Author 丨 Zhang Yuzhe
Core ideas
As of March 2022, at least 12 Chinese auto brands have launched or will launch new energy vehicles in the European market;
Tesla's sharp increase in volume superimposed on the overall growth rate of the market has slowed down, and the European new energy vehicle market will undoubtedly become more "involuted";
On the one hand, European local car companies have formulated radical new energy vehicle planning, and on the other hand, they are also accelerating the "make-up lesson" intelligence.
While industry insiders applaud The 3-fold surge in China's electric vehicle exports in 2021, few people have noticed that this data is likely to turn into negative growth within a year.
And what caused such a huge change was an American automaker, Tesla.
According to German media reports, on March 22, local time, Tesla's Berlin factory will hold an opening ceremony and deliver the first 30 Model Ys to consumers.
According to data from the China Association of Automobile Manufacturers, in 2021, China's total automobile exports reached 2.015 million units, doubling the growth year-on-year. Among them, the export volume of new energy vehicles reached 310,000 units, a substantial increase of 304.6% year-on-year. During the same period, China's total automobile sales were 26.275 million units, while new energy vehicle sales were 3.521 million units.
This means that for every 100 cars sold in the Chinese market, 7.6 units will be exported, while for every 100 new energy vehicles sold, 8.8 units will be sold overseas.
In mid-March, data released by the Association showed that China's new energy vehicles exported more than 100,000 units in January-February 2022, an increase of 3.8 times year-on-year. The growth rate of export volume continues to expand, coupled with the intensive announcement of overseas plans by car companies, making the voice of optimistic new energy vehicles going to sea more and more loud.
It seems that China's new energy vehicles have gained higher recognition overseas than fuel vehicles, but in fact, it is not as simple as imagined.
Of the 310,000 new energy vehicles exported in 2021, 160,000 will come from Tesla. If Tesla sales are removed, for every 100 new energy vehicles sold in the Chinese market, less than 5 Chinese new energy brand cars go overseas. If the scope is narrowed to the new energy passenger car market, the proportion of Chinese brands will be even lower.
At present, Tesla's Chinese factory produces Models 3 and Model Y, and the main export destination is Europe. Tesla's Berlin plant will also produce these two models. In the future, the plant's maximum annual production capacity is 500,000 vehicles, which is comparable to Tesla's Shanghai factory.
This means that with the completion of the future production capacity climb of Tesla's German factory, the demand for importing Teslas from China in the European auto market will gradually shrink to zero. Once the vast majority of Tesla's models produced in China are used for domestic sales, the growth rate of China's new energy vehicle exports will turn from positive to negative.
For those Chinese new energy vehicle brands that "aim for the whole world", they must have a lofty heart and walk well.
01 The aura of "European acceleration"
For a long time, China's auto exports have been mainly concentrated in emerging markets such as Russia, Southeast Asia and South America. However, with the transformation of the global automotive industry into electrification and intelligence, the mature automobile market in Europe is gradually becoming the main battlefield for Chinese cars to go to sea.
According to data from the General Administration of Customs, the top ten countries in China's export volume of new energy vehicles in 2021 are Belgium, Bangladesh, the United Kingdom, India, Thailand, Germany, France, Slovenia, Australia and the Philippines. Half of them are European countries, including Belgium, which tops the list.
As of March 2022, at least 12 Chinese auto brands have launched or will soon launch new energy vehicles in the European market.
In 2019, MG's first batch of ZS EVs (then named "EZS") were exported to the UK, opening the door for Chinese new energy vehicles to land in the European market. Since then, the number of Chinese new energy vehicles landing in Europe has increased significantly.
Compared with emerging markets, there are higher barriers to technical standards such as safety, environmental protection and technology in the European market, and EU countries can rely on their own technical advantages to restrict technical regulations, technical standards and their conformity assessment procedures. If this is the case, why are Chinese brand car companies focusing on the "difficult" bone of Europe?
