Nio plans to start deliveries of its ET7 electric sedan in 2022.
Evelyn Cheng | CNBC
SHANGHAI – After the last year of growth on the world’s largest car market, Chinese electric car start-ups are stepping up their plans to take over Europe.
Chinese authorities have begun to reduce restrictions on full foreign ownership of local car production in recent years. But more than a decade ago, Beijing began spending billions of dollars on developing its own electric vehicles.
This has helped local players gain an advantage in the production of battery-powered cars, which they now aim to sell abroad. Goldman Sachs analysts predict that in four years, the new government policies mean that electric cars will account for a larger share of car sales in Europe and the US than China, although it is the largest market.
Nio, listed in the US, said it 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 of such an expansion within a month.
He did not name a specific country, while stating that after Europe, Nio still intends to enter the US market.
Amid tensions with the US and attempts to reach an investment agreement with Europe, China exported 63,500 pure battery electric vehicles in the first eleven months of last year, according to a January report from the Chinese Chamber of Commerce for import and export of equipment. and electronic products. While last year Saudi Arabia and Egypt were the top destinations for Chinese cars, the report noted a significant increase in vehicle exports to the UK, Belgium and Germany.
Xpeng, listed in the USA, is already testing the waters of Norway, where the start-up delivered 100 units of its electric G3 SUV in December.
At the end of this year, Xpeng hopes to see how northern European customers react to the P7 electric sedan, said He Xiaopeng, president and CEO. He is recruiting new staff and intends to set up a company in the region, before looking at Western and Eastern Europe.
Another Chinese startup of electric cars, Aiways, said it exported more than 1,000 vehicles to Israel and Europe in the first three months of this year.
“It’s no secret now that most Chinese EV startups 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 EV products in the region.”
He said that with enough local research, some of the Chinese companies could be successful in Europe.
However, any increase in sales of Chinese electric cars to Europe remains a small part of the market.
China accounted for less than 2% of car imports from the EU in 2019, and the value of 865 million euros marks an increase of 79% over the previous year, according to the European Automobile Manufacturers Association.
In contrast, EU-owned carmakers manufactured nearly 6 million cars in China in 2018, for nearly a quarter of China’s total car production, the association said.
Growing competition in China
The investment of Chinese start-ups abroad comes as the market heats up at home. Nio’s Qin said that the entry into the industry of technology companies such as Apple and Huawei creates fierce competition for the car manufacturer.
On the car front, 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 Automobile Association.
With the exception of two electric mini-cars, the association said the next best-selling vehicle in the category is the A model S from Aion, a new brand of energy derived from Chinese carmaker GAC. A more expensive model from Nio ranked ninth, while Xpeng did not rank in the top 10.
“Chinese consumers are increasingly understanding new energy vehicles,” said Aion Planning Department Director Qiu Liangping, according to a CNBC translation of his remarks in Mandarin. In addition to lightly charging the battery, he said Chinese buyers are looking for a better driving experience than fossil fuel-powered cars and internet-powered functions.
The brand also has an eye on the international market, Qiu said. Prior to the spin-off, GAC’s Aion and Trumpchi brand were already selling cars in Israel, the Middle East and South America.
As the automotive industry moves further into electricity, traditional companies in the US and Germany are launching their own electric vehicles – more on the Chinese market.
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 show to unveil its locally made version of the Mustang Mach-e electric car, as well as an Evos SUV developed largely in China, which will only be available in the country.
Volkswagen unveiled in Shanghai a third electric car for China, ID.6. The German manufacturer aims to have at least 70% of its cars sold in Europe in electricity by 2030 and at least 50% for cars sold in North America and China.