The rise of Chinese EVs
Electric vehicles have become a common sight on roads worldwide, with leading car manufacturers such as Porsche, Mercedes, Nissan, Toyota, and Ford launching their own models.
However, many consumers may not be aware that the European electric market is now being targeted by several Chinese manufacturers, which is creating new sales opportunities for those who have already perfected their EVs in China. According to Fitch Solutions, China is currently the largest EV market in the world, accounting for 60% of global sales in 2022. Moreover, Chinese manufacturers’ share of Europe’s battery-electric market is expected to increase from about 5% in 2023 to 15% in 2025.
There are multiple factors contributing to the rise of Chinese electric vehicles. First and foremost, electric vehicle manufacturers in China tend to produce all the components of their vehicles in-house, except for the glass and tyres, which are outsourced to third-party providers. BYD is a perfect example of this approach. By producing everything in-house, manufacturers can ensure that production is faster, as they do not have to rely on complex supply chains that have the potential to be disrupted, as seen during the Covid pandemic.
Secondly, competition in the Chinese market is significant. The Chinese market is highly competitive and has been driven by government subsidies, which are set to end in 2023. This has resulted in a surge in demand for vehicles that are of high quality and affordable for the end customer. As a result, many Chinese manufacturers are now expanding their focus to new markets, such as Europe. This overseas expansion has given them the opportunity to identify a gap in the market for a vehicle that offers great quality at a price point that can challenge traditional manufacturers.
It’s important to note that Chinese companies like SAIC are acquiring established manufacturers such as MG. This allows them to introduce their electric vehicles into the European market under a more recognisable brand. It’s safe to say that if you were given a choice between purchasing an EV under the SAIC Motor or MG brand, you would most likely choose the latter.
It’s great to see that vehicle styling, both inside and out, is improving. Initially, electric vehicles didn’t look very attractive, but now manufacturers are putting more effort into designing cars that look good while doing their job. BYD’s Seal is a great example of this, with its sleek design and aesthetically pleasing features such as back diffusers that make the car more aerodynamic, ultimately improving its range.
Chinese EVs are slowly gaining popularity in Europe. However, brand loyalty of European consumers may be difficult to break.