Nio plans to begin deliveries of its ET7 electric sedan in 2022.
Evelyn Cheng | CNBC
SHANGHAI – After the last year of growth in the world’s largest car market, China’s newly created electric vehicle companies are stepping up plans to take over Europe.
Chinese authorities have only begun lowering restrictions on full foreign ownership of local car production in recent years. But more than a decade ago, Beijing began spending the equivalent of billions of dollars on developing its own electric vehicles.
This has helped local players gain an edge in the production of battery-powered cars, which they now want to sell abroad. Goldman Sachs analysts predict that in four years, new government policies will mean that electric cars will account for a larger share of car sales in Europe and the United States, compared to China, although it is the largest market.
Nio, who is on the US list, has said he would enter Europe in the second half of this year. And on Monday, co-founder and chairman Lihong Qin said the company expects to make an official announcement about this expansion in a month.
He did not name a specific country, although he stated that after Europe, Nio still intends to enter the US market.
Amid tensions with the US and attempts to seal an investment deal with Europe, China exported 63,500 pure battery electric vehicles for the first eleven months of last year, according to a report from the Chamber of Commerce. China for January machinery import and export. and electronic products. Although Saudi Arabia and Egypt were the top destinations for Chinese cars last year, the report noted significant growth in vehicle exports to the UK, Belgium and Germany.
Xpeng, listed in the United States, is already testing the waters in Norway, where the start-up delivered 100 units of its G3 electric SUV in December.
Later this year, Xpeng expects to see how northern European customers respond to its P7 electric sedan, said He Xiaopeng, president and CEO. He is recruiting new staff and plans to set up a company in the region, before looking at Western and Eastern Europe.
Another start-up of Chinese electric vehicles, Aiways, said it exported more than 1,000 vehicles to Israel and Europe during the first three months of this year.
“It’s no secret now that most of China’s emerging companies have global ambitions,” said Tu Le, founder of Beijing-based consulting firm Sino Auto Insights. “This will continue as these companies pursue growth and value and see opportunities due to the lack of viable EVs in the region.”
He said with enough local research, some of the Chinese companies could be successful in Europe.
However, any growth in Chinese electric car sales in Europe remains a small fraction of the market.
China accounted for less than 2% of EU passenger car imports in 2019 and the value of 865 million euros represents a growth of 79% over the previous year, according to the European Association of Car Manufacturers .
In contrast, EU-owned carmakers manufactured nearly 6 million passenger cars in China in 2018, nearly a quarter of total Chinese car production, the association said.
Increased competition within China
The adventure of Chinese companies abroad comes when the market heats up at home. Qin, of Nio, said the entry of technology companies like Apple and Huawei into the industry is creating fierce competition for the vehicle manufacturer.
As for cars, Tesla leads the market and increases local production. Its Model 3 was the best-selling electric car in China last year, according to the China Passenger Association.
Excluding two mini-electric cars, the association said the next best-selling vehicle in the category was the Aion S model, a new energy brand derived from Chinese state-owned automaker GAC. A more expensive model from Nio was in ninth place, while Xpeng was not in the top ten.
“Chinese consumers are increasingly understanding new energy vehicles,” said Aion planning department director Qiu Liangping, according to a CNBC translation of his statements in Mandarin. In addition to facilitating battery charging, he said Chinese buyers are looking for a better driving experience than fossil fuel-powered cars and Internet-powered functions.
The brand also has its eyes set on the international market, Qiu said. Prior to the derivation, Aion and GAC’s Trumpchi brand were already selling cars in Israel, the Middle East, and South America.
As the automobile industry moves toward electric power, traditional American and German automobile companies launch their own electric vehicles;
For example, General Motors ’Cadillac brand unveiled its Lyriq electric car at the Shanghai Motor Show, with pre-orders in China starting later this year, according to the company.
Ford also used the program to unveil its locally manufactured version of the Mustang Mach-e electric car, as well as an Evos SUV developed largely in China that will only be available in the country.
Volkswagen unveiled in Shanghai a third electric car for China, the ID.6. The German manufacturer expects that by 2030, at least 70% of its cars will be sold in Europe with electricity and at least 50% of cars sold in North America and China.