China, a major leader in electric vehicles

Last month, we already wrote about this certain fact: China will soon be the biggest exporter of electric vehicles. Many economic articles predicted this massive arrival of Chinese electric vehicles.

His tactic, favoring innovation, pays off because European manufacturers are lagging behind in this area… They are therefore worried about the prospect of an influx of Chinese electric cars, which will not be long in coming.

Especially since your price will be competitive and that the declining purchasing power of European households is likely to encourage them to buy Chinese electric cars.

Chinese vehicles invade Europe

Most of these Chinese-made cars are produced by Western OEMs. These include in particular Tesla, Dacia and BMW. Another example, Polestar is a subsidiary of Volvo, a Swedish company owned by China through the company Geely (Shu Fu Li 82%).

And the two main shareholders of Mercedes-Benz are Chinese, controlling just under 20% of the capital (Beijing state assets 9.98% and Shu Fu Li 9.69%). The 3rd shareholder of Mercedes being Kuwait Investment Authority 6.80%!

Please note: Chinese companies are all controlled by the Chinese state, through equity pyramids.

A glimpse of what awaits us

We can already start with this observation: it is surprising, but not shocking, that Tesla exports many EVs from China to Europe. In fact, these cars represented nearly 15% of EV registrations in 2021, the second largest participation behind Germany.

In just three years, the market share of these cars is went from a marginal of 0.5% to 14.7%. Meanwhile, German-made EVs accounted for 17.3% of that market in 2019, jumping to 19.7% last year. Other countries such as France have reduced their share from 21.4% in 2020 to 11.4% in 2021.

Mass greenwashing?

We can criticize the fact that zero-emission EVs are transported by freighters to the other side of the world… it is not a matter specifically related to this sector. Again, there are obvious interests in switching your koleos to an e-up (weather, peak oil, air pollution, noise pollution, eco-driving, accidentology, time saving, metal extraction, etc.).

Also, between 8000 km boat transport and 3000+ km truck transport, the CO2 advantage is in the boat.

China moves away from European manufacturers

Indeed, China has fully entered the electric car era and these are their own builders leading the dance.

In Europe, Chinese manufacturers are starting to make a notable arrival. Some have already started their careers in the Old Continent, such as MG or Lynk&Co. Others will soon arrive with a very competitive offer, like Ora and its electric Cat. A situation completely opposite to the time when European manufacturers dominated the Chinese market.

Foreign manufacturers with absent subscribers?

That demand is growing in China, as earlier this year more than double the number of electric and plug-in hybrid cars sold were sold at the same time last year. These technologies represent an increase of 23%, where the global market fell 12%.

The other main finding of this emergence of electrified cars is the difficulty that awaits foreign brands in China. This concerns the future and sales of electric and hybrid cars. Indeed, there is only one foreign manufacturer among the top 10 brands in these segments, and that is Tesla in third place.

And the difference is huge between Elon Musk’s company and leader BYD. The latter has sold 390,000 electric vehicles this year, about three times as many as Tesla in China.

Examples of Chinese drivers

The latter, no longer considering the purchase of a European vehicle, are multiplying. Reuters interviewed an owner of an Xpeng electric SUV. She reveals that she didn’t think of a foreign car as she was looking for a “zero emission” vehicle.

“If I had bought a gasoline car, I would have considered foreign brands”explains Tianna Cheng. “But I wanted an electric vehicle and, aside from Tesla, I saw few foreign brands offering smart technologies adequately”.

Are electric cars not revolutionary enough?

According to another Chinese, it is the lack of technology and modernity that is lacking in European cars. “Foreign brands are far from my life and lifestyle. »

The young audience wants bring your in-car experience closer to a multimedia experience. She confesses just like her digital assistant “does everything for me, from opening windows to playing music”.

These expectations, a little more futuristic than those of European customers, could put manufacturers at odds. How to satisfy both markets? Clear, joint ventures can help with this, but the cars that come out of it are not model specific.

Conclusion

Is not just the beginning of a Chinese wave. The Chinese are in a better position than the Westerners when it comes to electric cars and have more capacity and more government support.

Nissan CEO Makoto Uchida seems pessimistic about the penetration of the Chinese market by European and American automakers. According to him, several manufacturers could “disappear in three to five years” in the Chinese market.

Bill Russo, who worked at Chrysler and became an automotive consultant in China, makes the same observation. “Chinese brands are winning the electric car race”says Russo. “I think it’s a secular shift to high tech, and traditional companies are not born out of high technology. »

The switch from thermal to electric cars had already been difficult for traditional car manufacturers. And it’s a safe bet that it’s exactly the same pattern that repeats itself regarding high-tech innovation desired by Chinese consumers.

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