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China’s automakers storm the international market with their electric vehicles.

(Qnnflash) — Chinese manufacturers of electric vehicles have made a strong presence at the IAA Mobility auto show in Munich, Germany.

According to China’s official media, over 50 firms, including established players like BYD and emerging companies like Xpeng, have participated in the event, which is twice the number compared to the last occurrence. This is the largest-ever Chinese delegation at any global automobile exhibition. They became the subject of widespread discussion throughout the community.

During an interview on French radio prior to the start of the show, Luca de Meo, the CEO of Renault, expressed his enthusiasm for the significant advancements made by Chinese electric vehicle manufacturers.

It is evident that they exhibit a high level of competitiveness within the electric car value chain. According to de Meo’s statement on RTL Radio Monday, it might be inferred that he believes that they are one generation ahead of us. It is imperative that we expedite our progress.

Electric vehicles manufactured in China, which are priced more affordably compared to their counterparts produced in other regions, are gaining traction in the European, Australian, and Southeast Asian markets. There is concern among competitors regarding the potential future dominance of Chinese brands in the global electric vehicle (EV) market.

According to a post on the website of the China Association of Automobile Manufacturers, China has overtaken Japan as the leading worldwide auto exporter in the first quarter of this year. This shift can be attributed to robust demand from Russia and an increasing global interest in electric vehicles.

According to figures issued by the China Passenger Car Association on Friday, there was a significant increase of 72% in passenger car exports during the initial eight months of the year, reaching a total of 2.3 million vehicles. Notably, a quarter of these exported vehicles were electric cars. During the month of August, BYD, a prominent player in the electric vehicle (EV) market, shipped over 25,000 vehicles, while Tesla China exported 19,465 units, positioning them as the second highest exporter in the EV market.

Sales of Chinese electric vehicles (EVs) are experiencing significant growth in Europe, which is currently the leading market for China’s automotive exports.

According to data provided by the China Passenger Car Association, Chinese enterprises have witnessed a significant surge in electric vehicle (EV) exports to nine European nations during the first half of the current year. The total number of EV exports during this period exceeded the cumulative exports recorded throughout the entirety of 2022. Over the course of the past five years, there has been a fourfold increase in the European Union’s importation of automobiles originating from China.

According to a recent assessment by UBS, it is projected that Chinese automobile manufacturers may witness a significant increase in their worldwide market share, perhaps doubling from 17% to 33% by the year 2030. Conversely, European companies are anticipated to have the most substantial decline in market share.

Considering Europe

According to automotive analysts, a select group of Chinese electric vehicle (EV) manufacturers are being recognized as “emerging global champions.”

According to Dylan Khoo, an EV industry analyst at ABI Research in New York, Chinese car manufacturers are seeking sales opportunities abroad due to factors including overcapacity, economic deceleration, and intense competition in the domestic automotive market. In the European context, there is a perception of a highly profitable market characterized by a substantial demand for electric vehicles (EVs) and a very limited presence of protectionist policies.

Chinese manufacturers are subject to a 10% import charge when exporting their automobiles to the European Union, whereas the United States imposes a higher tariff of 27.5%.

The bloc’s commitment to forbid the sale of new vehicles with internal combustion engines by the year 2035 further increases Europe’s appeal, in addition to its advantageous tax policies.

In the upcoming three to five years, the majority of Chinese automakers intend to concentrate their efforts in significant European markets like Germany and France, according to a Deloitte survey from the previous year. A sizable majority of businesses, specifically 75%, stated their intention to enter the North American market, according to the consultant’s poll.

Furthermore, it was found that a significant majority of respondents, specifically 88%, expressed their intention to primarily export electric vehicles (EVs).

According to a spokesperson from BYD, the leading electric vehicle (EV) manufacturer in China, the company has set a target to increase its dealer partnerships in Europe to 200 by the end of this year. This statement was made during a press conference held in Munich on Tuesday. The corporation has outlined its intention to achieve substantial growth in its global sales, targeting a total of 250,000 automobiles by the year 2023, as opposed to the 55,916 units sold in the preceding year of 2022.

Xpeng, on its side, unveiled novel models during the exhibition and made a declaration on its intention to penetrate the German market by the year 2024. Additionally, the company has outlined its intentions to expand its sales and service facilities in Europe by the conclusion of the current fiscal year.

