Connect with us

Investing

China EVs cast long shadow over Munich car show

Published

on

© Reuters. FILE PHOTO: A Renault wallbox charging station is used by a Renault Captur hybrid car at a dealership in Les Sorinieres, near Nantes, France, October 23, 2020. Picture taken October 23, 2020. REUTERS/Stephane Mahe/File Photo

By Victoria Waldersee

MUNICH (Reuters) -Europe’s carmakers have a fight on their hands to erase China’s lead in developing cheaper, more consumer-friendly electric vehicles (EVs), industry analysts and executives said at Munich’s IAA (NYSE:) mobility show.

“It must be a battle, they (Chinese EV makers) are clearly very competitive in the electric car value chain,” Renault (EPA:) CEO Luca de Meo told RTL Radio, speaking from the car show. “I think they’re a generation ahead of us.”

“We need to catch up very quickly,” he added.

Chinese EV makers including BYD (SZ:), Nio (NYSE:) and Xpeng (NYSE:) are all targeting Europe’s EV market, where sales soared nearly 55% to about 820,000 vehicles in the first seven months of 2023, making up about 13% of all car sales.

According to auto consultancy Inovev, 8% of new EVs sold in Europe so far this year were made by Chinese brands, up from 6% last year and 4% in 2021.

The Chinese presence is also being felt at the Munich auto show. About 41% of exhibitors at this year’s event are headquartered in Asia, with double the number of Chinese companies attending, including EV makers BYD and Xpeng and battery maker CATL.

“What used to be a performance for the German car industry to demonstrate its extremely strong position is now a meeting of equals between progressive players from around the world, especially China,” said Fabian Brandt of consultancy Oliver Wyman.

The arrival of Chinese EV makers has raised concerns they will undercut local carmakers and come to dominate EV sales.

The average price of an EV in China was less than 32,000 euros ($35,000) in the first half of 2022 compared with around 56,000 euros in Europe, according to researchers at Jato Dynamics.

“Europe needs to stop being naive from a macroeconomic point of view in the face of China,” Renault’s engineering head Gilles Le Borgne, told journalists on Sunday, pointing to the country’s control of the full battery supply chain.

Chinese and German carmakers and suppliers will also speak at a Chinese EV conference to be held outside China for the first time as part of the IAA.

Competition over price will be a key theme at the conference, with Tesla (NASDAQ:) showcasing its upgraded Model 3 to go on sale in Europe from October at 42,990 euros ($46,400).

Mercedes-Benz (OTC:) will present its CLA compact class and BMW (ETR:) its Neue Klasse, both of which target higher range and efficiency, while halving production costs.

Volkswagen (ETR:) unveiled a showcar for its CUPRA brand on Sunday and outlined a new design-oriented approach for the company, with chief designers working more closely with its 10 brand CEOs for stronger differentiation.

Mercedes CEO Ola Kaellenius told journalists on Sunday it was not “unusual for new players to come in” at a time when the industry was undergoing such a huge transformation.

“There’s nothing else you can do but focus on your customer,” Kaellenius said.

($1=0.9273 euros)

Read the full article here

Trending