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Chinese electric cars to capture 15 per cent of European market by 2025 in leap forward for exports: KPMG economist
- Chinese car brands accounted for less than 10 per cent of the 1.1 million battery-powered EVs sold in Europe last year, KPMG says
- Chinese companies have advantages in affordable prices and a wide range of EV models catering to different consumer needs, economist says
Published: 12:30pm, 13 Jun, 2023
Cars await loading onto a ship for export at Yantai Port in east China’s Shangdong Province on May 9, 2023.
Chinese carmakers are expected to capture around 15 per cent of Europe’s electric vehicle (EV) market by 2025, as players such as BYD, Nio, and Li Auto gain popularity among European consumers, according to an economist at KPMG.
This would represent a fast step forward for the Chinese car brands, as their cars accounted for less than 10 per cent of the 1.1 million battery electric vehicles (BEVs) sold in Europe last year, according to a report released by KPMG on Monday in Shanghai at China’s first Carbon Neutrality Expo.
“Home-grown Chinese brands such as BYD, Nio, Xpeng, and Li Auto have huge potential in the European market and could contribute the most to future sales increase there,” said Kevin Kang, chief economist at KPMG China.
Europe is the world’s second-biggest and fastest-growing EV market after China, and is expected to see surging demand for EVs following the European Union’s announcement that it will ban the sale of new fossil-fuel cars starting in 2035 to combat climate change.
Europe accounted for about half of the 1 million new-energy vehicles (NEVs) – an umbrella term that covers BEVs, plug-in hybrids, and fuel-cell vehicles – that China exported last year, according to KPMG.
As Chinese EV makers expand their footprints by opening more stores and plants overseas, as well as providing more services and products tailored to international consumers, they are expected to improve their brand recognition and increase their share of the market, Kang said.
Chinese makers have advantages in affordable prices and a wide range of models catering to different consumer needs, KPMG said. The average price of a Chinese EV was US$30,000 in Europe in 2022, according to KPMG, compared with more than US$45,000 for Tesla’s cheapest Model 3.
In 2022, Chinese NEV makers introduced 136 models for consumers to choose from, including 110 BEV models, ranking first in the world, KPMG said.
However, Chinese makers still lack brand familiarity among European consumers, understanding of the overseas market and effective globalisation strategies, said Kang.
For example, the top three Chinese BEV models sold in Europe last year were Volvo, MG, and Polestar – all European brands acquired by Chinese car companies, while China’s home-grown BEV models accounted for less than 2 per cent of all EVs sold in Europe, KPMG found.
Norbert Meyring, partner in charge of the automotive industry for KPMG China, suggested Chinese EV makers can improve their brand visibility by collaborating with local car dealers, or by acquiring more local car brands.
Setting up local stores, customer-service centres, and local production plants through greenfield investment are also common and effective actions for Chinese carmakers in the overseas market, said Kang.
Shenzhen-headquartered BYD, which last year overtook Tesla to become the world’s bestselling NEV brand, confirmed last month that it’s considering building a factory in France.
According to the European Automobile Manufacturers Association, by 2030, three out of every five cars in Europe will be electric.“Exporting Chinese new-energy vehicles to Europe is an important step for the globalisation of China’s auto industry, and it is also an inevitable choice for China’s new-energy vehicle industry,” Michael Jiang, head of clients and markets at KPMG China said in the report.
Chinese EVs to capture 15 per cent of European market by 2025: KPMG
Chinese car brands accounted for less than 10 per cent of the 1.28 million battery-powered EVs sold in Europe last year, but have advantages in price and selection that will drive greater sales, economist says.
www.scmp.com