According to BMW CEO Oliver Zipse, European mass-market car manufacturers may potentially discontinue the production of mass-market vehicles following the implementation of the forthcoming European Union ban on conventional automobiles. This decision is anticipated to be influenced by both the profitability issues arising from the ban and the increasing competition posed by Chinese automakers.

Electric vehicles (EVs), which are set to become the sole choice for European manufacturers starting in 2035, generally incur higher production costs compared to their gasoline or diesel counterparts.

According to Khoo, a researcher at ABI Research, Chinese companies that are causing disruption in the market are providing European consumers with electric vehicles (EVs) that are reasonably priced and of good quality, catering to various price categories.

According to the speaker, the European automotive supply chain is expected to face disruptions from two sources: the entry of Chinese brands into the European market and the establishment of production facilities in China by Western carmakers for the purpose of exporting to Europe.

Chinese automobiles are experiencing a surge in popularity throughout many regions globally.

During the initial six months of 2023, the sales of Chinese automobiles in the Australian market, encompassing electric vehicles (EVs), had a substantial increase of approximately twofold compared to the corresponding period in the previous year. Consequently, the market share of Chinese cars in Australia surpassed 16%.

Significantly more cost-effective

The cost advantage of Chinese electric vehicles (EVs) could potentially serve as a significant benefit.

According to data conducted by Jato Dynamics, Chinese automobiles are priced at approximately 30% lower than their European and American counterparts.

According to a survey released last year, the mean cost of an electric vehicle (EV) in China during the initial six months of 2022 was €31,829 ($34,096), while in Europe it was €55,821 ($59,797), and in the United States it was €63,864 ($68,429).

According to the experts, a significant portion of China’s achievement in promoting the widespread adoption of electric cars (EVs) may be credited to the industry’s capacity to manufacture cost-effective entry-level automobiles that cater to the general population.

According to the sources, there is a shifting opinion among consumers regarding the quality of cars manufactured in China.

MG, a British automotive manufacturer that is currently under the ownership and direction of China’s SAIC, achieved unprecedented sales figures in the United Kingdom during the initial quarter of the present year. According to the firm, it is currently ranked as the second highest-selling electric vehicle (EV) in the nation.

According to sources, in both Europe and the United States, a significant number of prospective car purchasers seeking entry-level models are unable to afford new automobiles. Consequently, these individuals resort to purchasing pre-owned cars, deferring their purchases, or opting for alternative modes of transportation.

However, in China, electric vehicles (EVs) have gained universal acceptance due to high demand, robust government incentives, and quick advancements in technology.

According to researchers at Jato Dynamics, China has successfully prioritized the goal of making electric vehicles (EVs) accessible to a wide range of individuals.

In contrast, it has been noted that electric vehicle producers in Europe and the United States, both of which represent well-established car markets with somewhat restricted government assistance, have encountered challenges in achieving comparable production rates for such vehicles.

Advantages of the supply chain

One significant determinant contributing to the comparatively reduced cost of electric vehicles (EVs) in China is the nation’s prominent position in the EV battery supply chain.

Based on data provided by SNE Research, a consulting organization based in South Korea, it is evident that Chinese manufacturers held a dominant position in the worldwide electric vehicle (EV) battery industry, accounting for a substantial 60% share in the year 2022.

The nation also exercises authority over the manufacturing of battery materials, including nickel, cobalt, and lithium.

According to recent research by experts from Moody’s, China’s car manufacturers have a competitive advantage in terms of electric vehicle (EV) production costs due to their strong position in lithium-ion battery cell production.

According to the sources, it is projected that China currently holds a dominant position in the global supply of lithium, contributing over 50% of the total supply. The country’s relatively lower labor costs serve to further strengthen this advantage.

Nevertheless, the global expansion efforts of Chinese electric vehicle (EV) companies may face complications due to geopolitical issues.

According to analysts from Moody’s, there is a growing trend in the United States and Europe to minimize risks associated with China. This might potentially result in the establishment of trade barriers for Chinese goods, regardless of their lower manufacturing costs. China’s ongoing momentum in the automobile export competition may perhaps diminish.

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