Chinese Cars Carving out EU Market Share
The European market is becoming filled with EV’s that were manufactured in China. Those companies selling on the shores of Europe are Xpeng, BYD, and MG, which is being pushed by the country’s strong push into electrification which isn’t just about cleaning up the choking air pollution, but about being in a dominant position in the global auto industry.
Chinese car companies will likely never have the reverence of a Porsche or Tesla, but the market for EV’s is massive especially in the budget segments, which Western electric vehicle manufacturers are still mostly ignoring. There is a significant price gap between European and Chinese automobiles, in which Chinese EV makers will have the upper edge in the European market as they cater more to the lower price range.
The emission regulations imposed by the EU are a main contributing factor in the Chinese gaining more share of the market there, “Regulation in Europe ensures that electric cars built in Europe are about 40 percent more expensive than comparable vehicles made in China,” he said, adding that the auto industry in the region could suffer the same bleak fate as the solar panel industry in Europe. “European electric cars are about 40 percent more expensive than comparable vehicles made in China”.
Patrick Koller, CEO of the French supplier Forvia for EV manufacturers stated that “We don’t know how to make small cars with affordable batteries, and China knows it.” The high cost of batteries is a contributing factor to the issue; small urban EVs can cost approximately 10,000 euros ($10,600) more in Europe than they do in China, as Koller pointed out, and he added that rapid innovation “is a must.”
When looking at the sales figures for Tesla’s Model Y in Europe, one could argue that Tesla poses a greater threat to European original equipment manufacturers (OEMs) than all of the Chinese brands combined. When it comes to low-cost city cars, Tesla is a threat that moves at a slower pace than other competitors. The good news is that the winning strategy to deal with either of these challenges is the same: the automotive industry needs to pull out all the stops and immediately begin producing more alluring electric vehicles at affordable prices in order to satisfy the demand in the lower sphere of the income bracket.