With the transformation of the industry as a whole to the direction of intelligence and electrification, the future commercial imagination space of the automobile industry has been greatly improved, and the Chinese automobile industry has also stood on the same starting line with developed countries in Europe and the United States. In this context, a large number of Outstanding Chinese talents and top companies have begun to enter the automotive industry, allowing China's smart electric vehicles to show a competitive advantage in terms of user experience.
The choice to enter the European market reflects the confidence of the Chinese automotive industry in its own product experience and technical strength.
In addition, if we can gain a firm foothold in the highly competitive European market, we can also prove the strength of related companies in the field of smart electric vehicles, which in turn will help relevant brands to increase their visibility in China's local and emerging markets and promote increased performance.
"Choosing to enter Germany, the hometown of the BBA, which has a century-old car manufacturing foundation, means that Weipai dares to accept the test of the world's most stringent standards." Having a foothold in the German market is also an endorsement for winning the brand war and product war in the domestic market. Weipai CEO Li Ruifeng previously said in communication with media such as Yiou Automobile.
While Chinese new energy vehicle brands are fighting to impact the European market, the European market has not taken the initiative to open its arms.
02 Difficult to bypass Tesla
From March 16 to March 17, Tesla's Shanghai factory stopped production for 2 days due to the epidemic. This further increases the likelihood of a decline in China's exports of new energy vehicles in 2022.
The pressure tesla has brought to China's new energy vehicles to go to sea is far more than that.
Although Chinese car companies have a huge momentum in the new energy vehicles going to sea, Chinese brand new energy vehicles are still a "rare species" in the European market, and the sense of existence is extremely low.
In 2021, a total of 2.3 million new energy vehicles will be delivered to the European market. MG, the Chinese brand that sells the most new energy vehicles in Europe, only sold thousands of units throughout the year.
As the first new force in China's car manufacturing business to carry out export business, AIWAYS Automobile is already the second most visible Chinese car brand in the EUROPEAN Union. But the company's total Sales in Europe in 2021 are just over 1,600 vehicles. The rest of the Chinese brands have even less presence in the European market.
Aichi U5 sold in Europe / Image source: Aichi Auto Official
But in all the major new energy vehicle markets in the world, Tesla's presence is not generally high. With the improvement of local production in Europe, Tesla has cut the export of cars from China to Europe on the one hand, and on the other hand, it will increase the difficulty of Chinese brands landing in the European new energy vehicle market.
Tesla, which has established a foothold in the Us and American markets, has opened large-scale mass production in Europe, which also means that it will accelerate its market share in this market. Although labor costs in Europe are much higher than in China, localized production will greatly improve Tesla's delivery efficiency in the European market and save a lot of transportation costs.
If the annual production and sales of Tesla's European factories reach 300,000 vehicles, it means that Tesla has achieved a nearly 80% increase in the market, and has squeezed more than 100,000 vehicles year-on-year.
In 2021, the number of electric vehicles sold in 18 European countries was about 2.3 million, an increase of about 13 times in the five years since 2016, accounting for more than 10% of the new car market. Among them, the number of pure electric vehicles in 2021 increased by 64% compared with 2020 to 1.19 million.
However, when the time comes to 2022, the growth of the European new energy vehicle market has slowed down significantly. From January to February, sales of new energy vehicles in Germany, the United Kingdom, France, Italy, Spain, Norway and other countries all showed a significant decline compared with November to December 2021.
Tesla's sharp increase in volume superimposed on the dual impact of the overall growth slowdown, the European new energy vehicle market will undoubtedly become more "involuted". As a new entrant, the difficulties faced by China's new energy vehicles in trying to gain a foothold in this market will also increase.
Even if the European market continues to grow, the pressure on China's new energy vehicles in this market is still not small.
03 Fast-growing old rivals
In 2021, Volkswagen, which cannot squeeze into the top ten in China's new energy vehicle market, ranks first in the European new energy vehicle market. Even if the boundary is expanded to the top 20 sales of new energy vehicles in Europe, only four overseas brands of Tesla, Hyundai, Kia and Ford can be seen.
