Chinese EV Makers Set Their Sights on Europe: German Suppliers Welcome the Move

Chinese electric vehicle (EV) makers, including BYD, Nio, Xpeng, and Leapmotor, are targeting the European EV market, where sales soared nearly 55% to about 820,000 vehicles in the first half of 2023. German suppliers are welcoming the Chinese EV makers’ European plans. They see it as an opportunity to expand their business and increase their revenue.

Chinese EV makers’ European plans

Chinese EV makers are targeting the European EV market, which is expected to grow significantly in the coming years. The European Union has set a target of reducing carbon emissions by 55% by 2030, which is expected to drive the demand for EVs.

Chinese electric vehicle (EV) makers are increasingly looking to expand their reach beyond China, with Europe and the Middle East being two key regions of interest. While Chinese EV makers have yet to establish a strong foothold in Europe, they are ramping up their efforts to do so. BYD, Xpeng, and other Chinese EV makers are launching electric vehicles for international markets, and Xpeng has announced plans to expand into Europe. Chinese manufacturers are adapting their vehicles to the European market step by step through user experience and customer orientation. Europe is the No. 2 market for electric vehicles, and competition is less intense than in China.

However, Chinese EV makers have faced challenges in Europe, and to date, China-made electric vehicles have just scratched the surface of the European market. Chinese startups have said they see Europe as a long game, anticipating a decade for any payoff. Chinese homegrown EV makers are increasingly dominating their fiercely competitive domestic market, the world’s largest for EVs. BYD, the largest seller of EVs in China and the world’s largest seller of EVs and plug-in hybrids, aims to sell four million vehicles in 2023, at least doubling this year’s estimated total. To do so, it has to gain a real foothold in Europe.

German suppliers’ response

German suppliers are welcoming the Chinese EV makers’ European plans, as they see it as an opportunity to expand their business and increase their revenue. Bosch CEO, Stefan Hartung said at Munich’s IAA mobility show “Chinese manufacturers will adapt vehicles to the European market step by step through user experience and customer orientation. This is a good way to do it and also quite natural for us as a supplier because we all know these manufacturers from our collaboration in China.”

Chinese electric vehicle (EV) makers are planning to expand into the European market, and German suppliers are welcoming this move. Chinesebrands are expected to adapt their vehicles to the European market through user experience and customer orientation. China is currently the leader in global growth in electric car markets, with sales nearly tripling to 3.4 million in 2021. Despite the scaled-back subsidies, the growth in 2021 sales suggests that China’s EV market may be starting to mature.

Europe is the second-largest market for electric vehicles, and Chinese EV makers see it as a huge opportunity. However, there are concerns in Europe about the influx of Chinese EVs, with France disagreeing over China’s plan to sell a million electric cars in Europe. France fears that this action may harm its China business. However, Europe’s recent decision to ban the sale of new combustion engine cars starting in 2035 has provided a strategic opening for Chinese startup car brands.

Benefits for German suppliers

German suppliers are expected to benefit from the Chinese EV makers’ European plans in several ways. First, they will have the opportunity to supply parts and systems to Chinese EV brands. This will increase their revenue. Second, they will be able to expand their business in the growing European EV market. Third, they will be able to learn from Chinese EV makers’ experience in the Chinese EV market, which is the largest in the world. Here are some other potential benefits

1. Cost advantage: Chinese EV makers can produce vehicles for less due to lower research and development costs. Also, lower levels of capital spending, and lower labor costs than rivals in Europe will boost the cost advantage. This cost advantage can put pressure on European manufacturers in their home market.

2. Access to the Chinese market: German suppliers can benefit from partnerships with Chinese EV makers. This will give them access to the Chinese market, which is the largest EV market in the world. For example, Daimler has formed a joint venture with Geely to develop new EVs.

3. Technology transfer: Chinese EV makers are investing heavily in research and development to improve their EV technology. German suppliers can benefit from partnerships with Chinese EV brands to gain access to this technology and expertise. This can help them improve their own products and stay competitive in the global market.

4. First-mover advantage: Chinese EV makers are targeting Europe as their next major market. German suppliers can benefit from partnerships with Chinese EV brandss. They will gain a first-mover advantage in this market. It can help them establish a strong foothold and gain market share.

Final Words

German suppliers are welcoming the Chinese EV makers’ European plans. They see it as an opportunity to expand their business and increase their revenue. The Chinese electric car brands are targeting the European EV market, which is expected to grow significantly in the coming years. The European Union has set a target of reducing carbon emissions by 55% by 2030. This is expected to drive the demand for EVs. German suppliers are expected to benefit from the plans of the Chinese in several ways. This includes supplying parts and systems to Chinese EV brands and expand their business in the European EV market. German brands will also learn from Chinese EV brands experience in the Chinese EV market.