Chinese EV Makers Set to Challenge Tesla and European Automakers
Chinese EV Makers Set to Challenge Tesla and European Automakers

Since the 1980s, European car manufacturers have dominated the Chinese market, selling millions of vehicles with little competition from local brands. However, the tables are turning as Chinese electric vehicle (EV) makers are gearing up to compete fiercely in Europe.

Leading Chinese EV companies, including BYD, Chery, and Great Wall Motor (GWM), are planning an extensive series of product launches—around 20 new models over the next five years. They are investing heavily in sales and marketing to establish themselves in Europe, which is their most critical export market. This strategy was revealed through interviews with 18 Chinese automotive executives, consultants, and industry experts familiar with the plan.

China's EV industry, already the largest in the world, has gained significant market share from foreign competitors at home. Now, these Chinese manufacturers are setting their sights on Europe. To understand European consumers better, they have hired industry veterans and partnered with local distributors. BYD and Chery have even announced plans to produce cars in Europe.

To penetrate the European market, Chinese carmakers are employing several tactics. These include sponsoring prominent sporting events to boost brand recognition, expanding dealership networks, and enhancing service and repair facilities to maintain resale values. This focus on resale value is crucial, especially for fleet buyers who constitute a significant portion of the European market.

Although currently, Chinese automakers have a small market share in Europe due to limited brand recognition—except for MG, a former British brand now owned by Chinese state-owned SAIC—their sales are rapidly increasing. Industry experts predict a significant surge in deliveries as new models are introduced across various price ranges. For instance, BYD's sales in Europe tripled to 15,000 vehicles in 2023, following years of strong growth in China and other export markets.

Cost Advantages
China's auto industry benefits from substantial cost advantages over its international competitors, partly due to government subsidies and the country's leading position in battery-minerals refining.

In China, the proliferation of EV brands has triggered a price war. Companies like BYD are selling a wide range of EVs priced between $10,000 and $30,000. These low prices have alarmed automakers and their political allies in the U.S. and Europe. In response, U.S. President Joe Biden raised tariffs on Chinese EVs to 100% in May. The European Union is also investigating Chinese subsidies and may soon increase tariffs on Chinese cars.

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