Except for Tesla, other overseas brands are not mainstream in China's new energy vehicle market. Few Chinese car companies regard Volkswagen, Hyundai and Ford as competitors when launching new energy models, and even few people choose to benchmark with BMW and Mercedes-Benz electric models. They only stare at Tesla, Weilai, Ideal, Xiaopeng, and will join BYD at most.
Chinese unacceptable small size central control, low intelligent interaction level electric vehicles can become "fragrant food" in the European market. Chinese brands with connected cars, autonomous driving, and even richer infrastructure have not gained enough recognition in this market.
Volkswagen ID.3 pure electric sedan / Source: Volkswagen official
Europeans have a higher level of trust in familiar car brands and less acceptance of autonomous driving. At the same time, lower population density and a lack of fast enough network conditions make intelligent interaction not an option for today's European consumers.
The present is more difficult, will the future be easy? Not really.
Volkswagen aims to achieve sales of electric models in Europe by more than 70% by 2030 and more than 50% in North America and China. The BMW Group will expand its lineup of pure electric models to 15 models in 2022 and will achieve annual sales of 1.5 million units by 2030. Mercedes-Benz expects to spend more on the all-electric model platform architectureSMA and AMG.EA.
The Stellantis Group, formed by the merger of Fiat Chrysler and Peugeot Citroën, is more radical. The group plans to achieve annual sales of 5 million pure electric vehicles by 2030, of which all passenger cars sold in the European market are pure electric vehicles. In 2021, Sales of Stellantis' low-emission models were 380,000 units, an increase of 160% year-on-year.
In 2021, volkswagen brands will release their ACCELERATOR strategy to accelerate the transformation of software-driven mobility service providers. CARIAD, a software company owned by the Volkswagen Group, will launch version 2.0 of the unified software platform in 2025, covering all of its brands.
In March 2022, BMW, Qualcomm and Anger announced that they will jointly develop next-generation autonomous driving technology. In the same month, Mercedes-Benz announced the establishment of an R&D center in Shanghai, which will focus on areas such as intelligent interconnection, autonomous driving, software and hardware development and big data.
The bmw's new generation i7 configuration information released at the 2022 BMW earnings annual meeting in mid-March 2022 shows that the rear of the car will be equipped with a 32-inch suspension giant screen. This innovative configuration, even the new car-making forces have not yet been carried on the car.
04 Conclusion
Compared with the era of fuel vehicles, the wave of electrification and intelligence has indeed brought Greater opportunities for Chinese cars to go to the center of the world automobile stage.
At present, China's new energy automobile industry has shown its own advantages in terms of intelligent experience, user service, cost control, etc., and the industrial chain capabilities represented by the Ningde era and Huawei also rank first in the world. At the same time, the Chinese government's support for the new energy vehicle and intelligent networked vehicle industry ranks among the top in the world.
This series of internal and external factors has given the Chinese auto industry a huge window period for taking advantage of the opportunity to change lanes and overtake.
However, the automotive industry and the mobile phone industry are not the same, and the success of China's mobile phone industry cannot be directly copied to the automotive industry. The length of the history of the automobile industry is several times that of mobile phones, the technical difficulty is 100 times that of mobile phones, and the relationship with people's life safety is much higher than that of mobile phones. Therefore, consumers' trust and loyalty to car brands is also much higher than that of mobile phones.
Especially in the face of European local car companies that have accumulated global reputation with a century of history, it is still not easy for Chinese brands to enter the mainstream of the European new energy vehicle market.
Today, the global economic downturn brought about by the epidemic and the Russian-Ukrainian war, rising raw material prices and insufficient supply of parts have also slowed down the pace of Chinese new energy vehicle brands breaking into overseas, giving European local car companies a window to catch up.
The greater the challenge, the greater the reward after success. It is believed that it is only a matter of time before China's new energy automobile industry stands firm in the European market.