New energy car companies collectively build their dreams in Europe
Release Date : 2023-06-19
The export of new energy vehicles will be the focus in 2023. From the data, in 2022, China's new energy vehicles exported 679,000 units, an increase of 1.2 times year-on-year. In 2023, China's exports of new energy vehicles have accelerated again, with 248,000 units exported from January to March, an increase of 110% year-on-year. This shows that if we follow this momentum, the export volume of new energy vehicles is expected to exceed the million mark in 2023.
However, BYD Executive Vice President Li Ke recently criticised the new US climate bill, the Inflation Reduction Act, for raising the cost of electric vehicles for US consumers.
Unlike the US, the European market has become the meat and potatoes. Recently, KPMG China and KPMG's European member firms jointly launched "China's New Energy Vehicle Dreams in Europe", an in-depth report on China's new energy vehicle exports to Europe and the layout of Chinese new energy vehicle industry chain-related enterprises in Europe from a global perspective.
Why are more and more Chinese car companies choosing to export to Europe? And are they mainly new energy vehicles? What challenges do we need to face in order to compete with the established European car companies? And what are the opportunities for new energy companies to enter the US market? During the launch of the report, AutoChina had an in-depth conversation with Kang Yong, Chief Economist of KPMG China, and Li Yao, Managing Partner of KPMG China's Overseas Investment M&A Advisory and Partner-in-Charge of KPMG's Global China Business Development Centre.
▪ Why is Europe the first stop for Chinese new energy vehicle companies?
Looking at the global market, Europe is currently the second largest new energy vehicle market in the world, and is the first to propose a ban on the sale of fuel vehicles by 2035. KPMG believes that China's new energy vehicles going to Europe is an important step for the Chinese automotive industry to go global.
In May 2021, Azera announced its "Norway strategy", with plans to deliver 7,000 ES6 and ES8 vehicles in Europe within two years; in August of the same year, the first batch of exported Xiaopeng P7s set sail from the port of Xinsha in Guangzhou and were delivered in October. It has been delivered in October; in 2022, Azure has accelerated the pace again, announcing the start of service in four markets: Germany, the Netherlands, Denmark and Sweden. In addition, car companies including BYD and Geely have started to build new energy bus and passenger car plants in Hungary and the UK.
In 2022, BYD surpassed Tesla and became the world's No. 1 OEM in total new energy vehicle sales, with annual sales of 1.816 million units.
Behind this is a reflection of the improved overall competitive strength of Chinese branded automotive products. It can be recalled that in November 2021, a BMW i7 test car with camouflage appeared in the same frame with the Xiaopeng P7 near the BMW R&D centre in Munich, Germany, which caused a buzz in the automotive circle. Sources close to the situation said, "It's not a coincidence, the odds are that the i7 was doing a comparison test of competing cars late in its development and had the P7 listed as a competitor."
According to the new energy vehicle export data under the statistical calibre of the Passenger Association, China's exports to Europe in 2021 exceeded those of Asia, the traditional export destination for new energy vehicles, accounting for 48% of new energy vehicle exports. Europe's new energy vehicle market is vast and has high potential for growth. 2018-2022 will see Europe's new energy vehicle sales grow at an average annual rate of 58%, the second fastest growth rate in the world after China (61%) over the same period. According to the European Automobile Manufacturers Association (ACEA), by 2030, three out of every five vehicles in Europe will be new energy vehicles, with a penetration rate of 60%, far exceeding the global penetration rate of 26%.