As Chinese electric car companies pile into Europe - offering keener prices and better levels of equipment than many of their competitors - they may take up to 15 per cent of the European car market within the next two years, according to a new report.
The report by KPMG consultants in Hong Kong says Chinese EV's accounted for less than ten per cent of the European market last year, when 1.1 million EV’s were sold, according to the South China Morning Post (SCMP).
Companies such as BYD, Neo, Ora and MG have seen significant demand for their cars, often at the expense of European car companies.
In Germany, for example, 28 per cent of EV’s sold in 2022 were Chinese. The figure the previous year was 7.8 per cent, so the greater demand has seen the share for Chinese companies in the German market triple in twelve months, leaving companies like Volkswagen struggling to compete.
Now comes the news European car companies don’t want to hear. BYD - billed as the world’s biggest car company you’ve never heard of - wants to open a European factory, possibly even two.
Bloomberg quotes a BYD spokeswoman as saying: "Maybe not only one, it can be two." The best location was being evaluated "to support BYD’s fast ramp-up".
That ramp is likely to be faster than for other car companies, such as Ford which, like other big manufacturers to struggling to move from combustion engine technology to a completely new EV one, with all the attendant costs.
Ford’s CEO, Jim , recently commented that he saw Chinese companies - not GM or Toyota - as Ford’s main competition. "The Chinese are going to be the powerhouse", he added.
Peugeot’s CEO, Linda Jackson, told a recent Financial Times conference that Chinese EV makers are a growing threat because they are offering better cars than in the past at affordable prices.
"For me the biggest danger for electric vehicles prices is the Chinese coming in because they are coming with quite competitive prices and with very good vehicles," she told the Financial Times Future of the Car" conference.
Her boss, Carlos Tavares, the CEO of Stellantis Group that controls several car companies, including Peugeot, Fiat and Opel, predicted a "terrible fight" was facing European manufacturers.
An Allianz Trade report - detailed in Automotive News Europe - said policymakers need to meet the challenge with reciprocal tariffs on imported cars from China, do more to develop EV battery materials and technologies, and also allow Chinese carmakers to build cars in Europe.
With the domestic Chinese market over-supplied and an economic downturn there, Europe will become an even greater export target for Chinese car companies.
It’s reasonably safe to assume that the proposed BYD factory in Europe will only be the first of many and to predict that the battle with advanced and well-funded Chinese manufacturers is really only starting.
