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China's EV prowess has Europe's carmakers on edge at Munich car show
FILE PHOTO: A Renault wallbox charging station is used by a Renault Captur hybrid car at a dealership in Les Sorinieres, near Nantes, France, on Oct 23, 2020. (Photo: REUTERS/Stephane Mahe)
04 Sep 2023 01:23PM(Updated: 04 Sep 2023 09:26PM)
MUNICH :Europe's carmakers have a fight on their hands to produce lower-cost electric vehicles (EVs) and erase China's lead in developing cheaper, more consumer-friendly models, executives said at Munich's IAA mobility show.
"We have to close the gap on costs with some Chinese players that started on EVs a generation earlier," Renault CEO Luca de Meo told Reuters at the car show, adding when manufacturing costs decline, prices will also go down.
De Meo said as part of the French carmaker's drive toward price parity with the Chinese, its R5 EV due out next year will be 25 per cent to 30 per cent cheaper than its electric Scenic and Megane models.
Chinese EV makers, including BYD, Nio and Xpeng are all targeting Europe's EV market, where sales soared nearly 55 per cent to about 820,000 vehicles in the first seven months of 2023, making up about 13 per cent of all car sales.
Xpeng plans to expand into more European markets in 2024, and Zhejiang Leapmotor Technology announced five models for overseas markets, including Europe, over the next two years.
According to auto consultancy Inovev, 8 per cent of new EVs sold in Europe so far this year were made by Chinese brands, up from 6 per cent last year and 4 per cent in 2021.
About 41 per cent of exhibitors at this year's Munich event are headquartered in Asia, with double the number of Chinese companies attending, including BYD, Xpeng and battery maker CATL.
"What used to be a performance for the German car industry to demonstrate its extremely strong position is now a meeting of equals between progressive players from around the world, especially China," said Fabian Brandt of consultancy Oliver Wyman.
The arrival of Chinese EV makers in Europe has raised concerns they could dominate EV sales.
The EV in China cost less than 32,000 euros ($35,000) in the first half of 2022 compared with around 56,000 euros in Europe, according to researchers at Jato Dynamics.
"The base car market segment will either vanish or will not be done by European manufacturers," BMW CEO Oliver Zipse on Sunday evening in reference to China's push into Europe.
Mercedes-Benz will present its CLA compact class and BMW its Neue Klasse, both targeting higher range and efficiency while halving production costs.
Volkswagen CEO Oliver Blume told reporters that through its partnerships in China, the carmaker aims to cut battery cell costs by 50 per cent.
Xpeng President Brian Gu said while European carmakers currently lag behind China, they have made a "huge commitment" to EVs with partnerships and large investments in technology.
"I would never discount the large (carmakers) trying really hard to come back and focus on this important transition," Gu said.
While carmakers inside the show were talking up their green vehicles, activists from Greenpeace staged a protest against emissions from their fossil-fuel powered cars that are still being produced.
Protesters sank three upper sections of cars into an artificial lake in front of the auto show, holding up signs reading "Auto industry sinks climate protection" and "Shrink Now Or Sink Later".
Europe's carmakers fret over China's EV prowess at Munich car show
MUNICH :Europe's carmakers have a fight on their hands to produce lower-cost electric vehicles (EVs) and erase China's lead in developing cheaper, more consumer-friendly models, executives said at Munich's IAA mobility show. "We have to close the gap on costs with some Chinese players that...
