The Chinese car is coming, and the Europeans are in a hurry

Recently, European car companies and EU auto lobby groups have hyped that China's pure electric buses are posing a so-called "threat" to related industries in Europe.

Among them, the European edition of the American "Politico" news network claimed that Chinese car companies will occupy nearly one-third of the European electric bus market share in 2023, and pure electric city buses have become an "imminent threat". For this reason, European automakers hope that the EU will pay close attention to the industry and even take action to achieve so-called "fair competition".

European automakers and auto lobby groups have encouraged the EU to adopt trade protection measures against China's pure electric buses. In recent years, Chinese electric vehicle manufacturers such as BYD, which has factories in the United Kingdom, the Netherlands and Hungary, dominate the electric bus sector. In January 2024, BYD won a framework agreement worth 234 million euros (about 1.823 billion yuan) for 500 electric buses from De Lijn, a public transportation company run by the Flemish government-run public transportation company in Belgium, and the first batch of 92 electric buses worth 43 million euros (about 335 million yuan) has been ordered.

Starting in 2025, BYD's Hungarian plant will deliver electric buses to De Lijn. In this regard, European car companies and auto lobby groups believe that the De Lijn contract was won by BYD, which is a serious loss for local European manufacturers such as Belgian bus manufacturer Van Houl or Dutch bus manufacturer VDL.

At the same time, European car companies are also hyping up the "subsidy theory", and the Dutch bus manufacturer VDL attacked BYD for receiving "a large amount of subsidies" from the Chinese government, and used this as a reason to encourage the EU to take trade protection actions to achieve so-called "fair competition".

Thomas Fabian, head of the commercial vehicle division of the European Automobile Manufacturers Association, declared: "Threats to the competitiveness of the industry include fierce global competition, and Chinese bus manufacturers have gained market share in the EU for many years. Fabian believes that European policymakers have a responsibility to ensure that bus manufacturers can continue to "compete on a level playing field."

As of now, the EU has said it has no intention of conducting a so-called investigation into Chinese electric bus manufacturers.

In recent years, China's independent bus brands have accelerated the pace of going to sea, and they have opened a "beach-grabbing landing" in Europe, and Europe has increasingly become one of the important markets for China's new energy buses to export overseas. At present, the competition pattern of the European bus market is that the old European bus companies have accumulated deep accumulation in the production of diesel buses, and the brand is deeply rooted in the hearts of the people, but it is relatively scattered in the new energy market.

On the other hand, the EU's new carbon emission policy has also accelerated the market penetration of new energy buses to a certain extent. In the first half of 2023, the penetration rate of new energy in Europe will be about 15%, which is still far from the new energy penetration rate stipulated by the European Union.

At present, China's Yutong Bus, BYD, Zhongtong Bus, Suzhou King Long, etc. are all in the European market. Among them, Yutong Bus will export more than 3,000 new energy buses in 2022, becoming the champion of pure electric bus sales in Europe in 2022. For this reason, European companies hope that the EU will pay close attention to the electric bus market and try to find every opportunity to reduce the market share of Chinese companies in Europe.

But so far, the EU has no intention of conducting a so-called investigation into Chinese bus manufacturers for the time being, and has not sent competition investigators to China's bus industry. In this regard, a spokesman for the Swedish car company Volvo said: "Any company that complies with European regulations can enter the EU market." We are confident that the European competition regulator will ensure that competition in the future is also fair. ”

Previously, in October 2023, the European Commission launched a countervailing investigation into China's pure electric passenger vehicles with 9 seats or less, which was firmly opposed by China; Within Europe, the move has also sparked widespread concern. Zipzer, chairman of the German BMW Group, warned the EU on May 8 not to use tariffs on Chinese electric vehicles, otherwise it will not only subvert the EU's green deal industrial plan, but also hurt German car companies that import Chinese-made cars.

However, with the excellent performance of Chinese automakers, the EU may impose restrictions on Chinese electric buses at any time.

According to the International Energy Agency (IEA), city buses are at the forefront of electrification – unlike long-distance buses, buses travel on fixed routes, travel shorter distances, and are easy to charge. Electric buses are quieter and no longer smell of diesel, making them an option for more and more cities in Europe. Europe is the birthplace of the world's passenger cars, under the trend of global energy transition, the European Union decided to stop selling carbon dioxide emitting buses by 2035, and achieve the medium-term target of 90% emission reduction in 2030, which makes the new energy bus industry usher in great changes.

