SHANGHAI (Xinhua) — Following a year of expansion in the world’s largest auto industry, China’s electric vehicle start-ups are ramping up ambitions to compete with Europe.
Only in the last few years have Chinese authorities begun to relax limits on full foreign control of domestic car manufacturing. However, Beijing started investing billions of dollars in producing its own hybrid cars more than a decade ago.
This has given local players an advantage in manufacturing battery-powered vehicles, which they are now attempting to market overseas. According to Goldman Sachs economists, new government strategies would ensure that in four years, electric vehicles will account for a larger share of vehicle sales in Europe and the United States than in China, despite the fact that China is the largest market.
Nio, a publicly traded company in the United States, has stated that it will join Europe in the second half of this year. On Monday, co-founder and president Lihong Qin said that the company plans to make a formal announcement about the expansion within a month. He did not name a particular country but stated that Nio still plans to join the US market after Europe.
According to a January study from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, China exported 63,500 pure battery-powered electric vehicles during the first eleven months of last year, despite disputes with the United States and efforts to reach an investment agreement with Europe. Though Saudi Arabia and Egypt were the top overall destinations for Chinese cars last year, the study noted substantial growth in vehicle exports to the United Kingdom, Belgium, and Germany.
Xpeng, a publicly traded company in the United States, is now exploring the waters in Norway, where the company shipped 100 units of its G3 electric SUV in December.
According to Xiaopeng, chairman and CEO of Xpeng, the company hopes to see how consumers in northern Europe respond to its P7 electric sedan later this year. He is hiring new employees and intends to establish a business in the city before expanding into Western and Eastern Europe.
Aiways, another Chinese electric vehicle start-up, announced that it exported over 1,000 vehicles to Israel and Europe in the first three months of this year.
“It is no longer a mystery that the majority of China’s EV entrepreneurs have global ambitions,” said Tu Le, founder of Beijing-based consulting company Sino Auto Insights. “This will proceed as these businesses seek growth and value and see opportunity due to the region’s shortage of viable EV products.”
He believes that with enough local testing, some Chinese businesses might thrive in Europe. However, any increase in Chinese electric vehicle shipments to Europe remains a negligible portion of the industry.
According to the European Automobile Manufacturers Association, China accounted for less than 2% of the EU’s passenger car imports in 2019, with the 865 million euros in volume representing a 79 percent increase over the previous year.
According to the group, EU-owned vehicle manufacturers produced nearly 6 million passenger cars in China in 2018, accounting for nearly a quarter of total Chinese car demand.
Within China, rivalry is increasing.
The Chinese start-ups’ international expansion arrives as the domestic industry heats up. According to Nio’s Qin, the entrance of tech giants such as Apple and Huawei into the market is causing fierce rivalry for the carmaker.
Tesla is the industry leader in automobiles and is increasing local demand. According to the China Passenger Car Association, Tesla’s Model 3 was the best-selling electric car in China last year.
With the exception of two mini-electric vehicles, the next best-selling vehicle in the group, according to the association, was the S model from Aion, a new energy brand spun off from Chinese state-owned automaker GAC. Nio’s more expensive variant came in eighth, while Xpeng failed to reach the top ten.
“Chinese customers are becoming more familiar with modern energy vehicles,” said Aion’s planning department chief Qiu Liangping, according to a CNBC translation of his Mandarin-language remarks. In addition to battery charging convenience, he claims that Chinese consumers want a better driving experience than that of fossil-fuel-powered vehicles, as well as internet-powered features.
According to Qiu, the brand is now looking to expand into the international market. Aion and GAC’s Trumpchi brand was still distributing cars in Israel, the Middle East, and South America prior to the spin-off.
As the automotive industry transitions to electric power, traditional U.S. and German automakers are introducing their own hybrid cars, many of which will be available in China first.
General Motors’ Cadillac brand, for example, debuted its Lyriq electric car at the Shanghai auto show, with pre-orders in China set to begin later this year, according to the group.
Ford also used the show to unveil its locally produced Mustang Mach-e electric vehicle, as well as a largely Chinese-developed Evos SUV that will only be available in the region.
The ID.6 is Volkswagen’s third electric vehicle for China, which was unveiled in Shanghai. The German automaker hopes that by 2030, at least 70% of its cars sold in Europe will be hybrid, and at least 50% of cars sold in North America and China will be electric.
