European counterparts.
In fact, some visitors attending the show, have told German news outlets that the difference between EU’s and China’s offerings are so far apart, that it gets comical at times.
China throws a gauntlet at EU
European car manufacturers are facing a competitive challenge as they strive to produce more affordable electric vehicles (EVs) and catch up with China’s leadership in developing cost-effective and consumer-friendly electric models, according to industry executives at Munich’s IAA mobility show.
Luca de Meo, CEO of Renault, emphasized the need to narrow the cost gap with Chinese competitors who began developing EVs earlier. He noted that as manufacturing costs decrease, EV prices will also become more competitive. Renault plans to release its R5 EV next year, which is expected to be 25 per cent to 30 per cent cheaper than its electric Scenic and Megane models as part of its strategy to achieve price parity with Chinese counterparts.
Chinese EV manufacturers like BYD, Nio, and Xpeng are actively targeting the European EV market, which experienced a 55 per cent surge in sales, reaching approximately 820,000 vehicles in the first seven months of 2023, constituting about 13 per cent of total car sales in the region.
Xpeng has plans to expand into more European markets in 2024, while Zhejiang Leapmotor Technology has announced the introduction of five models for overseas markets, including Europe, over the next two years.
Chinese EVs’ rapid expansion in EU
Inovev, an automotive consultancy, reports that Chinese brands have made significant inroads into the European electric vehicle (EV) market. In the current year, 8 per cent of new EVs sold in Europe are manufactured by Chinese companies, a notable increase from 6 per cent in the previous year and 4 per cent in 2021.
This growing Chinese presence is also evident at the Munich auto show. A substantial 41 per cent of exhibitors at this year’s event have their headquarters in Asia, with a particular increase in the number of Chinese companies participating.
This includes well-known Chinese EV manufacturers such as BYD and Xpeng, as well as prominent battery manufacturer CATL. This strong representation from Chinese companies underscores the global competitiveness of China’s EV industry.
The landscape of the automotive industry is shifting dramatically, as noted by Fabian Brandt of consultancy Oliver Wyman. What was once a stage for the German car industry to showcase its dominance has evolved into a global gathering of progressive players, with a significant presence from China.
EU car makers sound the alarm bell
The entry of Chinese electric vehicle (EV) manufacturers has prompted concerns about potential disruption and their ability to dominate EV sales. Notably, the average price of an EV in China during the first half of 2022 was significantly lower, at less than 32,000 euros ($35,000), compared to approximately 56,000 euros in Europe, according to research from Jato Dynamics.
Gilles Le Borgne, Renault’s engineering head, emphasized the need for Europe to adopt a more pragmatic perspective in the face of China’s growing influence, especially given China’s control of the entire battery supply chain.
The competition for price supremacy is a central theme, as demonstrated by Tesla’s plans to introduce its upgraded Model 3 in Europe in October, priced at 42,990 Euros ($46,400). This reflects the evolving dynamics and global competition within the EV market.
from Firstpost Tech Latest News https://ift.tt/xRq8nrp
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