In particular, the market for pure electric buses is expanding rapidly. The UK is leading Europe in the deployment of electric buses, with 1,206 electric buses registered in 2023, followed by Germany, Norway and Spain. The fastest growing country is Portugal, which registered only 52 electric buses in 2022 and this number soars to 364 in 2023.

At the same time, in 2023, China's automobile exports will rank first in the world for the first time, and after the export of new energy passenger vehicles is hot, the export of new energy buses will gradually show a positive momentum: in 2023, China's bus exports will be 43,515, a year-on-year increase of 41.25%, of which new energy models account for a higher and higher proportion. In addition to popular export destinations such as Asia, Africa and Latin America, Europe, which has a developed automobile industry, has also become an important export destination for China.

In the past few years, Europe and Japan have been vigorously promoting electrification strategies. But now, Europe's plan to phase out fuel vehicles in 2035 has been canceled, and Toyota has repeatedly expressed its opposition to electric vehicles, and the three new cars to be launched in 2024 are all fuel vehicles. Mercedes-Benz recently announced that it will adjust its 2030 all-electric target and decide to continue to focus on the development and production of fuel vehicles in the next decade. BMW then followed suit and abandoned its plan to sell only pure electric vehicles. Apple has also announced the cancellation of its 10-year plan to develop the "Apple Car" electric car. Therefore, in the process of green transformation of European public transportation, Chinese buses are playing an increasingly important role in promoting.

In 2023, Europe's top 12 bus manufacturers sold a total of 5,107 electric buses, nearly one-third of which were manufactured by China's Yutong Bus, BYD, BYD's joint venture with British bus manufacturer Alexander Dennis, and Zhongtong Bus, according to data released by Dutch consulting firm Chatrou CME Solutions.

At present, China's electric buses will inevitably seize the market share of the local industry in Europe in the process of developing the market in Europe by virtue of the core advantages accumulated in products, services, solutions and technologies.

Some analysts believe that although the EU will only launch a countervailing investigation on pure electric passenger cars with 9 seats and below produced in China in October 2023, most of the products of Chinese bus brands have not been affected by this investigation, but with the intensification of competition between China and Europe in the field of new energy vehicles, the EU may take trade protection measures or formulate policy barriers at any time to hinder the operation and sales of Chinese electric buses in Europe through non-market means, which should cause sufficient attention and vigilance of Chinese new energy vehicle companies, including commercial vehicle companies.

How can we respond?

First, through the continuous integration of technology and demand, get rid of the image of low-end products. China's bus brands have been going overseas for more than 20 years, from the ice-breaking stage driven by policy and cost performance, to now have entered a new stage of technology output and brand output. It is suggested that Chinese auto brands continue to accumulate in terms of products and technologies through the continuous integration of technology and demand, strive for technological iteration and upgrading, enhance the global influence of their own brands, get rid of the image of low-end products, further open up the European bus market, and expand the long-term growth space of bus exports.

2. Provide customized services based on the characteristics of the European market to enhance competitiveness. Entering mature markets such as Europe requires not only high-performance products as support, but also an in-depth understanding of local vehicle needs to overcome the problem of "adaptation to the water and soil". It is recommended that Chinese electric bus companies provide customized design and adaptation services for cold weather and extreme environmental conditions in Europe, such as installing high-power heating radiators and snow chains on electric buses; Shorten the charging time and increase the charging power; Through intelligent temperature control, remote pre-heating and other functions to reduce vehicle energy consumption.

3. Continuously adjust strategies, expand overseas demand, and strengthen localized cooperation. It is suggested that Chinese electric bus companies should conduct sufficient research and planning before developing each market, and formulate adaptive sales and product strategies, service parts guarantee models and management methods; In view of some possible barriers and obstacles, Chinese bus brands need to carry out in-depth cooperation and integration with local partners, and even cooperate with competitors to some extent. Through in-depth cooperation, we can better integrate into the local market, improve the localization rate, and achieve mutual benefit.