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Are Chinese brands ready to enter the European BEV market?

Throughout the ICE (Internal Combustion Engine) era, Chinese automakers have struggled to enter the mature European car market. European consumers are skeptical about buying Chinese cars due to poor perceived quality and performance in Euro NCAP crash tests, and problems with uncompetitive engine technology. At the same time, Western OEMs have generally succeeded in entering the Chinese automotive market through local joint ventures.

However, as consumer preferences for zero-emission vehicles, in addition to the European Union’s ambitious CO2 goals, open new opportunities for Chinese OEMs, the trend has changed and Chinese brands have begun to build a significant foothold in the European market. There are signs that it is. As an example, the number of Chinese models on European roads has more than doubled in the last five years.

Chinese OEMs now have a competitive advantage, following more than a decade of government-sponsored investment and incentives in battery electric vehicle (BEV) technology. This will allow Chinese OEMs to develop more competitive battery technologies, manage most of the battery material supply chain, and achieve economies of scale than many Western OEMs. I did. In fact, partner JATO Dynamics estimates that “BEV prices have halved in China over the last eight years and have risen 42% to 55% in the West.”

As a result, Western OEMs are catching up in the BEV field of the mass market, and as competition in this field intensifies due to the growing threat of new entrants, Western OEMs need to reassess their competitiveness. I have. Meanwhile, European policymakers have expressed concern about China’s restraint on battery supply chains and have planned to support investment in domestic BEV supply chains to reduce this dependence.

Increased investment in the battery supply chain is one of the European Union’s broader climate change ambitions under the “Fit for 55” package aimed at reducing greenhouse gas emissions by at least 55% by 2030. The department (compared to the 1990 level). This forces OEMs to consider the entire vehicle life cycle and carbon dioxide emissions, including end-of-life and end-of-life batteries, in order to maximize utilization and sustainability. rice field. One solution was to localize the production of battery cells. This also reduces transportation costs.

Will Chinese OEMs targeting Europe be forced to localize as competition intensifies and the need for OEMs to scrutinize overall carbon dioxide emissions? And Chinese automakers are currently competitive, can they stay that way? To counter this and meet the growing demand for BEVs, Western OEMs are moving away from ICE development and investing heavily in BEV technology, keeping all eggs firmly in the BEV development basket.

These questions remain partially unanswered, but there is one obvious thing. That is, Chinese OEMs have fully penetrated the European car market and windows are currently open to ensure a sustainable foothold. At least until legacy OEMs build BEV capabilities and maximize production efficiency. Beyond China, Tesla may be the only OEM to achieve this so far.

https://lmc-auto.com/news-and-insights/are-chinese-brands-poised-to-strike-the-european-bev-market/ Are Chinese brands ready to enter the European BEV market?

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